Why life insurance should be the first step in financial planning

In the wake of increasing inflation, shift to nuclear families and change in lifestyle patterns, life insurance assumes vital importance.

It is paramount for every individual to first adequately insure his life for the financial security of his/her dependants and then proceed to address other aspects of financial planning.

Financial planning is a dynamic process that involves charting an individual's financial goals and longterm objectives in conjunction with ways and means of achieving those long-term goals and objectives.

This includes elements of protection, wealth creation, planning for contingencies and emergencies as well as planning for specific milestones in life.
Importantly, an individual's financial plan should be reviewed to be in sync with his different life stages and the various requirements that are specific to a certain stage in life.

Changing circumstances like marriage, purchase of a house, child's education mandate that the financial plan evolves to meet these objectives within the given timeline.

Today, an individual has an array of options to choose from when s/he starts financial planning. It is observed that people tend to focus on the 'wealth creation' aspect of financial planning and the 'protection' element often gets compromised or neglected.

While the loss of life of the family's bread-winner is irreplaceable, being adequately insured guarantees that the dependents are provided with the much-needed funds to be financially independent and largely keeps the family's financial plans on track without having to compromise on their standard of living.
This aspect of protection is unique to life insurance and hence it should be a key ingredient in an individual's financial plan.

As a risk-management tool, the importance of adequate life insurance in an individual's financial plan cannot be over emphasised. The relevance of life insurance as a longterm protection-cum-savings tool also comes from its primary feature of it being a need-based financial instrument that helps one meet every life stage need.

It provides the much needed peace of mind and at times actually stimulates enhanced risktaking ability of the individual. Every individual needs to asses his or her life insurance needs depending on an assortment of factors.

Life insurance requirements need to be scientifically assessed depending on the life stage at which the individual is along with current liabilities, expectation of future liabilities, number of dependents, financial goals, life style etc.

Money Matters: How Much Life Insurance Do You Need?

Whether you're married or single, a parent, or without children, life insurance can play a key role in your financial plan. But millions of Americans have no life insurance coverage, and many may not have enough.

Appreciating the importance of having adequate life insurance is one step; assessing your own unique needs is another.

As a starting point, determine your net earnings after taxes as well as your routine living expenses. Other factors to include in your calculations are:

Any outstanding debt that you owe, such as a mortgage or education loans
Future college expenses for your children
Funeral and other uninsured medical costs
How much your surviving spouse would need to adequately fund a retirement nest egg

As a general rule, you may want life insurance to cover these expenses. While ensuring the financial security of loved ones is an important use of life insurance, there are other uses. One example is as part of an estate planning strategy designed to pass more wealth to future generations. Another might be to fund a special needs trust to provide continued care to a relative after you are gone.

Once you have an idea of the amount of coverage you need, the next step is to evaluate the type of policy that is appropriate for you. Policies can be term or permanent life. Term life is basic coverage and less expensive. A term policy provides coverage for a predetermined period of time. Premiums can increase at the end of the term and can become extremely expensive. Term policies build no cash value and benefits are only paid if you die.

Permanent life insurance combines a death benefit with a tax-deferred savings component. With permanent life insurance, as long as you continue to pay the premiums, you are able to lock in coverage at a level premium rate for the life of the contract. Part of that premium accrues as a tax-deferred cash value. Borrowing from the value may be permitted.

Reviewing your coverage can be a daunting task. This is an area where a financial advisor can help you assess your need and fit it in with your entire financial plan.

Read more: http://www.wmur.com/money/27707150/detail.html#ixzz1L0uzIrGv

Hope In The Word — Life assurance vs. life insurance

Many people are thoughtful enough to take out a life insurance policy in order to provide an income or a source of revenue for their loved ones i case of their death.

Life insurance is a wonderful means of providing for those left behind who were dependent on you for all or a part of their living.

But many of these same people who are foresighted enough to take out life insurance to provide for others are shortsighted or careless when it comes to life assurance – or providing for their own soul at death.

While it is honorable and thoughtful to think of the financial security of those who depend on you, it is foolish to neglect your own eternal security. Jesus asked,

“For what shall it profit a man, if he shall gain the whole world, and lose his own soul? Or what shall a man give in exchange for his soul?” —Mark 8:36, 37. It would be a shame for one to provide for others and then themselves be left desolate for eternity.


The fact that one takes out a life insurance policy is an acknowledgment that death can come quickly and unexpectedly, “Whereas ye know not what shall be on the morrow. For what is your life? It is even a vapour, that appeareth for a little time, and then vanisheth away.” — James 4:14. One doesn’t even have to read the Bible to know that this is so, all one has to do is to read the daily newspaper or see the evening news on TV. News stories are filled with people dying unexpectedly at every age, young, old and in-between.

Jesus’ sacrifice on the cross made it possible for each one of us to have life assurance.

“I give unto them eternal life; and they shall never perish.” —John 10:28. And,

“He that heareth my word, and believeth on him that sent me, hath everlasting life, and shall not come into condemnation; but is passed from death unto life.” —John 5:24.

In order to take out a life insurance policy application must be made to an insurance company. The proposed insured must answer questions regarding his or her health.

Many times a physical exam is required. If the company finds a health problem it will charge a higher premium or decline to insure the person for whom the insurance is requested.

Insurance underwriters can be very selective in issuing a life insurance policy – only qualified applicants are approved.

