Aledo insurance lawyers will not often run across what happened in this case, but it something to know about. The case is styled, McCallas v. State Farm Mutual. The opinion was issued by the Houston Court of Appeals [14th Dist.] in 1986.
The issue presented is whether the trial court was correct in holding that Personal Injury Protection (PIP) benefits can be denied on a geographic basis. This appeals court agreed with the decision of the trial court.
On March 3, 1984, McCalla was involved in an automobile accident on the island of Jamaica. He was hospitalized and treated. He has incurred expenses in excess of $2,500. Before the accident, McCalla was issued an insurance policy which was in effect at the time of the accident. This policy contained PIP coverage which was mandated by the Legislature. State Farm denied benefits because the policy applied only to accidents and losses which occurred in the United States and its territories or possessions, Puerto Rico or Canada. Thus, State Farm argued, the policy was not in effect when McCalla was driving in Jamaica.
Texas Insurance Code, Section 1952.152 provides in part as follows:
(a) An insurer may not deliver or issue for delivery in this state an automobile liability policy, including a policy provided ..., unless the insurer provides personal injury protection coverage in the policy or supplemental to the policy.
1952.158 An insurer shall exclude benefits to any insured, or the insured's personal representative, under the coverage required by this subchapter if the insured's conduct contributed to the injury the insured sustained and that conduct:
(1) involved intentionally causing injury to the insured; or
(2) occurred while committing a felony, or while seeking to elude lawful apprehension or arrest by a law enforcement official.
McCalla argued the only exclusions allowed are those contained in Texas Insurance Code, Section 1952.158 and that State Farm cannot exclude coverage based on territorial limitation since it does not fall within the exclusions mandated by the Legislature. When the Legislature specifies a particular extent of insurance coverage, any attempt to void or narrow such coverage is improper and ineffective according to the Texas Supreme Court. When specific exclusions or exceptions to a statute are stated by the Legislature, the intent is usually clear that no other shall apply.
The Texas Supreme Court held in 1978, what could be termed firm language, that the PIP statute sets forth the only exclusions of PIP benefits authorized by statute. Any attempt to add additional exclusions is repugnant to the statute.
McCalla cited to additional authority which holds that the only exclusions allowed for denying PIP are those found in the PIP statute. These authorities are very persuasive as to the public policy intent of the Legislature in enacting the PIP statute, however, the court did not find them controlling in this case.
Unlike the other decisions in which concerned the validity of written waivers and which dealt with the interpretation of accident in the policy, this question is one of basic policy coverage. No exclusion is involved.
The policy issued to McCalla covered accidents which occurred in the United States, its territories and possessions, Puerto Rico or Canada. It did not apply to Jamaica. While the PIP statute dictates the type of coverage which must be provided, it does not dictate where the policy is effective. When McCalla purchased his insurance he knew or should have known that it did not cover accidents which occurred outside the jurisdictional limits stated in the policy. If he wanted a policy with coverage beyond the jurisdictional limits stated then he could have negotiated with the insurer for this extended coverage. An insurance policy is a contract entered into between the parties whereby each party becomes bound by the terms of the agreement.
Other decisions have used the distinction between basic coverage and exclusion. A policy was not in effect when the insured had an accident in a vehicle not covered by the policy.
When Michael McCalla had his accident in Jamaica, he was outside the territorial limits of his policy, therefore, he was outside the basic coverage of his policy.
Recently in Personal Injury Protection (PIP) Category
Aledo insurance lawyers will not often run across what happened in this case, but it something to know about. The case is styled, McCallas v. State Farm Mutual. The opinion was issued by the Houston Court of Appeals [14th Dist.] in 1986.
Grand Prairie insurance lawyers will deal with auto policies from time to time and when doing so will also deal with the portion of the policy dealing with Personal Injury Protection (PIP). The Beaumont Court of Appeals issued an opinion in 2000, dealing with how PIP benefits are paid. The style of the case is, Texas Farmers Insurance Company v. Carabell Fruge. Here are some of the relevant information on the case.
This case raises questions related to PIP provided in an automobile liability insurance policy as required by Texas Insurance Code, Section 1952.151 through 1952.161. The underlying issue in this case is whether or not an insurance company breached its contract by placing the names of medical providers and Medicare as co-payees on checks paying PIP benefits to Carabell Fruge. The Court held that the company did breach its contract but that it was entitled to name Medicare as a co-payee to part of the PIP benefits.
Jackie Ryan had purchased an automobile liability insurance policy from Texas Farmers Insurance Company that provided her with $2,500 in PIP coverage. Fruge was a passenger in Ryan's vehicle and was injured in a car wreck. After her injury, Fruge's attorney filed on her behalf a PIP claim with Farmers supported by documents reflecting medical expenses of $3,490. Some of the supporting documents contained some reference to Medicare. At least one document was stamped "Benefits Assigned." Farmers responded to Fruge's claim by mailing her six checks totaling $2,500.30. Four of the checks, totaling $1,854.30, named medical providers, Medicare, or both as co-payees with Fruge. All six checks named the law firm representing Fruge as a co-payee. Fruge's attorney returned all six checks with a letter advising Farmers that "some or all" of the medical bills related to the checks naming co-payees had been paid, complaining that it would take six months to get all of the necessary endorsements, and demanding payment naming Fruge as the sole payee.
Fruge brought an action in contract under the PIP statutes against Farmers to recover $2,500.00 in benefits, as well as penalty and attorneys fees. The trial court found that Farmers had wrongfully put the names of health care providers on the checks and granted an instructed verdict submitting only the question of attorneys fees to the jury. Farmers complains of the instructed verdict, asserting that it was obligated to honor assignments to providers and that Medicare had a primary subrogation interest.
The Court rejected Farmers' assertion that it was obligated to honor assignments to Fruge's medical providers because the Court concluded that according to the terms of the policy the stamped notations "Benefits Assigned" was not an assignment. According to the terms of its policy, Farmers would honor assignments for medical expenses if it received a written assignment signed by the covered person to whom such benefits were payable. And Farmers offers no authority to support any obligation on its part to go beyond the terms of its policy. Absent a valid assignment conforming to the language of Farmers' policy, Fruge was right to expect that PIP benefits would be made payable to her alone.
