Posts Tagged ‘no fault option’

Insurer may have violated law, report reveals

Tuesday, February 9th, 2010

A high-profile California insurance company that is backing a controversial insurance measure on the June ballot has engaged in practices that may be illegal, including deceptive pricing and discrimination against consumers such as active members of the military and drivers of emergency vehicles, according to a state report obtained by The Chronicle.The report, obtained through the state Public Records Act, alleges that Mercury Insurance Group may have violated Proposition 103, the landmark consumer protection law approved by voters in 1988. The measure limited the cost of policies and made civil rights and antitrust laws apply to the insurance industry.

The 275-page report by the state Department of Insurance was authorized for release by Insurance Commissioner Steve Poizner. The documents, which cover the firm’s practices from the mid-1990s to 2004, are the state’s most recent completed investigation of the company.

In its reporting, the state found evidence that Mercury may have violated state laws by:

– Flagging some consumers for higher rates if they had been in an accident, even if it was not their fault.

– Not immediately granting coverage to applicants including military personnel on active duty, “artists,” those employed “in the entertainment industry as actors, dancers, etc.,” and emergency vehicle drivers.

– Raising insurance premiums after its sales agents quoted prices for discounts for which the consumer was not eligible. The department said this was the single largest category of complaints it received about the firm.

– Collecting higher premiums than allowed by law by requiring its brokers to return part of their fees to the company.

– Requesting information about customers’ “national origin,” a practice that the department said “could raise questions about the legality of Mercury’s personal automobile policy cancellation and non-renewal decisions” under state law. Mercury agreed to block such data after the state investigators raised concerns.

State officials said the report uncovered 25 issues or questionable practices by Mercury, seven of which remain unresolved.

Kathy Fairbanks, a spokeswoman for the company, disputed the state’s findings and said consumer groups intend to use the report to “muddy the waters” regarding Proposition 17, the June ballot measure that Mercury is backing.

“We’re talking about issues years ago that have been addressed and taken care of,” Fairbanks said. “I’m not going to respond (to details of the report) because it’s unrelated to Prop. 17, which is what voters are going to review.”

Fairbanks said the June measure, called the “Continuous Coverage Discount Initiative,” would increase competition and lower rates by providing auto insurance discounts to millions of Californians who “continually maintain” auto insurance coverage, an idea she said has been backed by groups including the California Chamber of Commerce.

Mercury put up $3.5 million last year to back a group called “Californians for Fair Auto Insurance Rates” to support Prop. 17, which consumer advocates say would dramatically change state auto insurance laws.

Prop. 17 affects rates

A leading consumer advocate was quick to respond to the state report.

“In my career as a consumer advocate, I’ve never seen such a devastating indictment of a single insurance company,” said Harvey Rosenfield, founder of Consumer Watchdog of Santa Monica and author of Prop. 103. He called the practices “illegal, unfair and un-American,” saying “it’s shocking that Mercury so brazenly defied the law for so many years.”

Rosenfield said Prop. 17 will allow Mercury to raise rates for Californians not previously insured or those who let their insurance lapse – a practice that is illegal under Prop. 103.

“What’s outrageous is that Mercury is spending millions on an initiative to legalize the kind of discriminatory surcharges that they were caught doing by (state) investigators,” Rosenfield said.

Poizner said he could not comment on his department’s findings on the company because his office is involved in an administrative action against Mercury for non-compliance on an issue dating back to 1998 that surfaced in the state’s examination of the company.

But the insurance commissioner, who is a Republican candidate for governor in the June primary election, said that if the state finds any insurance company to have violated the law, he will “come down on them like a ton of bricks.”

Mercury’s performance and its political muscle could also play out in the governor’s race this year. The company and its chairman, George Joseph, have donated more than $7.2 million to state political campaigns in the past decade and rank among California’s most deep-pocketed political donors.

In 2009, Mercury donated $13,000 to the gubernatorial campaign of Attorney General Jerry Brown but has not donated to Poizner’s campaign for governor.

Former state insurance commissioner John Garamendi, now a congressman, said that starting in 2002 his office “received complaints about Mercury’s practices – and those complaints rose to the level where we felt it was necessary to investigate.”