How different this is from life assurance through Jesus Christ. All applicants are accepted by Him! Jesus said, “Him that cometh to me I will in no wise cast out.”—John 6:37.

The Bible assures us that this invitation is open to all, “For God so loved the world that he gave his only begotten Son that whosoever believeth on him should not perish, but have everlasting life.” —John 3:16.

The form of application is simple: “That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved.”

For with the heart man believeth unto righteousness, and with the mouth confession is made unto salvation. . . for whosoever shall call upon the name of the Lord shall be saved.” —Rom. 10:9,10,13.

Hope in the Word is written by Pastor Roy Delia of New Hope Baptist Church, Ontario. He can be reached in care of the Argus Observer, 1160 S.W. Fourth St., Ontario, OR 97914. The views and opinions expressed in this column are not necessarily those of the Argus Observer

Agents Who Play It "Safe," Failing Their Clients

A letter to the editor I just sent to an insurance publication...



I am reviewing insurance for a client. The agent's renewal review for

last year includes a statement that they never recommend limits of

coverage.



Really?



What exactly is your job then? Are you a clerk for the insurance

companies? "Here is what we can offer. Buy what you want." It's the

big-box approach to insurance service! Why exactly do people buy

insurance from you?



This comes from the world of errors-and-omissions-loss-prevention, a

pervasive cult that insists that everything an agent does must foil

the perverse suit-happy public.



Take no risks - offer no advice, is the mantra.



Horse-hockey! Insurance buyers need informed advice and counsel. The

world of insurance is complicated and complex. It is the agent's job

to stand up and advise the client. Why else would they need you?



While you are at it - remove the stupid message from your voicemail.

"Coverage cannot be bound or amended using a voice mail system." Show

me one case where a customer successfully sued an agent because a

voicemail message included a coverage change, and I will donate $100

to the Red Cross in your name.



Pablum for the mindless insurance lemming.

Washington state to bar insurer from writing new coverage

(Updated -- see note at bottom of this post.)

Washington State Insurance Commissioner Mike Kreidler has issued an order barring Ability Insurance Company, of Omaha, Neb., from writing new policies in Washington for the next six months.

The order, issued Wednesday, takes effect in 10 days.

The order stems from the company’s failure to honor long-term care coverage that lapsed after a senior citizen with dementia failed to make her payments. In such situations, state law allows a consumer to reinstate coverage within five months of the policy’s lapse.

“Situations like this are exactly why we have this law,” said Kreidler. “It protects people who, through no fault of their own, have lost the ability to keep up with their financial records.”

The suspension does not affect the company’s duties under current policies. The company can also continue to renew existing policies.

In this case, the company on March 20, 2009 sent the woman a notice of non-payment, warning that her policy would lapse unless paid within the next 35 days.

When her daughter called the company about a claim on Aug. 4, 2009 – well within the five-month period – the company failed to tell her that the policy had lapsed. The daughter didn’t learn of the lapsed policy until she checked her mother’s mail in September. This was still well within the five-month period.

Nonetheless, the company refused to reinstate the coverage. It contended that the five-month window started the day the premium was due, not at the end of the 35-day period mentioned in its March 20 letter.

Also Wednesday, Kreidler issued a cease-and-desist order telling the company to stop violating state law in such cases. He is also imposing a $10,000 fine on the company.

The company has the right to demand a hearing.

Update on May 4, 2011: Ability has requested a hearing, which automatically stays the suspension pending the outcome of the hearing.

Second update: On June 6, 2012, Kreidler's order was upheld, meaning that the company's authority to write new business was suspended for six months. The company was also fined $10,000.

Appeals Court holds that multiple intentional rammings of vehicle is one occurrence

In my last post I wrote about Mass. Homeland Ins. Co. v. Walsh, 2011 WL 1344554 (Mass. App. Ct.) (unpublished), in which the Appeals Court held that compulsory auto coverage provides coverage for intentional acts.

Apparently the insured rammed the claimant's vehicle multiple times. The court held that although there were multiple discrete collisions, there was only one occurrence; the claimant's injuries arose from "a single continuous episode of ramming of his vehicle that occurred in a short spatial and temporal span."

Threshold Motion Successful

Rajic v. Atkins, [2011] CanLII O.N.S.C. 1024 (S.C.J.)

In this Bill 59 action, the defendant brought a motion to have the action dismissed on the basis that the plaintiff failed to meet threshold after the jury retired to consider its verdict.

Justice Wilson granted the motion and dismissed the action. She found that the plaintiff was an unreliable historian and that there were comments in numerous medical reports about exaggeration, psychogenic pain and illness behavior. She found that the plaintiff’s self report could not be used as a basis for diagnosis because of the many inconsistencies in statements that he made. Since the plaintiff’s experts relied to a great extent on the truthfulness of what the plaintiff reported to them, she did not attach significant weight to their opinions.

The defendant had obtained surveillance of the plaintiff showing him engaged in various activities such as walking without a limp, carrying a 10lb bag of potatoes, clearing snow off his car, working under the hood of his car for 45 minutes, mowing the lawn, raking and bending down to pull weeds. Justice Wilson did not accept the explanation that he was having “one of his good days” when he was filmed by the investigator. Justice Wilson held that his sworn evidence at trial concerning his pain and limitations were inconsistent with the level of function demonstrated on the surveillance tapes.