Naming Medicare as a co-payee is another matter. Federal law provides that any payment of medical costs by Medicare for which private insurance is the primary payer is conditioned upon reimbursement from the insurer. 42 U.S.C. § 1395y(2)(B)(i). Medicare is a secondary payer for services covered under no-fault insurance. 42 U.S.C. § 1395y(2)(A)(B)(ii); 42 C.F.R. § 411.50(c). And "no-fault insurance" includes "personal injury protection" coverage. 42 C.F.R. § 411.50(b). This is an instance where federal law preempts state law. To avoid the risk of making the same payment twice, Farmers may have been correct in not making an unconditional payment to Fruge reimbursing her for expenses it should have known had already been paid by Medicare.
While Farmers is correct in its assertion that federal statutes and rules preempted state law, it cannot, on the face of the record, claim that it had reason to suspect that Medicare was entitled to the sum represented by the checks that named Medicare as co-payee. Though the record speaks of six checks and Farmers appears to have named Medicare as payee on checks totaling $1,352, the record only shows a Medicare payment of $168.56. Accordingly, it appears that Farmers wrongfully named Medicare as a co-payee to part of PIP benefits.
The Court concluded that Farmers breached its contract and that Fruge was entitled to recover benefits, penalty and attorneys' fees under the PIP statute. This Court affirmed the judgment, but reformed the judgment to allow Farmers to show Medicare as co-payee on $168.56 of the proceeds of the judgment. The judgment was reformed to decree that the Carabell Fruge have and recover of and from the Texas Farmers Insurance Company the sum of $2,331.44 to be paid directly to her and the sum of $168.56 to be paid to Carabell Fruge and Medicare as co-payees.
These subrogation interests and State and Federal laws regarding them can be very confusing and are reasons why experienced Insurance Law Attorneys need to be involved in these matters.
Dallas insurance lawyers need to understand how Personal Injury Protection (PIP) benefits work in an auto policy.
The Texas Insurance Code, Section 1952.152, tells us that PIP is required coverage in an auto policy unless this coverage is rejected in writing. However, Section 1952.153, tells us that the minimum requirement is only $2,500.
Most people end up rejecting this coverage. For those who opt to get the coverage, most get only the $2,500 minimum. The most this author has seen on a policy is $100,000. Even though that has only been seen once, amounts of $5,000 to $10,000 occur, but rarely will the amount be greater than $25,000.
So now, how is that money recovered?
The insurance policy for PIP coverage will provide that the company will pay PIP benefits because of "bodily injury resulting from a motor vehicle accident and sustained by a covered person."
There have many lawsuits over when the PIP coverage is payable. Here are a few examples of the lawsuits:
1) A 1980, case where the claimant was injured while tripping over a curb four steps away while exiting an auto was denied by the court wherein they said the accident did not constitute a motor vehicle accident.
2) A 2004, Texas Supreme Court case contrasts with the above where a person was exiting his vehicle and became entangled with the door and was injured. The court found a casual connection between the vehicle's use and the injury producing event and thus said coverage existed.
3) A 1996, Houston Court of Appeals, [1st Dist.] case where the court denied coverage where the injuries resulting from a drive by shooting while the victim was sitting in the covered vehicle. The court said this did not constitute a "motor vehicle accident."
4) Another 1996, Houston Court of Appeals, [1st Dist.] case where the insured was ordered out of his vehicle by his passenger and then shot. Again, the court said this did not constitute a "motor vehicle accident."
5) Another court found there was coverage where a shooting was involved. In that case a child was climbing through the rear window of a pickup truck, causing a gun to go off that was in the truck. As in (2) above, the court found a casual connection between the vehicle's use and the injury producing event and thus said coverage existed.
According to Texas Insurance Code, Section 1952.155, PIP is a coverage that is payable without regard to the fault or nonfault of the named insured or recipient in causing or contributing to the accident and without regard to any collateral source of medical, hospital, or wage continuation benefits. - What this essentially allows, is a double recovery in many situations. For instance if a person has health insurance or is some other type of benefit that covers his medical bills and or lost wages, PIP benefits are still payable - thus the double recovery.
The Texas Insurance Code provides for substantial penalties in Section 1952.157 for an insurance company's failure to timely pay PIP benefits. These penalties provide for recovery of a 12% penalty, attorney fees, plus the recoveries available under other parts of the Texas Insurance Code, which call for an additional 18% penalty and up to a trebling of damages in some situations. This means that an experienced Insurance Law Attorney should be consulted whenever the company refuses or delays in making benefit payments under a PIP claim.
Dallas insurance lawyers and those in Mesquite, Garland, Irving, Richardson, and other places will occasionally run across issues related to Personal Injury Protection (PIP) claims. In that regard, when it relates to an issue regarding lost wages, it would be good to know about the 1979, case, Slocum v. Union Pacific Insurance Company. This opinion was issued by the Houston Court of Appeals.
Here is what it tells us:
Slocum brought this suit to recover lost income based on the coverage afforded by the PIP clause of his automobile insurance policy. Union Pacific's motion for summary judgment was granted on the sole ground that Slocum was not a wage earner or income producer.
Randy Slocum, an engineering student, accepted an offer of summer employment and was to begin work as an offshore "roustabout" on the Tuesday following the Memorial Day weekend. However, he was involved in an automobile accident over that weekend and did not report to work as planned due to the injuries received. His claim was denied by the insurer, the United Pacific Insurance Company.
PIP coverage is regulated by Section 1952.151 of the Texas Insurance Code. The relevant portion of that article provides in the case of an income producer, payment of benefits for loss of income as the result of the accident; and where the person injured in the accident was not an income or wage producer at the time of the accident, payment of benefits must be made in reimbursement of necessary and reasonable expenses incurred for essential services ordinarily performed by the injured person for care and maintenance of the family or family household. . . .