Under Poizner, who was elected insurance commissioner in 2006, the state has continued to investigate Mercury, the parent firm to the state’s third-largest auto insurance firm, which serves 10 percent of the market in California, records show.

“Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference,” the state department wrote in a Feb. 20, 2009, legal filing related to its administrative case.

Since 2006, the state has fined Mercury $600,000 for violations based on its own examinations and for consumer complaints about the firm, state officials said.

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Political clout

Garamendi and others said Mercury has a reputation for playing political hardball.

In 1996, when then-state Senate Pro Tem Bill Lockyer, a Democrat, opposed Mercury’s effort to amend Prop. 103, company chairman Joseph responded by writing a $500,000 check – to the state GOP.

“What really perturbed me is that, instead of cleaning up their act, they decided to try and change the law – to make legal what was illegal,” Garamendi said. “They went at it through the Legislature and we ultimately defeated that. And now they’ve come back with Prop. 17 … so they can do what is fundamentally unfair to the consumer.”

Fairbanks argued that Prop. 17 “levels the playing field and allows all the insurers to offer the same discount, which ultimately drives down rates” to benefit California drivers with good records who’ve maintained their auto insurance coverage.

Rosenfield said Poizner “deserves accolades for disclosing an examination that is important for the public to consider – not just customers of Mercury but voters who will have to assess the credibility of this initiative.”

Consumer Watchdog has urged Brown – who has yet to formally declare himself a candidate for governor – to consider revising the title and summary for Prop. 17 that will appear on the ballot. The group argues that Brown’s ballot description failed to mention that the measure could lead to higher rates for some Californians.

Brown’s office has said the summary accurately reflects changes in the initiative and its impacts. A nonpartisan analysis of Prop. 17 on the insurance commissioner’s Web site says some consumers will get discounts under the initiative but it “will result in a surcharge for other drivers.”

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© 2010 Hearst Communications Inc.

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What No-Fault Auto Insurance Doesn’t Cover

Friday, January 22nd, 2010
No Fault Coverage

No Fault Coverage

In most states, the no-fault law specifically excludes property damage liability for damage that you cause to the property of others. If you are at fault in such anaccident, you will be held liable and can be sued for these losses.

Only in a limited number of states does the no-fault law extend some coverage to damage you may cause another driver’s automobile. Furthermore, even in these limited cases, property damage liability coverage does not extend to your car. You must
buy a separate collision coverage to take care of this risk.

You should be aware that this is just  general overview of no-fault laws governing insurance. For specific information about the no fault law and insurance in your state, contact your state insurance department. Most state insurance departments have written consumer information that will outline the specific limits and responsibilities for auto insurance in their state.

Complete a free auto insurance quote at QuoteMatcher.com and receive a free 12 page auto insurance buyers guide detailing and explaining multiple auto insurance coverage and car insurance discounts.

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Tort Insurance Means Guaranteed Responsibility in Idaho

Tuesday, December 1st, 2009

Auto insurance is a necessity for every driver that wants to protect themselves against the financial damages that an auto accident can cause. However, culpability is determined by several factors, not the least of which is the state’s tort law system in cases of automobile accidents.

Each state holds different levels of tort systems for auto accidents. In Idaho, the statute says that someone must be found at fault and their insurance company is required to pay the costs of damages to the other party. There is no “no-fault” option, which means that having car insurance is absolutely vital to anyone driving in the state of Idaho.

Without insurance, drivers found to be at fault in an accident are financially and legally obligated for damages, but an uninsured/underinsured motorist bodily injury coverage is available for Idaho auto insurance carriers and should be added in case the person at fault has no insurance and there are immediate damages, like medical bills or car repairs, that must be attended. It is crucial that any driver in Idaho be aware of the most vital aspects of Idaho auto insurance information when comparing Idaho auto insurance quotes.

Some important criteria for drivers researching Idaho auto insurance quotes:

  • You must maintain a minimum bodily injury liability limit of $25,000 per person, $50,000 per accident, and $15,000 property damage limit by Idaho State Law.
  • Idaho Insurance Coverage:
    Minimum Limit – Bodily Injury $25,000/$50,000
    Minimum Limit – Property Damage $15,000

Quotematcher.com offers Idaho drivers the ability to quote several different Idaho auto insurance plans based on your specific criteria, taking into consideration the Idaho tort law stipulations.

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