Credibility is extremely important in a threshold motion and tools such as surveillance can be invaluable, as was seen in this case.

Liberalization

According to Ray Burnham's most excellent insurance dictionary...



"Liberalization clause - automatically broadens the coverage of all policies if a policy revision that would broaden coverage without additional premium is adopted during the policy period; is designed to prevent mass cancellations and rewrites; does not apply to new programs, e.g. the 1984 HO forms replacing the 1997 HO forms."



I do a great deal of work for banks. The insurance policies being sold now are a great deal broader that those sold even a year ago. Many banks are currently insured by three year policies for their bond's and directors' and officers' insurance. That can mean that their insurance is, in some ways, antiquated.



Nobody seems to be calling for liberalization - I think I'll start.

Appeals Court holds that compulsory auto insurance provides coverage for intentional acts, even in PIP claims

The issue in Mass. Homeland Ins. Co. v. Walsh, 2011 WL 1344554 (unpublished) was whether an auto insurer must indemnify its insured against liability for injuries sustained by a claimant as a result of an intentional vehicular assault by the insured.

The court noted that the primary purpose of compulsory insurance is protection of travelers on the highway. It held that coverage is required whether the conduct of the insured is intentional or merely negligent.

The court implied that PIP coverage is also available for injuries arising out of the intentional act of the insured.

Whom do you serve?

We All Serve Someone

As a child, I recall learning that my Dad was the “boss” at his job. I asked him about that one, reflecting on how nice it must be not to “have anyone to tell you what to do.”

He surprised me with his answer. He said, “We all have a boss.”

In vain, he explained how he had to answer to a Board of Directors. It appeared that he had a boss after all.

I then tried to figure out if there is any job where one does not have a boss. Now as an adult, I still have not come up with one.

If you are a doctor, you must serve patients well. If you are a construction worker, you must please superintendants and customers. If you are a policeman, you must work favorably with both your sergeant and the public. Even a rock star must keep his fans happy.

As the song by Bob Dylan proclaims, “You’re Gonna Have to Serve Somebody.”

You may be an ambassador to England or France,

You may like to gamble, you might like to dance,

You may be the heavyweight champion of the world,

You may be a socialite with a long string of pearls

But you're gonna have to serve somebody, yes indeed

You're gonna have to serve somebody,

Well, it may be the devil or it may be the Lord

But you're gonna have to serve somebody.

Spiritually, you also are serving someone. It may be the devil or it may be the Lord, but you are furthering someone’s agenda every day. The devil will have you focus on yourself, and lull you into believing you are independent, rather than deceived. Psalm 14:1 sums it up this way: “The fool says in his heart, ‘There is no God.’”

The Lord will have you focus on others. After all, Jesus was God in the flesh and washed his disciples’ feet. Think of how long and uncomfortable that process must have been for each follower. Service is the manner by which we live out the faith in the grace that has saved those who have been redeemed.

Finally, 1 Chronicles 28:9 warns us that we cannot fool God, even if we fool others or ourselves. “And you, my son Solomon, acknowledge the God of your father, and serve Him with wholehearted devotion and with a willing mind, for the LORD searches every heart and understands every desire and every thought. If you seek Him, He will be found by you; but if you forsake Him, He will reject you forever.

How to file an appeal when a health insurer denies your claim

Picture this: Your 24-year-old daughter is seriously injured in a snowboarding accident. She suffered head injuries. She's heavily sedated. Your doctor wants to do urgent surgery to stem internal bleeding. It will be costly. But your health insurer refuses to authorize the surgery.

What do you do?

In the past, your options were to pay for the procedure yourself, get another opinion that will be less costly or do nothing. All are bad choices and time is critical.

We've posted a new "appeals kit" designed to help when insurers deny requests to authorize a particular service -- or to pay a claim afterward. The site can help you challenge decisions and appeal denials. We're one of the first states to compile this information into a one-stop, consumer-focused site.

In the case above, you'd have several choices:

• File an urgent appeal with your health insurer.
• If the insurer still says no, you can appeal to an independent third-party group made up of health care professionals. They can overrule your insurance company and make it pay. (Over the last three years, nearly 1 in 4 appeals that were sent to an independent review organization by a health plan ruled in favor of Washington consumers.)
• You can sue.
• Or you can file a complaint with our office. 

All this can be complicated, depending on your type of coverage, type of appeal, and the timeline. But the online guide walks you through those options, with a handy worksheet to keep track of key information, etc.

Check it out.
(Corrected two links. Thanks to Public Data Ferret for the heads-up.)

WHAT IS A TRILLION, REALLY?

What is a Trillion, anyway?

Baby Boomers have often proclaimed “50 is the new 40.”

According a recent CNN report, “Trillion is the new billion.”

With all the talk about stimulus funding, deficits and the budget, the numbers lack context. It is hard for us to understand a billion, let alone a trillion.

To start with, let’s start with dollars we can understand. Let’s say I settled a large injury case that netted you $100,000.00. That is clearly One Hundred Thousand dollars.

Ten times that is One Thousand Thousands, or what we call One Million Dollars.

Now, it takes One Thousand Million to make a Billion. That is a one followed by nine zeros.

And a Trillion is a Thousand Billion. Feeling numb yet?

You see, a Trillion dollars is the number 1 followed by 12 zeroes!