Slocum's insurance policy contained an endorsement, the standard PIP provision, which defines a wage earner or income producer as "a person who at the time of an accident was in an Occupational status where such person was earning or producing income. . . ."
In his response to Union Pacific's motion for summary judgment Slocum presented summary judgment evidence that he had accepted an offer of definite employment to begin on the first working day after the accident. The affidavit of the employer set forth the conditions of the employment and showed the minimum wage Slocum would have earned. Slocum had worked for a different employer the previous summer and had earned a scholarship paying him $500.00 a semester for each of the two intervening semesters.
The PIP outlined in the Insurance Code is a type of no-fault insurance designed to provide benefits to the insured and family for injuries sustained in automobile accidents. Neither the statute nor the policy definition of income producer can be so strictly construed as to deny recovery of lost income by one who, like Slocum, had accepted a firm offer of employment, was to report for work at a definite time and at a set rate of compensation, but was prevented by injuries sustained in automobile accident from enjoying the fruits of his labor. It was error for the trial court to hold, as a matter of law, that Slocum, because he had not yet reported for work, was not in an "occupational status" at the time of the accident. In light of this holding that at least a fact question was presented as to whether Slocum was a wage earner or income producer as defined in the policy, it was unnecessary to decide whether the policy definition of "wage earner" or "income producer" was in conflict with the Insurance Code. The judgment appealed from was reversed and the cause was remanded for trial.
Dallas insurance lawyers and those in Garland, Mesquite, Richardson, Carrolton, and other places in Dallas County will end up seeing cases involves claims for Personal Injury Protection (PIP) benefits.
PIP is required coverage in Texas on automobile insurance. The Texas Insurance Code, Sections 1952.151 through 1952.161, discuss this coverage. All auto policies must provide PIP unless it is rejected in writing. Because of this coverage, there is a significant amount of Texas drivers who have this coverage.
The State of Florida also requires this coverage but it is noteworthy that their requirements are different than those in Texas. But as Florida goes on auto coverage, so has Texas in many cases.
News from Florida regarding PIP coverage is noteworthy and is as follows:
A new law, designed to stop insurance fraud in central Florida takes effects in January, 2013.
"Floridians are paying more than they should in auto insurance because the insurance companies are paying more than they should in claims because there's so much fraud and abuse in the system," said Lynne McChristian with the Insurance Information Institute.
McChristian said Florida has more cases of personal injury protection fraud than any other state in the county and Orange County is the third-highest source of false claims in the state.
The fraud occurs when someone stages a car accident, then seeks treatment and payment for injuries they don't really have at a clinic in on the scheme.
Beginning Jan. 1, people who get in car accidents will no longer be able to file claims to pay for massages or acupuncture therapy. Under the new law, payment for non-emergency treatment will be capped at $2500 -- down from the prior $10,000 limit -- and will only be available when referred by a physician.
"This is a measure to keep those costs in check and consumers will benefit if those measures work as they're intended," said McChristian.
She said the change will eventually save drivers money. According to McChristian, once fraudulent claims go down, so will insurance costs.
Personal injury protection makes up about 20 percent of drivers' overall insurance costs.
Floridians also pay an annual fraud tax of about $115 for a two-car family, because of so many fraudulent claims.
In Texas, the minimum amount of PIP coverage is $2,500 but the amount can go as high as $100,000 with some auto insurance companies, if a person chooses to have that much coverage.
Fort Worth lawyers and those in Saginaw, Lake Worth, Benbrook, Keller, Wylie, and other places in Tarrant County would need to keep up with news related to Personal Injury Protection (PIP) insurance benefits.
The Orlando Sentinel ran a story on Ocotber 1, 2012, that briefly discussed PIP in Florida. The article tells us that a group of chiropractors, massage therapists and acupuncturists have sued the state over a new personal injury protection law that lawmakers heralded as key to reducing auto insurance rates in Florida.
The lawsuit says that the new PIP law, passed this spring, "imposes sweeping changes and significant restrictions on both health care providers and consumers."
The law, passed this March, made a number of changes to the state's no-fault accident system, which pays up to $10,000 in medical care in an accident, regardless of who is at fault. Now, accident victims must seek treatment in 14 days. They are banned from seeking acupuncture or massage therapy, and chiropractors can only receive $2,500 for treating patients, unless they can get it classified as an emergency medical condition.
Gov. Rick Scott, Chief Financial Officer Jeff Atwater and lawmakers pushed the bill through during the final days of the legislative session and promised that it would bring down rates. However, that may or may not happen.
October 1, is the deadline for insurers to file with the state what they will be charging customers. Under the changes, part of which became law in July, insurers are required to reduce rates by 10 percent by October 1, or explain why they cannot do so.
Insurers have expressed doubts that the reduction would be achieved so quickly.
PIP is a coverage that is available on all auto insurance policies in the State of Texas. The Texas Insurance Code, Sections 1952.151 thru 1952.161 is where the laws are found dealing with PIP in Texas. The minimum amount required to be on all policies sold in Texas is $2,500. There is no maximum that is prescribed by law.
The majority of drivers in Texas reject PIP coverage. However, it is important to note that a rejection of PIP coverage must be in writing. One estimate says that only about 10% of drivers opt to get this coverage on their auto. A vast majority of those who have PIP only have the minimal amount of $2,500.
Probably the biggest reason people reject PIP coverage is that the cost of this coverage is high compared to lots of other types of coverage. One reason PIP coverage is high is that any amounts paid under PIP cannot be recovered from responsible third parties by means of subrogation.
PIP covers reasonable and necessary medical expenses up to the limits of the coverage and it pays up to 80% of lost wages.
An option to PIP coverage is "medical payments coverage," also know as "med-pay." Med-pay is a much cheaper alternative to PIP for two reasons. One is that med-pay does not cover lost wages. The other reason is that med-pay can be subrogated. In other words, with med-pay, an insurance carrier has the chance to recover monies it pays out in coverage by subrogation against responsible third parties.
There are many things to be aware of from a legal standpoint when making claims for benefits related to PIP and med-pay. An experienced Insurance Law Attorney would know these issues and be able to discuss them with someone who finds themselves in a position of being able to taking advantage of these benefits.
