Vegas Personal Injury Law Blog

Recently, I received a telephone call from a woman who was involved in an accident in her boyfriend’s garage. Her boyfriend had recently purchased a new home.  The girlfriend lived with the boyfriend about 75% of the time.  While the boyfriend was hospitalized, the girlfriend went into the garage to put some kitchen appliances in a cabinet that was hung on the wall.  As she was doing so the cabinet fell and landed on her foot causing an injury requiring surgery.

Although the girlfriend  had health insurance, her personal responsibility on her medical bills is in excess of $50,000.00, and her treatment is ongoing; and, she is still experiencing persistent pain and will require future medical treatment.   An inspection made after the girlfriend’s  accident showed that the cabinets were improperly secured to the wall.  The couple that sold the house to the boyfriend are elderly and now reside in a remote state.
The initial question that had to be answered was whether the boyfriend’s homeowners policy would provide any coverage for the girlfriend? There are two types of coverage on a homeowners policy that could possibly provide coverage for the girlfriend.  These two types of coverage are premises med pay and liability coverage. Premises med pay coverage (usually between $1,000.00 and $10,000.00 on a homeowner’s policy) will pay for the medical bills of a visitor that is injured while on your property, regardless of fault.  However, this coverage excludes resident relatives and non-relatives who live at the residence on a regular basis. Therefore, the girlfriend was not eligible for premises med pay coverage.

Liability homeowner’s coverage provides recovery for persons who are injured on your property. This coverage is fault-based.  So, for this coverage to apply the owner must be negligent in causing an accident.  Since the boyfriend did not hang the cabinets and did not know about  the defect that caused the cabinet to fall, liability coverage from the boyfriend’s policy was not available to the girlfriend for her accident on the boyfriend’s homeowner’s policy.

The second question that had to be answered was whether or not the sellers’ homeowner’s policy would provide liability coverage for the girlfriend?

Virtually all homeowner’s coverages and automobile coverages are “occurrence policies.”  With this type of coverage, the occurrence (negligent act and accident) must occur within the policy coverage period or term of the policy.  The girlfriend’s accident occurred the after the house was sold. The seller’s homeowners policy was not in effect at the time of the occurrence and the girlfriend’s accident  did not happen  within the coverage term.  So, the sellers’ homeowner’s carrier will deny liability coverage for the girlfriend’s accident.

If the same negligent act occurred within the coverage period, lets say during the walk-through, prior to the closing of the sale, then the negligent act and the girlfriend’s accident would have occurred within the coverage term or period, and there would have been liability coverage from the seller’s policy for the girlfriend’s loss.

With an occurrence policy, if the occurrence happens within the coverage period, and the policy then terminates, even if the a claim or lawsuit is made years later, the occurrence policy provides coverage.  For example, if you are in an injury producing  automobile accident today and you don’t like the way that your carrier is handling the accident, and you cancel your policy tomorrow, and the injured party sues you one year later, you will still have liability coverage for this accident. Your liability coverage will cover the costs of your legal defense and damages up to the limits of your liability coverage.

Therefore, occurrence coverage will cover incidents arising during the coverage period, regardless of when those claims are reported, so long as they are made within the applicable statute of limitations, which can range from one year to three years for  negligence, depending on which state the accident occurs.

So occurrence coverage has a tail coverage period which makes it more expensive than “claims-made” coverage which has no tail.  For that reason, claims-made coverage is cheaper than occurrence coverage.  We see claims-made policies on professional liability coverage, such as malpractice policies or business liability policies.  Claims-made policies cover incidents arising during the policy period which are also reported during the term of the policy.  You can purchase an endorsement on a claims-made policy that responds to incidents which occurred before the policy start date (also known as retroactive date).  You can also purchase a tail coverage on a claims-made policy which covers incidents that occur during the policy term, that have not been reported to your carrier during the policy term. So, if there are no prior acts or retroactive endorsements or tail endorsements on a claims-made policy, it will be  cheaper than occurrence coverage.

For example, many hospitals will purchase claims-made coverage for their doctors malpractice insurance.  On a claims-made basis, if the doctor leaves the hospital to enter private practice,  he should purchase tail coverage to cover occurrences that happened while he was working for the hospital that are reported after his employment with the hospital ends.