One trillion $1 bills stacked one on top of the other would reach nearly 68,000 miles into the sky, or about a third of the way from the Earth to the moon!

A million seconds is about 11½ days. A billion seconds is about 32 years, and a trillion seconds is 32,000 years!

That means that a billion minutes ago, Jesus had just risen from the dead!

To put a trillion dollars in context, if you spend a million dollars every day since Jesus was born, you still wouldn't have spent a trillion!

I sometimes wonder if our elected officials actually understand these numbers.

*Mr. Peel, a Christian Injury Lawyer, may be available to speak to your church or community group. He may be reached through www.PeelLawFirm.com. Other articles maybe found on his blog at www.insurance-coveragelaw.blogspot.com

U.S. District Court denies summary judgment to Pring-Wilson's insurer

I posted here about the declaratory judgment complaint filed by Fire Insurance Company seeking interpretation of the homeowner's policy by which it insured Alexander Pring-Wilson's mother. Pring-Wilson, a Harvard graduate student, had pleaded guilty to involuntary manslaughter of Michael Colono in Massachusetts. Colono's estate filed a wrongful death action against him, and he sought coverage under the homeowner's policy issued to his mother in Colorado.

In Fire Ins. Exchange v. Pring-Wilson, 2011 WL 1162913 (D. Mass.), the United States District Court for the District of Massachusetts has denied the insurer's motion for summary judgment, on the grounds that there were facts supporting the propositions that Colono's death was an accident, and that his death was not reasonably foreseeable under the Colorado law of insurance coverage.

According to the opinion, Pring-Wilson was walking late at night and Colono was parked in a car with two friends, including Sammy Rodriguez. Words were exchanged and Colono got out of the car and began to fight with Pring-Wilson. Rodriguez then got out of the car and joined the fight. Pring-Wilson pulled out a knife he habitually carried and began flailing it in front of him, cutting Colono in five places. Colono and Rodriguez got back in their car, and apparently neither of them at first realized that Colono had been cut. When Rodriguez realized that Colono was injured he sought help. Colono died in a hospital that night.

The fight had taken little more than a minute. As soon as the other two men drove away, Pring-Wilson called 911. Although he denied that he was involved in the fight he reported that he had seen a man get stabbed.

In the civil wrongful death trial, the state superior court judge had concluded that Wilson had not sought help from a nearby store and therefore and not availed himself of all reasonable alternatives to combat, and that Pring-Wilson had employed more force than was reasonably necessary to repel the attack. He also concluded that Pring-Wilson did not intend to kill or inflict serious injury with his knife, but only to drive the other two men away.

The U.S. District Court examined whether Colono's death was an accident (and therefore an occurrence) within the meaning of the policy and under Colorado law. It held that some facts supported the conclusion that Colono's death was accidental, including that Pring-Wilson had not intended to kill or seriously harm Colono; that the fight was quick and confused; that Colono was not aware that he had been wounded; and that at least four of the five knife wounds were very shallow.

The court then examined whether the intentional acts exclusion excluded coverage. It held that the exclusion did not apply because under Colorado law Colono's death was not reasonably foreseeable given Pring-Wilson's conduct.

Vicarious liability of employers for sexual assault

The Manitoba Court of Appeal has recently released a case dealing with vicarious liability of an employer for sexual assault by one of its employees. The Court provides a useful summary of the principles used in determining vicarious liability, as well as a summary of case law involving employers.

In Robertson v. Manitoba Keewatinowi Okimakanak Inc., [2011] M.J. No. 24 (C.A), the plaintiff was an executive assistant who made plans at work with her supervisor (Hart) to socialize after work to celebrate her birthday. They went to a restaurant for dinner and then to Hart’s residence where he sexually assaulted the plaintiff. The plaintiff notified the employer about the assault, who investigated the incident and terminated the Hart’s employment. The plaintiff sued both the Hart and the employer. The employer was successful in a motion to strike the Statement of Claim and the plaintiff appealed.

The test for a finding of vicarious liability was set out by the Supreme Court in Bazley v. Curry, [1999] 2 S.C.R. 534, which the Manitoba Court of Appeal summarized as follows:

1. The test for vicarious liability should focus on whether the employer’s enterprise and empowerment of the employee materially increased the risk of the sexual assault and hence the harm;
2. The enterprise and employment must not only provide the locale or the bare opportunity for the employee to commit a wrong, it must materially enhance the risk in the sense of significantly contributing to it;
3. The appropriate inquiry is whether the employee’s wrongful act was so closely connected to the employment relationship that the imposition of vicarious liability is justified in policy and principle;
4. In determining the sufficiency of the connection between the employer’s creation or enhancement of the risk and wrong complained of, subsidiary factors will be considered such as a) the opportunity that the enterprise afforded the employee to abuse his/her power; b) the extent to which the wrongful act may have furthered the employer’s aims; c) the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise; d) the extent of power; and e) the vulnerability of potential victims to wrongful exercise of the employee’s power.
5. An incidental attack by an employee that merely happens to take place on the employer’s premises during working hours will scarcely justify holding the employer liable because such an attack is unlikely to be related to the business the employer is conducting or what the employee was asked to do, and, hence, to any risk that was created.