Grand Prairie insurance attorneys and those in Irving, Duncanville, De Soto, Lancaster, Richardson, Garland, Mesquite, Farmers Branch, Carrolton, and other places in Dallas County should have a good understanding of the way that Personal Injury Protection (PIP) benefits work. The State of Florida through it's department of insurance mandates coverage much the way Texas does. The SunSentinel ran an article dealing with PIP complaints. Here is much of what the article says.
Chief Financial Officer Jeff Atwater blasted the auto insurance industry Tuesday, saying it needed to "quit the whining" over reductions to auto insurance rates required as part of reforms to the state's no-fault auto insurance law.
"The insurance industry came to each committee meeting, they lobbied these legislators - 'You've got to make these changes so we can help our customers,'" Atwater said in an interview. "But no sooner do suggested reductions come out and everybody starts running for cover."
Atwater laid into the industry following the first meeting of a new task force dedicated to fighting what insurers have called "epidemic" fraud in Personal Injury Protection claims. He said that the industry practically "begged" lawmakers to do something about PIP fraud and high rates.
Lawmakers made sweeping changes to the law this spring, essentially restricting who can treat injured motorists and when. The changes phase in between July 1 and Jan. 1. The bill also requires that insurers either reduce PIP rates by 10 percent this October or explain why, and further cut rates by 25 percent by January 2014, or explain why.
But while a draft report by Pinnacle Actuarial Resource, commissioned by the Office of Insurance Regulation to evaluate the changes, said that the law could result in reductions of 12 percent to 20 percent, it added that those changes may simply offset increases for other coverages.
The release of the report Friday night prompted statements from the Personal Injury Federation of Florida and Property Casualty Insurance Association of America, which are both on the new strike force, that said it would take time before rates are cut -- to see if the changes were resulting in less fraud -- and also noted possible legal challenges.
Mike Carlson, executive director of PIFF, in response to Atwater's comments, said that the "market needs time to react."
"However we remain cautiously optimistic that consumers will see savings at the end of the day if the law is not corrupted by the cottage industry of rapacious lawyers and medical providers who have lorded over the PIP system all these years," he said.
The strike force, which used Tuesday as an organizational meeting only, will next meet in December.
In Texas, the Texas Department of Insurance regulates the insurance industry. The PIP statutes are found in the Texas Insurance Code, Section 1952.151 thru 1952.161. Of course the regulation and enforcement of these statutes is found throughout the Insurance Code and it's various sections.
PIP is suppose to be a "no-fault" coverage. There is not suppose to be an investigation as to who is at fault in an injury causing event. Rather the insurance company investigation is limited to making sure the injury was in some way connected to the use and operation of the insured automobile and making sure the injuries are legitimate.
Any time that a PIP claim is denied by an insurance company, the insured should seek the immediate help of an experienced Insurance Law Attorney.
Fort Worth Insurance Lawyers and those in Saginaw, Grapevine, Benbrook, Burleson, and other places around Tarrant County need to grasp how courts interpret the different words and phrases in an insurance contract.
The meaning of "motor vehicle accident" may seem to be an easy to understand phrase but the phrase was the subject of a lawsuit that went all the way to the Texas Supreme Court. This 2004, case is titled, "Texas Farm Bureau Mutual Insurance Company v. Jeff A. Sturrock." Here is some background.
Jeff Sturrock drove his truck to work, parked, and turned off the engine. While exiting the truck, he entangled his left foot on the raised portion of the truck's facing. Sturrock injured his neck and shoulder in his attempt to prevent himself from falling from the vehicle. Sturrock filed a claim for Personal Injury Protection (PIP) benefits under his vehicle's insurance policy, issued by Texas Farm Bureau.
It should be noted that the Texas Insurance Code requires every auto policy issued in Texas to provide PIP coverage, unless rejected by the insured. Sturrock's policy provides, in pertinent part:
A. We will pay Personal Injury Protection benefits because of bodily injury;
1. resulting from a motor vehicle accident; and
2. sustained by a covered person.
There is no dispute that Sturrock is a 'covered person' under the policies. The dispute is whether or not his injuries were the result from a "motor vehicle accident."
Sturrock sued Farm Bureau for breach of contract and violations of the Texas Insurance Code. Both parties filed motions for summary judgment. The case was heard on an "Agreed Statement of Facts" pursuant to Texas Rules of Civil Procedure, wherein the trial court would apply the law to these agreed facts and determine whether Sturrock's injuries resulted from a 'motor vehicle accident' within the meaning of the policy. The trial court ruled in favor of Sturrock and this appeal followed.
Farm Bureau argued that accidents like the one Sturrock experienced do not fit within the plain meaning of "motor vehicle accident" because the term requires some involvement between the covered motor vehicle and another vehicle, person, or object. Because Sturrock's accident did not involve another vehicle or person, Farm Bureau contends Sturrock's injuries did not result from a "motor vehicle accident." Conversely, Sturrock claims the court has determined that a "motor vehicle accident" does not require a collision, and the incident at hand was a "motor vehicle accident" because the vehicle itself produced the injury.
The Texas Department of Insurance had weighed in on this issue asking the court to reject Farm Bureau's argument, asserting that it posits an absurd interpretation which, if accepted, would result in greater coverage for passengers than for actual premium paying insureds.
This court said that it agreed with the Texas Department of Insurance that Farm Bureau's cramped interpretation would severely limit an insured's no-fault coverage in a manner that would contravene its purpose and lead to absurd results. Under Farm Bureau's formulation, a passenger who fell from Sturrock's truck in the same way would be covered, but Sturrock himself would not. Sturrock would be covered if he had fallen out of his car onto another person, but not if he had fallen directly onto the ground. He would be covered if a tire dislodged from another vehicle and hit his car, but not if his own tire blew out and caused his vehicle to roll over. Sturrock would be covered if he were run over by a vehicle with a faulty parking brake, but not if his own vehicle ran over him because of the same defect. Neither the policy's language nor its context indicates a construction that would deny no-fault benefits to insureds who suffer injuries caused by their own covered vehicle.