Getting back to the girlfriend’s accident, her only remedy is to file suit against the uninsured elderly sellers who reside out of state. If she could  afford to pay an attorney to obtain  a judgment against the sellers, she may never be able to collect on it.  So, before a suit is filed against the sellers, an asset check should be done to determine if the sellers are candidates for filing bankruptcy to avoid the judgement.  Remember, the sellers can liquidate all their assets and use them pay down their mortgage.  If the seller’s state has homestead laws; or, if the sellers file for bankruptcy, the girlfriend may not be able to execute on any judgment against the sellers.

Recently, I have had a number clients who have been involved in auto accidents where they have been partially at fault for an accident and have not been treated fairly by their own insurance company.

NRS 687B.385 states: “An insurer shall not cancel, refuse to renew, or increase the premium for renewal of a policy of motor vehicle insurance covering private passenger cars of commercial vehicles as a result of any claims made under the policy with respect to which the insured was not at fault.”

What is an “at-fault accident”?

This statute was interpreted by the Nevada Supreme Court in the case of State Division of Ins. vs. State Farm Mut. Auto. Ins. Co., 116 Nev. 290, 995 P.2d 482(2000).  This case interpreted NRS NRS 687B.385 to include accidents in which the insured was 50% at fault or less.  This case put NRS 687B.385 in conformance with NRS 41.141, Nevada’s comparative negligence statute.  This decision means that an insured is at fault for an accident when his liability for a two-vehicle  accident is exactly 50/50, even though he can still recover 50% of his damages from the other driver under NRS 41.141.

Therefore, an assessment of 50% liability (or more) by your insurance company for an accident as an at-fault accident and  will probably result in an increase in your auto insurance rates.  If you are involved in another at-fault accident, your policy will probably be cancelled. Let me give you a real life example.

A vehicle making a lefthand turn going southbound to eastbound at an intersection enters a very wide lane, and stays to the left hand side of that lane.  Another vehicle, at about the same time, traveling northbound makes a right hand turn and enters the same lane but stays to the right hand side of the same lane.  The driver of the vehicle on the right then comes face to face with roadway signs indicating that the roadway lane is narrowing and she must merge to the left.  She does so and collides with the other vehicle traveling on the left hand side of the lane.

Both drivers are insured by the same insurance company. The vehicle on the right was forced to merge left because the lane narrowed into a single lane width. Roadside hazard/warning signs forced the driver on the right to merge to her left. The vehicle on the left was already on the left side of the roadway and did not have to change it’s position within the lane to enter the narrowed portion of the lane.

Anyone reading this fact pattern would automatically assume that the driver on the right hand side of the travel lane is more at fault for this accident than the driver on the left.  However, the insurance carrier, who was the same company for both parties, determined liability at 50/50 and assessed both drivers with an at-fault accident and raised both drivers’ insurance rates.

The insurance company’s assessment of 50/50 liability for this accident is unrealistic because:

1. The driver on the left had no duty to anticipate the fact that the  driver on the right was going to swerve into her vehicle;
2. If the vehicle on the right did use her left hand turn signal, the vehicle on the left, could not see it because the vehicle on the right was not in front of her vehicle; and
3. The accident occurred eighty-six (86) feet east of the intersection where both vehicles entered the same roadway.

According to Nevada case law the adverse effect of a 50/50 assessment of liability will result in the increase of both drivers’ insurance rates for an at-fault accident.  In the event that there was  an assessment of 51/49 liability in favor of the driver on the left and against the driver on the right, the insurance company could not raise the rates for the driver on the left for an at fault accident.

Obviously, there is no exact science to assessment liability for any accident, however based on the facts and circumstances of this accident, a 50/50 liability assessment is completely unrealistic.

So, why did the insurance company raise the rates of both drivers? The only reason is for an economic benefit. Raising the rates of both drivers results in the insurance company recouping its losses for this accident more quickly from the increased insurance premiums from both drivers, as compared to raising the rates for only one driver. And, the insurance company only has to pay 50% of each party’s property damage, thus forcing the insured drivers to pay their own collision deductibles in order to have their vehicles repaired.