The court held that the facts did not support a finding that the employment went beyond providing a bare opportunity, noting that the assault did not occur in the workplace or during work hours, there was no allegation of inappropriate behaviour on prior occasions, there was no allegation that Hart exercised any power in relation to the plaintiff beyond that which is required in every supervisory position, and there was no allegation that the plaintiff was particularly vulnerable to the wrongful exercise of the Hart’s power.

Buyer's Insurance Market Continues

Without any hints as to whom I am speaking of (agents read this blog too - I will not mention the industries or the regions), I just received several proposals on bid projects.



The renewals are being offered at about 20% below last year's premium with significantly better coverage. The competing carriers (multiple agents) are offering quotes at 40% off of the current premium - again, with much better coverage.



The accounts I am speaking of have an average premium of over $200,000 and have not been to bid in about five years.



I say again... If you have not bid your insurance in the past three years using multiple agents and multiple insurance companies, you are probably paying too much and not getting all the coverage you can/should have.



There are reasons not to bid your insurance. That decision, however, has a cost - in coverage and in premium.

How to find old life insurance policies (and other unclaimed property)

The case: A woman recently called us, trying to track down a life insurance policy that her grandmother had bought in 1971. The policy had been sold by one company to another.

"Makes me wonder how many policies go unclaimed," she said.

A lot. According to the New York Times, hundreds of millions of dollars each year.

So how do you track down a relative's old policy?

• Gather as much information as possible: name, insurer and any relevant documents. Try to find the policy itself, which will have a number on it. Make sure you have a copy of the death certificate.

• Tip: If you can't find the company, try going through the person's financial records, looking for payments made to an insurer. Also, look through old mail -- the company may have sent periodic statements or billing reminders. If you know which company they had their auto= or homeowners coverage with, consider contacting that company. People often use the same insurer for life insurance.

• Then, make sure the company still exists, or if it merged with another company. If you live in Washington state, we can help with this, for free. Call us at 1-800-562-6900. If you live in another state, call your state's insurance regulator for help.

• If you can't find any information, even the name of the company, you may want to pay a search company to run your relative's name against insurance industry databases or to contact a large number of insurers directly.

• If the policy goes unclaimed for a long time, insurers are supposed to turn the money over to state unclaimed property funds. Run your relative's name through these free, state-run online search sites. Here's Washington state's official unclaimed property site. And here's a list of similar official unclaimed property sites in other states.

• Tip: Online companies can also search for unclaimed property for you, but with a little time at your computer and the sites listed above, you can do the same thing, for free, yourself.

As for that life insurance case, we helped the woman figure out the current company holding the policy and file a claim.

"This is incredible," she wrote. "We can't thank you enough."

Bonus round: Here are our tips if you're buying life insurance or an annuity.

The "Not Covered" of Property Insurance

Here are the events usually not covered by property insurance:



-Flood

-Earthquake

-Intentional Damage By You

-Animals and Insects



Your agent can help you with the first two.



Don't do the third.



Frequent inspections for the last.

Appellate Division holds that insurer's withholding of evidence does not shift burden of proof in PIP case

Excel Physical Therapy sued Commerce Insurance for reimbursement of costs of treatment of Hayes. Hayes claimed she was injured when riding as a passenger in a car insured by Commerce. Commerce denied the claim, asserting that Hayes was not in the car when the accident occurred. (That type of insurance fraud is called a "jump in.")

During discovery Excel had requested Commerce's claims logs. In response, Commerce provided a claim note that was extensively redacted.

At trial Excel argued that Commerce's improper discovery response shifted to Commerce the burden of proving the affirmative defense that Hayes was not in the insured vehicle when the accident occurred. The trial judge agreed and directed a verdict to Excel.

In Excel Physical Therapy, Inc. v. Commerce Ins. Co., 2011 WL 1167214 (Mass. App. Div.) the Appellate Division overturned the trial judge's decision. It noted, "It is elementary that a claimant under a policy of insurance has the initial burden of proving that he or she is covered under the policy. . . . Commerce was not required to prove its alleged defense to Excel's PIP claim before Excel proved the claim." It was Excel's burden to prove that Hayes was entitled to PIP benefits because she occupied a vehicle insured by Commerce.

The court held that the proper remedy for withholding evidence based on privilege during discovery is the exclusion at trial of the withheld evidence, not a shifting of burdens.

Motion to add defendants after limitation period dismissed

Higgins v. Barrie (City of), 2011 O.N.S.C. 2233 (S.C.J.)

This was a motion by the plaintiff to amend the Statement of Claim to add additional defendants after the expiry of the limitation period on the basis of discoverability.

The plaintiff slipped and fell on March 13, 2006 and alleged that the City of Barrie was negligent in failing to maintain the site of the slip and fall. Barrie’s defence was filed May 13, 2008. Examinations for Discovery took place August 5, 2010 and September 13, 2010. At the examination for discovery of the City representative, counsel advised that the proposed defendant had been contracted by the City to remove snow from the area where the plaintiff fell. The contractor had in turn subcontracted to the second proposed defendant. On November 25, 2010, Barrie’s counsel advised of the name of the subcontractor. Plaintiff’s counsel performed a corporate search on November 30, 2010 and brought a motion to add the proposed defendants December 14, 2010.