The court pointed out that this is not to say that any accident involving another vehicle, an object, or a person constitutes a "motor vehicle accident." While a collision or near collision is not required, the vehicle must be more that the mere situs of the accident or injury producing event.
If Sturrock had finished exiting the truck and then fell, or if he had fallen out of the car without any involvement of the vehicle, there would be no coverage. But here, the vehicle's door facing was a causative factor in Sturrock's fall.
In conclusion, the court said, "We hold that a 'motor vehicle accident' occurs when (1) one or more vehicles are involved with another vehicle, an object, or a person, (2) the vehicle is being used, including exit or entry, as a motor vehicle, and (3) a casual connection exists between the vehicle's use and the injury producing event. Here, Sturrock was injured when his left foot became entangled with his car's facing while he was exiting the vehicle. We conclude that Sturrock's injury resulted from a 'motor vehicle accident' within the policy's terms, and affirm the judgment."
In this case, four of the nine Judges disagreed with the ruling. This fact serves as a reminder why an experienced Insurance Law Attorney needs to be consulted on these insurance claims.
People with auto coverage in Weatherford, Mineral Wells, Aledo, Millsap, Azle, Springtown, Brock, Willow Park, and other places in Parker County might think they have Personal Injury Protection (PIP) benefits, when they actually do not.
The Austin Court of Appeals issued an opinion in 2003, that can be a little confusing. The style of the case is, Kathryn Payne and Carnell Gulley v. Mid-Century Insurance Company of Texas. Here is some background.
Payne and Gulley filed a lawsuit against Mid-Century alleging they were entitled to PIP benefits under the terms of an auto liability policy issued by Mid-Century. Both sides filed motions for summary judgment and the trial court ruled in favor of Mid-Century. On appeal, the trial court ruling was sustained.
Certain facts were agreed upon: The same insurance agent had written policies on the family since 1991. In 1994, Kathryn's mother purchased a policy naming Kathryn as the rated driver and signed an agreement deleting PIP coverage. Thereafter, Kathryn and her parents, Wanda and Rodger were named insureds in a Farmers policy. In 1996, Kathryn signed an agreement rejecting PIP coverage in connection with that policy. The waiver provided that the "rejection shall apply on this policy and all future renewals or replacements of this policy."
In 2001, the policy cancelled and the Mid-Century policy became effective and was the policy in effect at the time of the accident in issue here. Wanda Payne had signed a PIP rejection but Kathryn had not. The declarations page reflected no PIP coverage and no premiums were paid for the coverage.
Texas Insurance Code, Section 1952.152, states that PIP coverage in automatically in every policy issued in Texas unless it is rejected in writing.
Mid-Century lawyers alleged two reasons for denying coverage: (1) the Mid-Century policy was a renewal of the earlier policy by an affiliated company, Farmers, therefore Kathryn Payne's 1996 waiver of coverage in connection with the Farmers policy applied to the Mid-Century policy, and (2) Wanda Payne's 2001 waiver of PIP coverage was effective as to the Mid-Century policy because she was both an "insured under the policy" and Kathryn Payne's agent authorized to waive coverage on her behalf.
Payne on the other hand, says the written rejection by Kathryn signed in 1996 was ineffective as to the Mid-Century policy for two reasons. First, although the Mid-Century policy might be considered a replacement of the Farmers policy, it could not be a renewal because the earlier policy insured three persons, Kathryn and her parents, while the Mid-Century policy covered only Kathryn. Further, Kathryn's written rejection agreeing that it applied to replacement policies was of no effect because the statute only provided that such a written rejection applied to a renewal policy.
The court in making it's ruling stated that by using the term "renewal policy" in the statute, the legislature intended the term to include a new contract between parties that replaces a preceding policy without a lapse of coverage. In discussing further, the
Court stated there is no authority for an assertion that a renewal policy must have identical parties and terms as the earlier policy.
In it's closing statement the court said, "We hold that under these facts, the Mid-Century policy was a renewal policy. Thus, Mid-Century was not required to provide PIP in its policy because Kathryn rejected the coverage in writing in connection with the issuance of the Farmer's policy, and a policy previously issued to her by an affiliated insurer."
There is a lot of case law dealing with the PIP statutes and there have been some revisions and new interpretations of these laws. An experienced Insurance Law Attorney would be up to date on these laws and the changes in the laws. He would be able to give proper advice for most disputes arising under these laws.
People in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Millsap, Willow Park, Hudson Oaks, Brock, Cool, and other places in Parker County need to be aware of the Personal Injury Protection (PIP) benefits in their auto policy.
Most people have have these benefits do not even know how they work. All they know is that when they talked with their insurance agent they told the agent they wanted "full coverage" and as a result of that directive they ended up with PIP. It is a good coverage to have and there are laws regulating this coverage in the Texas Insurance Code.
These PIP laws are found in Sections 1952.151 thru 1952.161.
In Florida, there is an attempt underway to regulate PIP in such a way as to hopefully reduce fraud and as a result to hopefully reduce premiums for this coverage.
The Miami Herald ran a story on April 1, 2012, titled "Time Will Tell If New Law Fixes Rampant Car Insurance Fraud." The story is authored by Tia Mitchell and deals specifically with PIP.
The Florida division of Insurance Fraud reports people committing fraud in staging accidents and collecting thousands of dollars in insurance money. In response to this fraud the story tells us that the Florida legislature has passed a law that is intended to reduce this fraud and reduce insurance rates. The relevance of this Florida law to Texans is that if the law proves to be effective in Florida, it is likely something that will eventually be passed and enacted in Texas also.
The measure includes a requirement that insurance companies reduce PIP premiums at least 10% by Oct. 1 and 25% by 2014.
One of the stated goals of this legislation is to put PIP back into its original character as emergency treatment to get a person back on their feet. As part of that effort, the new law bars massage therapists and acupuncturists from treating patients under PIP. Those services have been contributing to rising costs, and are deemed less necessary than other treatments.
