Articles Posted in Insurance Denial

shutterstock_1187007133-300x194As Michigan’s auto insurance laws take effect, many accident victims are already facing the consequences of the drastic changes. The new rules are Part II of the state’s auto insurance overhaul. The first facet of the changes took place last year and provided Michigan drivers with an option of how much no-fault medical coverage they must purchase with their auto insurance policy. Before the overhaul, the law required Michigan motorists to purchase unlimited, lifetime coverage.

The most critical change impacts those receiving care at rehabilitation clinics and from other providers who treat accident victims. The changes will require these centers and providers to cut their prices by 45%. The reductions will likely impact the nearly 7,000 Michigan accident victims who are receiving treatment paid for by their auto insurance policies. For instance, as described in a recent news report, a case manager who handles the care of accident victims recently described how the changes are already impacting her clients.

The woman’s client has quadriplegia and a traumatic brain injury from a car accident. He is unable to engage in typical daily activities without assistance. The man requires assistance leaving his bed, using the restroom and getting food and water. Unfortunately, he is dependent on his caregivers, previously paid for by his insurance company, to do any of these necessary tasks. The recent changes forced the case manager’s company out of business, which has left him without any care. The case manager frantically tried to arrange care for him, but without family or friends, she was forced to take him to a hospital.

shutterstock_1167968773-300x193The state supreme court recently issued a decision in a case stemming from a Michigan car accident victim’s insurance claim. The plaintiff’s insurance company issued the plaintiff and his wife a six-month no-fault insurance policy from September 26, 2017, through March 26, 2018. The policy provisions required the plaintiff to pay a monthly premium and allowed the insurance company to cancel the policy if they provided the plaintiff with ten days’ notice.

During the policy period, the insurance company mailed the plaintiff a bill and advised that the company would cancel the policy effective October 27, 2017, if the plaintiff did not pay the premium on time. The plaintiff failed to pay the premium, and the insurance company offered to reinstate the policy with a lapse in coverage. In November 2017, a driver struck the plaintiffs while they were walking across a street. The plaintiff and his wife suffered damages as a result of the accident. Two days after the incident, the plaintiff sent a premium payment to their insurance company, and the company reinstated their policy that day. However, the insurance company advised the plaintiff that there was a lapse in coverage and they would not cover the claim. The plaintiffs filed a lawsuit against their insurance company. In response, the insurance company contended that the policy was canceled and not in effect at the time of the incident.

The primary issue on appeal was what constitutes a valid cancellation notice under MCL 500.3020(1). Courts evaluating contract disputes typically focus on reviewing the “plain language” of the statute. Specifically, the outcome of this case hinges on the meaning of the phrase “notice of cancellation.” The objective of this statute is to ensure that those who are insured under a policy are allowed to satisfy the condition that prompted the cancellation. This allows the insured to revive their policy, obtain alternate coverage, or adjust their activities to reduce the risk of operating their vehicles without insurance.

Okay-Bone-240x300Motor vehicle accidents (“MVAs”) are extremely dangerous. An average mid-sized sedan weighs about one-and-a-half tons. Even when moving at relatively low rate of speed, the force of a one-ton collision is enormous. A head on collision is far worse. If a vehicle going 47 mph strikes another vehicle traveling 64 mph, the collision is of a similar magnitude to a vehicle traveling at 111 mph ramming into a concrete barrier. Modern safety features have dramatically reduced the risk of injury in a MVA, but there is little technological innovation can do to offset the impact of a high-speed head-on collision.

Some MVAs cause immediately life-threatening injuries. First responders take the injured directly to a hospital for critical care. However, other incidents may not cause injuries that require the same type of immediate life-saving intervention. The injured party will be offered the option to travel to a hospital in an ambulance, but instead of accepting emergency transport, the individual injured will decline for a number of reasons. He or she might feel embarrassed or ashamed of being in an accident; the cost of the ambulance service will cause financial hardship; the idea of taking an ambulance when not in a life-threatening situation may feel selfish; pride may play into the decision-making process; or the injured person may just not feel like they’ve suffered a severe enough injury to justify that level of attention.

While some of those who decline emergency transport may go directly to the emergency room by other means, many decide to wait and see their primary care physician. Others will not seek medical attention at all, or simply decide that the injury is not severe enough for pay for the office visit, waiting to see if the injury heals on its own. While financial concerns are valid—our system’s fundamental flaw is that seeking medical treatment can end in bankruptcy—it is always wise to see a doctor after an MVA.

Neumann Law Group has a proven track record challenging insurance coverage denials. Today, more and more businesses are suffering extensive losses, either directly from the corona virus, or from governmental action shutting down operations to mitigate the public health risk. Many businesses have paid insurance companies premiums for years to ensure protection in the event of a business stoppage by purchasing business interruption and civil authority policies or riders. Now, when small businesses need the most help, insurance companies are not providing much needed assistance.

Nationwide, almost all insurers offering business interruption coverage or civil authority coverage have denied claims related to COVID-19. The two types of policies are interrelated. Business interruption coverage allow companies to hedge against certain losses when the business suffers physical damage or loss that interferes with its ability to operate. Civil interruption coverage generally allows recovery when a civil authority issues an order closing a business or interfering with normal operations.

First and foremost, if you don’t know whether your business has such coverage, call your agent and find out. Most policies require the insured to submit claims promptly, so making a timely claim is critical. The types of injury upon which business have filed claims include lost income due to business closure, lost income due to public knowledge of infections on premises, costs of sanitization and employee testing, and a host of other claims specific to particular businesses.

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