Justice DiTomaso dismissed the plaintiff’s motion. The court noted that the passing of the limitation period gives rise to a presumption of prejudice. There is a reverse onus and evidentiary burden on the plaintiff. In the circumstances, the plaintiff’s motion materials failed to disclose any evidence of pre-discovery diligence on the part of the plaintiff or his counsel to determine the identity of the proposed defendants. The motion materials failed to disclose any evidence of any reason why the plaintiff could not have taken any steps to discover the identity of the proposed defendants prior to the examination for discovery. Justice DiTomaso held that waiting 4 ½ years until the examination for discovery of a City representative to make inquiries about potential additional defendants did not amount to due diligent or reasonable efforts. The affidavit of the plaintiff’s legal assistant was totally deficient in providing evidence of due diligence or reasonable efforts made to ascertain the involvement of the proposed defendants or any other defendants. The plaintiff therefore had not met his onus and the motion was dismissed.

Justice DiTomaso’s decision is extremely useful for proposed defendants responding to a plaintiff’s motion to amend. There is a very helpful summary of the case law with respect to adding defendants and the due diligence requirement.

Thank you to Ted Key for bringing this case to our attention.

Ever wonder about the insurance aspects of celebrity breakdowns?

Property Casualty 360 explains it all here.

Soul surfer reminds us of our struggle

PEACE IN THE STRUGGLE

The current movie Soul Surfer tells the story of a young athlete, Bethany Hamilton, whose life revolves around surfing and her faith. But, lurking in the depths off a sun-kissed Hawaiian beach, is a tiger shark.

And he is hungry...

You may have heard about what happened next. The shark’s attack cost her an arm.

How could this 13-year-old ever surf again? And, how would she ever face the fear of the sea that no doubt would cripple her emotionally, as sure as she had been handicapped physically?

In a recent interview with Dennis Rainey’s program,FamilyLife Today, her mother described a day when she said to Bethany, “Let’s just pray that God’s will be done for your life. Let’s pray for God to bring you into the center of His will.” They continued praying this for about two weeks, and the shark attack occurred.

“I don’t pretend to have all the answers to why bad things happen to good people,” Bethany says in her book, also titled Soul Surfer. “But I do know that God knows all the answers, and sometimes He lets you know in this life, and sometimes He asks you to wait so that you can have a face-to-face talk about it. What I do know is that I want to use what happened to me as an opportunity to tell people that God is worthy of our trust, and to show them that you can go on and do wonderful things in spite of terrible events that happen. I don’t think it does any good to sit around feeling sorry for yourself. I made myself a promise: I’m not going to wallow or walk around moaning, ‘Woe is me!’”

It is difficult for me to understand that a shark biting my arm off might ever be in God’s will for my life.

However, our own personal struggle was not with a shark. It was with infertility. Infertility did not seem that it could be in God’s perfect will for our lives, anymore than a tiger shark’s attack.

You see, I had married the loveliest, most gracious and Godly lady I have ever met. By 1997, I waspracticing as an injury lawyer and we were teaching a young married Sunday school class at Bellevue.Trish had earned her nursing degree and was a blessing to every one of her patients.

But something was missing…No. Someone was missing.

How do you miss someone you have never met? Couples who have struggled with infertility know this. How could this be in the will of God? We were happily married, Christian professionals, making agood living, with a nice home featuring an empty room we hoped--one day--to call the “nursery.” We were leading a group at church filled with families having baby showers, but never for us. People would often ask why we did not have a baby yet? Or even worse, “Don’t you two want kids?”

It was difficult to have peace in that struggle. But, like the brave young lady portrayed in Soul Surfer, we found the purpose.

We were more than ready when a developing baby needed adoptive parents. The verse in Joel 2:25 came true in our lives, and we have since become parents, the natural way, twice more.

That means one of our kids is adopted…but I always forget which one!

David & Trish homeschool their three kids and Mr. Peel often speaks to groups or churches, and is heard regularly on WCRV 640 AM. You may contact his office at (901)872-4229 orwww.PeelLawFirm.com.

8 things to know about pet insurance -- and what's it cost?

1) What's it cost? Here in Washington, according to rates filed with our office:

• Coverage for cats ranges from $83 to $926 a year; most policies are $150-$250 annually.
• Coverage for a dog ranges from $107 to $1,059 a year, but most coverage is between $225 and $400 annually.

2) Coverage varies a lot. Some policies cover a broad range of things: accidents, sickness, surgery, x-rays, drugs, hospitalization, cancer treatment, etc. Others are much narrower, covering accidents and illness after a waiting period.

3) Look for exclusions. Insurers consider hereditary conditions pre-existing conditions and may exclude them or limit coverage. They may also exclude or limit coverage for incurable conditions like diabetes or cancer.

4) Qualifying: A vet may have to examine your pet and certify its health before you can insure it.

5) The rules can change when the policy renews. If your pet's treated for something, some insurers may consider that a pre-existing condition when the policy renews, meaning they'll exclude coverage for it.

6) And they can change based on your type of pet. Exclusions may vary by type of pet and breed.

7) Who pays the bills? Some companies will pay the vet directly, but often you'll be responsible for the full amount at the time of treatment.

8) Which vet? Some insurers will require you to use a specific network of vets.

For more specifics, please see our pet insurance page.

Effect of possibility of insurance on jurors

Although the existence of insurance cannot be discussed or even alluded to at civil trials, pretty much every trial attorney assumes that a juror will bring up the fact that damages will be paid by an insurer, whether or not that is true. Here's an article from the wonderfully (or just weirdly) named Jury Research Blawg Konnectionn that discusses research into the issue.