Beginning in 2013, people injured in auto accidents will have 14 days to seek initial treatment - under current law there is no cutoff - and that first visit will carry more weight.
Only people diagnosed with an "emergency medical condition" will be eligible for the full $10,000 PIP benefit. Medical doctors, osteopathic physicians, dentists, physician assistants or advanced registered nurse practitioners will be authorized to make the determination.
Those with less severe injuries will receive only $2,500. Soft tissue injuries that are common in car accidents, such as soreness, swelling and bruising, are not expected to be considered emergencies.
Supporters of this new law say that this is how the system is supposed to work because PIP was intended to help people only with their immediate needs after an accident. Letting other types of insurance such as the at fault drivers liability coverage or private health policies take care of the rest, is the goal.
Another change in current law is clearing up ongoing disputes about how costs should be calculated by factoring in the fee schedule under Medicare. It also clarifies that insurance companies can examine patients under oath when investigating possible fraud, and eliminates a provision that allowed Judges to drastically increase the amount of fees awarded to the attorneys of injured people.
It is worth noting that this Medicare fee schedule fix was tried in 2007 and resulted in a drastic increase in disputes that ended up in court.
The Florida Justice Association, which represents trial lawyers, says there is no question but that the number of PIP lawsuits will increase. This is because the "emergency medical condition" definition will be an issue. Two examples of this are (1) is it going to be up to a court to determine whether a certain kind of sprain is an EMC, or (2) a bulged disc in the spine is an EMC.
Texas has often followed Florida in tort reform laws. That is essentially what this law is. So, that means this law may very well be coming to Texas in its next legislative session.
People with auto insurance policies in Grand Prairie, Arlington, Fort Worth, Dallas, Hurst, Euless, Bedford, and other places through out the DFW metroplex usually do not have a very good understanding of how their auto insurance policies work. All they know is that if they get into a wreck the insurance is suppose to help them.
There are many things an auto insurance policy can provide. The vast majority of people get the bare minimum that is required by state law. But there are many things that can be purchased. The minimum is liability coverage. Beyond liability coverage, a person can purchase coverage for damages to their vehicle, towing, auto rental, life insurance, medical payments, personal injury protection, uninsured and underinsured coverage, and a few other types of coverage.
All of these coverages work a little different from each other. Personal Injury Protection (PIP), and Uninsured / Underinsured (UM) coverage is required coverage on any auto policy sold in the State of Texas, unless these coverages are rejected in writing.
The requirement for PIP coverage is found in the Texas Insurance Code, Section 1952.152. The requirement for UM coverage is found in the Texas Insurance Code, Section 1952.101.
One aspect of these coverages was discussed in a 2004, Texas Supreme Court case styled, Old American County Mutual Fire Insurance Company v. Zeferino Sanchez. The question in this case was whether the insured spouse of the person listed as the "named insured" in the declarations page of a policy may reject those coverages. The case got to the Supreme Court as the result of a summary judgment ruling. This Supreme Court ruled that the spouse falls within the class of persons statutorily entitled to reject UM and PIP coverages under the policy.
Here is the factual background:
This case was presented on stipulated facts. On January 8, 1998, Margarita Sanchez, wife of Zeferino Sanchez, applied for and purchased an insurance policy from Old American for two of the couple's vehicles. Ms. Sanchez rejected UM and PIP coverages on the insurance application, and Old American never assessed premiums for the coverages. In applying for the policy, Ms. Sanchez affirmed that the rejections of UM and PIP coverages would apply to the 1998 policy and to all future renewals of that policy. The Sanchezes renewed their existing policy in 1999. Neither Mr. or Mrs. Sanchez requested PIP or UM coverages at that time.
Although Ms. Sanchez's name appeared on the 1998 policy application, she was not listed as a "named insured" on the declarations page. The policy, however, defined "you" and "your" to include the "named insured" as well as "the spouse if a resident of the same household." Mr. Sanchez fell within the policy definitions of "you" and "your" because she and Mr. Sanchez lived in the same house at all pertinent times. To that end, the parties stipulated that both Mr. and Mrs. Sanchez were insured under the policy. The parties disagreed, however, about the extent of the policy's coverage. Specifically, the parties disputed whether Mr. Sanchez was entitled to UM and PIP benefits to cover damages arising from a 1999 accident.
On April 11, 1999, Mr. Sanchez's pickup was parked on the shoulder of the road. A vehicle driven by an uninsured motorist struck Mr. Sanchez's truck as he was lying beneath it repairing a broken fuel hose. The impact caused the pickup to collapse on Mr. Sanchez and sever his spinal cord. The policy's UM and PIP provisions excluded coverage for injuries sustained while "occupying" or when "struck by" any vehicle owned by an insured that was not insured under the policy.
After the accident, Mr. Sanchez filed a claim with Old American for UM and PIP benefits under the policy. Old American filed suit seeking a declaratory judgment absolving it of any obligation to pay those benefits.
This court got into a multi page discussion about the purpose of the UM and PIP statutes and the wording of those statutes and then compared that discussion to the wording of the Old American policy.
The Texas Supreme Court ultimately held that the phrase "insured named in the policy" was synonymous with "named insured" in the UM and PIP statutes. In so holding it was ruled that Ms. Sanchez's signed reject of UM and PIP coverages, also excluded those coverages for Mr. Sanchez.
A natural question for someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Millsap, Brock, or anywhere else in Parker County to ask is; What is the value of my claim?
When the claim is a personal injury claim, there is no easy answer. One general principle in this regard is that there are laws against making a "double recovery." A double recovery would be where you collect money from more than one source for an injury. The most likely place for this to be seen is where a person is injured in an auto accident caused by another. The injured person goes to the hospital and pays for the hospital bills with their personal health insurance. Then later on, the injured person makes a claim against the person who caused the accident and injuries and the insurance company for that person pays the injured person again, for the same hospital bills. Technically, this is illegal.
Another example is where the injured person makes a claim against two other people who may be responsible for the injuries and both pay all the bills.
In the second example above the Texas Civil Practices & Remedies Code, Section 33.012(b) says, "If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by the sum of the dollar amounts of all settlements."