Two agents lose their licenses for misappropriating clients' money

Insurance Commissioner Mike Kreidler has taken action against two insurance agents who misappropriated thousands of dollars from their clients.

• Nancy M. Bishop, of Puyallup, has been notified that the insurance commissioner’s office refuses to renew her insurance license. She has been barred from doing insurance business in Washington and ordered to repay consumers more than $131,000.

A state examination of Bishop’s business records revealed that she violated state insurance laws in dozens of instances, including repeatedly accepting premium payments for policies that did not exist, and keeping the money herself. She also wrongly kept some clients’ refunds and issued false certificates of coverage.

The examination found that Bishop owes dozens of Washington consumers more than $131,000, including overcharges and misappropriated funds.

The violations, according to Kreidler’s order, show Bishop to be “untrustworthy and a source of injury and loss to the public and not qualified to be an insurance producer in the state of Washington.”

• Isaac Mayanja, an agent in Redmond, has had his insurance license revoked.
In 2010, a state investigation determined that Mayanja sold at least 19 unapproved annuities to Washington residents. He also repeatedly engaged in the unauthorized withdrawal of clients’ funds, including forgery and misappropriation of their money.

Specifically, he submitted withdrawal forms totaling $15,570 for several clients’ annuities, changing their addresses on the forms to his own address and then transferring the money to his own personal bank accounts.

In both cases, the agents have the right to demand a hearing. The orders take effect immediately.

U.S. District Court holds that fee dispute between law firm and former associate is not covered by malpractice insurance

Law firm Freedman, DeRosa & Rondeau (FDR) sued a former associate, Adam Clermont, for a portion of fees he collected from clients he continued to represent after leaving FDR. Clermont sought coverage from his legal malpractice insurer, Continental.

The policy covered claims "the Insured shall become legally obligated to pay as damages and claim expenses because of a claim . . . by reason of an act or omission in the performance of legal services by the insured."

"Claim" was defined in the policy as "a demand . . . arising out of: (1) an act or omission, . . . in the rendering or failure to render legal services."

"Legal services" was defined in the policy as "those services . . . performed by an Insured for others as a lawyer, arbitrator, mediator, as well as a notary public, or as a title agent."

"Damages" was defined in the policy as "judgments, awards and settlements." The definition excluded "legal fees, costs and expenses paid or incurred or charged by the Insured," and "injunctive or declaratory relief."

In Clermont v. Continental Cas. Co., 2011 WL 1235389 (D. Mass. 2011), the court held that a fee dispute did not come within the policy's definition of "legal services." It also held that the dispute fell within the exclusion to the definition of damages.

Gross Negligence

The Court of Appeal for Ontario has upheld a decision which found that the City of Mississauga’s response to a winter storm event was reasonable, Billings v. Mississauga (City), 2011 ONCA 247, [2011] O.J. No. 1449 (C.A.).

The plaintiff, Douglas Billings, claimed injuries suffered in a slip and fall accident on a City sidewalk following a major snow and ice storm.

The sidewalk in question had not been cleared of snow and ice within 36 hours after the winter storm.  The City’s snow removal policy required that snow and ice be removed from sidewalks within 36 hours and the City had failed to meet that target. Nevertheless, the trial judge found that the storm had been an extraordinary event. The trial judge carefully reviewed the City’s systems, personnel and policies for dealing with snow storms and concluded that the City’s response to the storm was "completely reasonable."  The City’s response to the storm did not amount to “gross negligence”, which is the standard mandated by statute.

The Court of Appeal agreed with the trial judge’s conclusion.

This case should assist municipalities in defending claims of personal injury caused by snow or ice on a municipal sidewalk. It is interesting that the City was found to have acted reasonably even though it did not meet its objective of clearing snow and ice from sidewalks within 36 hours after a storm event.

Important: Open enrollment for many kids ends April 30th

We cannot say this enough: If you want to buy an individual health plan for your child or enroll them in your individual health plan, you have until April 30 to do it. Do not delay.

Individual coverage is typically bought by people who don't have access to employer-sponsored coverage, or whose employer doesn't cover dependents.

The next open-enrollment period for kids this year won't be until Sept. 15 through Oct. 31.

For more on this, please see our March 14 news release.

More on why it's good to comparison shop for insurance

This article also demonstrates how the rich are different from us.

Seattle couple pleads guilty in storm-damage insurance scheme

The owners of a Seattle construction company have pleaded guilty to attempted theft for an insurance-billing scheme based on inflated storm-cleanup bills.

James and Cheryl-Lin Philo pleaded guilty March 25th in King County Superior Court to two counts of second-degree attempted theft. In addition, their company, Philo Construction Co., of Seattle, is guilty of one count of first-degree theft.

An investigation by Insurance Commissioner's Mike Kreidler's anti-fraud unit found dozens of cases of apparent fraudulent billing by the company.

Here's what happened: In December 2006, a major windstorm swept across Washington, knocking down trees and causing substantial damage to a numerous homes. The Philos hired subcontractors to remove many of those trees from customers’ homes.


In March 2007, a former employee contacted our office, saying that Philo was submitting inflated invoices to insurers. Other workers provided information as well.

An investigation by the agency’s Special Investigations Unit, working with more than 15 insurance companies, found that the Philos had been asking their subcontractors for two invoices for each job. The Philos paid the subcontractors the smaller amount, and then submitted the larger invoice to their customers’ insurance companies for reimbursement.