What Section 33.012(b) means is that if a person has a claim that is worth $1,000, then he cannot collect $1,000 from both people he is making the claim against. So, if one pays $100, then he still has a claim against the other for $900.
In the first example above, where the injured person has had the hospital bills paid by his insurance company, then the hospital has a subrogation interest in any amounts the injured person receives from the person who caused the injuries. The amount of the subrogation amount would be an amount up to what his health insurance has paid. So, if the injured person has a claim worth $1,000 but only $500 is paid by the health insurance company and if the injured person collects $1,000 from the person who caused the injury, then $500 has to be paid back to the health insurance company and the injured person can do as they wish with the other $500.
An experienced Insurance Law Attorney knows how to use other laws and legal principles to increase the total amount of the recovery and or lessen the amount of money that has to be paid back as a subrogation interest. - One thing to know, is it can be very confusing.
One place where a double recovery is allowed and fully legal is in auto injury claims where the injured person has Personal Injury Protection (PIP) benefits. The Texas Insurance Code, Section 1952.155(a) and (b).
Section 1952.155(a) says, "The benefits under coverage required by this subchapter are payable without regard to: (2) any collateral source of medical, hospital, or wage continuation benefits." This means that the injured person can collect his PIP benefits and then still make a claim against some other personal insurance he has for the same losses such as medical bills or lost wages. The caveat here is that there are exceptions to this and is again, a situation where an experienced Insurance Law Attorney needs to be involved to stay out of trouble.
Section 1952.155(b) says, "Except as provided by Subsection (c), an insurer paying benefits under coverage required by this subchapter does not have a right of subrogation or claim against any other person or insurer to recover any benefits by reason of the alleged fault of the other person in causing or contributing to the accident." This means that the PIP insurance company cannot subrogate against the insurance company of the person who caused the injuries. There is only one exception to this statute which is in Subsection (c), and this writer does not know where it has ever come into play.
The lesson to be taken from this posting is that the value of a claim has to take into account the rules discussed above.
Grand Prairie residents and residents of Arlington, Mansfield, Burleson, Crowley, Benbrook, Fort Worth, Lake Worth, Hulen, and other areas of Tarrant County who have automobile insurance coverage are always given the opportunity to purchase, with their automobile insurance, Personal Injury Protection, otherwise know as PIP.
PIP coverage is required to be offered along with automobile insurance coverage pursuant to the Texas Insurance Code, Section 1952.152. Here is a case dealing with that coverage.
The style of the case is, Texas Farmers Insurance Company v. Carabell Fruge. This is a case decided by the Texas Court of Appeals, Beaumont, in 2000. Here is some background information.
Jackie Ryan had purchased an automobile liability insurance policy from Farmers that provided her with $2,500 in PIP coverage. Fruge was a passenger in Ryan's vehicle and was injured in a car wreck. After her injury, Fruge's attorney filed on her behalf a PIP claim with Farmers supported by documents reflecting medical expenses of $3,490. Some of the supporting documents contained some reference to Medicare. At least one document was stamped "Benefits Assigned." Farmers responded to Fruge's claim by mailing her six checks totaling $2,500.30. Four of the checks, totaling $1,854.30, named medical providers, Medicare, or both as co-payees with Fruge. All six checks named the law firm representing Fruge as a co-payee. Fruge's attorney returned all six checks with a letter advising Farmers that "some or all" of the medical bills related to the checks naming co-payees had been paid, complaining that it would take six months to get all of the necessary endorsements, and demanding payment naming Fruge as the sole payee.
As the court stated, this case raises questions related to PIP coverage provided in the Farmers contract of insurance. The issue is whether Farmers breached its contract by placing the names of medical providers and Medicare as co-payees on checks paying PIP benefits to Fruge. This court held that Farmers did breach its contract as it relates to all except naming Medicare as a co-payee.
Fruge's attorney brought an action pursuant to Section 1952.157 against Farmers to recover $2,500 in benefits, as well as penalty and attorneys fees as provided. The trial court ruled against Farmers and this appeal followed.
This court rejected Farmers assertion that it was obligated to honor assignments to Fruge's medical providers because according to the terms of the policy the stamped notations "Benefits Assigned" was not an assignment. According to the terms of its policy, Farmers would honor assignments for medical expenses if it received a written assignment signed by the covered person to whom such benefits were payable. As such, Fruge was right to expect that PIP benefits would be made payable to her alone.
But as the court said, naming Medicare as a co-payee is another matter. Federal law provides that any portion of medical costs by Medicare for which private insurance is the primary payer is conditioned upon reimbursement from the insurer. This is per 42 U.S.C. Section 1395y(2)(B)(i). Medicare is a secondary payer for services covered under no-fault insurance per 42 U.S.C. Section 1395y(2)(A)(B)(ii). And "no-fault" insurance includes PIP coverage per 42 C.F.R. Section 411.50(b). This is an instance where federal law preempts state law. State law can be preempted by federal rules as well as federal statutes. To avoid the risk of making the same payment twice, Farmers may have been correct in not making an unconditional payment to Fruge reimbursing her for expense it should have known had already been paid by Medicare.
The court went on to rule that while Farmers is correct in its assertion that federal statutes and rules preempted state law, it cannot, on the fact of the record, claim that it had reason to suspect that Medicare was entitled to the sum represented by the checks that named Medicare as co-payee. Though the record speaks of six checks and Farmers appears to have named Medicare as payee on checks totaling $1,352, the record only showed a Medicare payment of $168.56. Thus it appeared that Farmers wrongfully named Medicare as a co-payee to part of the PIP benefits.
The judgment was ordered to be reformed to reflect this opinion.
Even on something that should be as simple as PIP payments, a person should seek the advise and counsel of an experienced Insurance Law Attorney to insure their rights are not being abused by the insurance company.
Lots of insureds in Weatherford, Aledo, Willow Park, Mineral Wells, Millsap, Brock, Azle, Peaster, Cool, Hudson Oaks, and other places in Parker County will have Personal Injury Protection benefits included in their auto insurance policies.