The markup averaged close to 30 percent, plus another 20 percent that insurers allow for profit and overhead. For example, a $2,150 bill from a tree service company was reported to the insurer as a $2,795 job. Once profit, overhead and sales tax were added, the Philos were paid a total of $3,649.

The Philos also created a fictitious company, Pro Line Construction Resources, to act as a subcontractor when they needed to support a particularly high estimate.

The Philos were each assessed a $500 victim penalty assessment. They'll also pay restitution totalling $19,849.15, and $220 in court costs.

Self-Insurance Receives Seal of Approval

For the past several months I have been managing expectations about the content of separate reports on self-insured group health plans being developed by DOL and HHS. Or more to the point, I have preparing people for reports that conclude all sorts of awful things about self-insured plans. Not that I believe such anticipated criticisms are valid, but rather that it was obvious that self-insurance was “set up” to take a hit based on the PPACA legislative language mandating the studies, in particular the HHS study on the large group market. The stated objective of this study was to compare self-insured plans with fully-insured plans, which is fair enough. But Section 1254 instructs the HHS to investigate multiple perceived problems with self-insured plans while not including similar guidance for fully-insured plans, therefore essentially setting up a one-way fishing expedition. And by the way, this section along with the preceding section mandating the DOL report, were inserted at the last minute as part of the reconciliation process almost certainly at the request of the health insurance industry. So the fix was in from the jump. It has also been my view that there is a negative bias toward self-insurance within the regulatory agencies which would taint the review and reporting process. I say this based on fact that some key officials within these department have previously worked for members of Congress and/or think tanks that have been critical of self-insurance. My suspicion of such bias was heightened after a meeting with HHIS-contracted researchers who asked a series of very pointed about self-insurance that seemed to be “planted” by those with an interest in making self-insurance look bad. The researchers took a particular interest in what they termed “sham self-insurance,” translated to mean self-insured health plans utilizing stop-loss insurance with low attachment points. Now this line of questioning was easily dealt with of course, but we did get the impression that this could well be a situation where the agencies were digging for evidence to support pre-determined conclusions. But apparently there was not a thumb on the scale after all based on a review of the final reports that were released this week. So much for my prescient reputation! The main concern about the DOL report was that they would use bad and/or insufficient data to conclude there are solvency problems with self-insured health plans. But the agency acknowledged that they could not reach any policy conclusions due the lack of quality data. The HHS report appeared to be an opportunity for a host of self-insurance criticisms to be validated by the federal government. You know, the regular canards such as self-insured plans are less costly than traditional issuance because they deny lots of claims and offer skimpy benefits. But I am sure to the consternation of our friends at AHIP and others with market share or other motivations, the HHS report effectively refuted all of the common self-insurance criticisms by concluding little or no difference as compared to fully-insured plans. And for the icing on the cake, consider a little nugget tucked into an appendix of the DOL report which noted that from 2009 to 2010 for employers with more than 200 covered lives, the average fully-insured premium increased by $808 compared to an average increase of $248 for self-insured premiums. So instead of getting branded with a regulatory scarlet letter, self-insurance has effectively received a seal of approval. What an interesting turn of events.

Samaritan Ministries ordered to stop offering unauthorized insurance in Washington state

This post has been updated. See below.

Washington state Insurance Commissioner Mike Kreidler on Friday ordered a health-care sharing ministry to stop offering unauthorized insurance in Washington.

Illinois-based Samaritan Ministries International, a nonprofit corporation, maintains that its member “need-sharing” program is not insurance. Under Washington state law, however, the program is considered insurance.

Insurers doing business in Washington must register with the state, submit their policies and rates for review, and meet state financial solvency requirements. Samaritan Ministries hasn’t done any of those things.

Kreidler on Friday issued a cease-and-desist order telling Samaritan to stop engaging in the unauthorized business of insurance in Washington state, which includes organizing the transfer of money between members.

“Our insurance laws exist to protect consumers and make sure that insurers live up to their promises,” said Kreidler. “Members of groups like this don’t have those protections.”

Samaritan Ministries members agree to pay monthly shares of $135 to $320 to other members who have medical costs, plus a $170-a-year administrative fee. A separate program is available to cover auto-accident injuries.

Members submit medical claims, and the group directs members to send their money to members with medical bills. The group says it has a total of 15,500 members in all 50 states, with shares totaling about $3.5 million per month.

The cease and desist order includes Samaritan Ministries International, its Christian Health Care Newsletter and 20 individuals.
Samaritan Ministries has the right to demand a hearing. The order takes effect immediately.

Update (5/31/2011) The order has been rescinded. On May 11, 2011, Washington Gov. Chris Gregoire signed Senate Bill 5122 into law, excluding health sharing ministries such as Samaritan from regulation under the Washington state insurance code.

Shopping for coverage can pay off

Although the couple that writes this blog, Sustainable Personal Finance, is Canadian, their point in this post on insurance agents is well-taken here as well: it never hurts to shop around.

As with all things in life, however, the cheapest coverage is not necessarily what you need. What is included in the coverage? What is excluded? What is the reputation of the insurer with respect to paying or fighting fair claims? What is the deductible? Does the property coverage provide replacement cost or present value? Do attorney's fees reduce the coverage limits? Is the insurer in danger of going out of business?