Here is an article that discusses an antic one company was using to save money on these PIP claims.
The article was published by the Houston Chronicle on May 13, 2011, and is authored by staff writer, Patrick Danner. The title of the article is, USAA Sued Anew Over Medical Payouts In Crashes Plaintiffs Say Insurer's Reviews Are "Shams"; Firm Defends Practices.
The article tells us that USAA is again defending itself against charges it utilizes a "cost containment program" to improperly reduce or deny medical payouts to insurance customers injured in auto accidents.
In Texas, payments are governed by the Texas Insurance Code, Sections 1952.151 thru 1952.161.
The article goes on saying that the latest claims against the San Antonio financial and insurance company were made in a federal lawsuit filed this week in Oregon.
The lawsuit, which seeks national class-action certification, charges that USAA uses an outside auditor to assess claims and to "uniformly conclude that medical treatment was not needed." In other words, USAA is accusing its insureds of fraud.
USAA denies the allegations.
USAA has previously settled two class-action lawsuits that have accused it of using flawed data to arbitrarily deny a portion of the medical benefits for injured customers who have PIP or other medical payments coverage on their USAA auto insurance policies.
One of those cases, filed in Arizona, was settled last summer. Claims are still being processed, so the amount to be paid out under the settlement hasn't been determined.
The other case, filed in Illinois was settled in 2005. Lawyers for the plaintiffs valued the settlement on their website at $35 million, a figure USAA spokesman Paul Berry called "probably wildly" inflated.
USAA settled the two cases because it was the "right thing to do for our membership," Berry said. He noted both courts endorsed USAA's bill review practices.
"We pay all reasonable, necessary, and accident related bills," Berry said. "That doesn't mean we pay all bills. If you had injuries or you received some treatment that had nothing to do with an auto accident, we're not going to pay those bills."
USAA relies on Alabama based Auto Injury Solutions to help review medical bills to determine whether they are reasonable and necessary and to weed out duplicative and fraudulent claims. Bills deemed suspicious are reviewed by a doctor or other health care professional, Berry said. Even when one of its doctors concludes the medical care wasn't necessary, the bill still goes through several other reviews, he said.
USAA also can choose to override any instance where a bill is rejected, Berry said.
In the latest Oregon lawsuit, four unrelated USAA customers in separate accidents allege the medical reviews were a "sham."
It is the agent selling the policy that can often times be a problem when there is a need to make a PIP claim. Talking to an experienced Insurance Law Attorney is one way of insuring that you get what you have paid for when the need for a PIP claim arises.
Drivers in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Decatur, Peaster, Millsap, Brock, Hudson Oaks, Poolville, Newark, Willow Park, and other parts of Texas are all offered Personal Injury Protection (PIP) benefits coverage when they buy coverage for their automobile. It is the law.
It is the law that the coverage be offered. However, it can be rejected. To reject it, the rejection must be clearly made and in writing. This law is found in the Texas Insurance Code, Section 1952.152(b).
Here is a 1978 case by the Texas Supreme Court dealing with the rejection. The style of the case is, Unigard Security Insurance Company v. Charles Schaefer et al. Here is some background.
Schaefer and others sued to recover under the PIP endorsement of an auto policy issued by Unigard. The case was tried on stipulated facts. The trial court ruled for Unigard. The first appeals court reversed the trial court and then this Supreme Court upheld the first appeals court decision. All the people sueing for benefits in this case were killed or seriously injured in an accident where a David Wyloge was the driver of the car in which everyone was riding.
Prior to the accident, Abraham Wyloge obtained liability insurance coverage from Unigard. The policy included an Endorsement 243, which was PIP, mandated by the Legislature in the then existing Insurance statutes. That statute is the predecessor of the current 1952.151 thru 1952.161.
Under that law the only exclusion of benefits provided in the statute was injury caused to oneself intentionally or while in the commission of a felony or attempting to elude arrest. Mr. Wyloge did not reject the PIP coverage. On the contrary the policy was written with coverage included in Endorsement 243, and Unigard collected a premium for it.
On a subsequent date, Mr. Wyloge signed a Form 119. "Exclusion of Named Driver" endorsement. It excludes claims arising from any accidents occurring while any automobile is operated by David Wyloge. Unigard asserted that the exclusion in Endorsement 119 was tantamount to a partial rejection, while David was driving, of the PIP coverage. This is the reason Unigard denied the claim.
In this case, there was much arguement over the difference between an endorsement and an exclusion and the effect of signing the Form 119 exclusion and the Endorsement 243.
In making it's decision the court stated as follows:
"This holding is consistent with that part of (old statute) which sets forth the only exclusion of benefits authorized by the statute. They are: when the insured causes injury to himself intentionally or is injured while in the commission of a felony or attempting to elude arrest. Any attempt to add another exclusion applicable when the automobile is being operated by an unauthorized driver would be repugnant to the statute. When specific exclusions or exceptions to a statute are stated by the Legislature, the intent is usually clear that no others shall apply. When the Legislature specifies a particular extent of insurance coverage, any attempt to void or narrow such coverage is improper and ineffective."
"Even if Endorsement 119 were not inapplicable because of the terms of (old statute) and Endorsement 243, we do not agree with Unigard that 119 was sufficient as a partial rejection of the statutory (PIP). As heretofore indicated, there is not a word in that endorsement which mentions (PIP, the old statute) or Endorsement 243. A matter of public policy involving more than the present litigants is here involved. The Legislature has declared it to be the public policy of this State that 'no automobile liability insurance policy ... shall be delivered or issued for delivery ... unless personal injury protection coverage is provided therein or supplemental thereto.' Among the purposes are to provide injured occupants of the insured automobile with up to $2,500 per person for hospital and doctor bills arising from accidents 'without regard to fault or nonfault of the named insured or recipient ...'"
This is an old case upholding the current law stating that rejection of PIP benefits must be clear and in writing. There are a lot of cases dealing with PIP benefits and whenever someone finds themselves in a position where those benefits are being denied, they should seek the advice of an experienced Insurance Law Attorney.