After the insurance company was asked to review the facts and circumstances surrounding this accident and to change it’s liability decision by one percent in favor of the vehicle on the left, they refused.

Now, if in the future, liability can be determined by a trier of fact in favor of the vehicle on the left, will the insurance company return the driver on the left’s increased premiums and collision deductible?  Did the insurance company act in bad faith concerning their liability apportionment decision?

Therefore, if you are in an at-fault accident where your insurance company assesses liability against you at 50/50 (or more), you will be assessed with an at fault accident. You should also  be aware of the adverse consequences of increased rates and cancellation of your policy.  You should also consult an attorney for legal advice concerning the insurance company’s decision.

If you or your children are involved with a fender bender accident where you are at fault, or partially at-fault, and  nobody is hurt, and law enforcement isn’t involved;  you should consider working out the property damage with the other driver to avoid increased insurance rates and/or cancellation of your policy.

Over the past few years the media has been reporting on an alleged conspiracy in our medical legal community involving prominent attorneys, judges, a medical consultant, and doctors.  This scandal has been labeled “Las Vegas’ Medical Mafia”.

It began with a motor vehicle accident where the adverse driver was a federal prosecutor.  Obviously, there are two sides to every story.  The media has concentrated on the medical-legal unethical conduct.  There has been little coverage concerning the interaction between the prosecutors and the auto insurance companies.  Ironically, to date, nobody has actually been convicted.  Some doctors have been given immunity, and one doctor is about to enter a plea bargain with the prosecution.  The details of this proposed plea bargain have recently been made public.

The end result of all this has been detrimental to the already tarnished image of attorneys handling personal injury cases.  Why do these things happen?

Insurance companies on one hand are very concerned with fraud which costs them billions of dollars annually.  They don’t like big verdicts, even though they have almost unlimited resources to defend these cases.  So the insurance industry is motivated to protect their financial interests by setting examples of attorneys, doctors, and consultants who are involved in large verdicts.

On the other hand, zealous representation of personal injury victims sometimes involves going to the absolute limits of what is permitted by the rules of professional conduct.  The closer that an attorney gets to the line, the greater the chance of crossing it.  The more often a medical-legal professional goes to the line, the more blurred the ethical boundary line becomes.

The zealous defense of personal injury claims also involves some danger of crossing ethical boundary lines.  Attorneys for both sides experience anxiety when deciding over how far they can go in the representation and defense of their clients.  Both sides are motivated by ego and financial gain.  In order to win a personal injury case, there must be cooperation between the attorney and his medical witnesses.  How far can this cooperation go before it is labeled collusion?  All this is a part of the war that goes on between accident victims, insurance companies, personal injury attorneys and defense attorneys.

So what do we come away with from all of this?

The bottom-line is that there are many victims of auto accidents that are never fully compensated.  Many victims, years after they have settled their auto accident claim, will need spinal surgery.  There are others perhaps that are overcompensated.  The more medical-legal pressure that is applied in a personal injury case, the greater the risk that one side will cross the line between ethical and non-ethical conduct.

So, both sides of the medical-legal war need to step back and take a good look at what they are doing to bolster their position.  Be cognizant of the ethical limits of zealous representation.  If you believe that the other side is crossing the line, that doesn’t necessarily mean that you also need to cross the line to protect your client’s interests.

We should all be concerned about the damage that the “Las Vegas’ Medical Mafia” cases have done to the reputations of our medical-legal community.  It’s up to us to repair this damage by making sure that our future conduct does not involve any risk of unethical behavior to achieve quality representation of our personal injury clients.  If the “Las Vegas’ Medical Mafia” media coverage has taught us anything, it has more clearly defined the line between professional and non-professional conduct, and has given us some examples of what we should not get involved in while representing our personal injury clients.

The automobile insurance industry in the year 2009 has been negatively affected by our sour economy. The insurance industry warns that, by the end of this year, one out of six drivers will not be covered with automobile liability insurance. As a result of current rising unemployment rates, there has been a stunning rise in the number of drivers who are cutting back, or even dropping their automobile insurance coverage altogether, to save money. Therefore, we are looking at record numbers of uninsured motorist on our roadways across the nation.

Auto liability coverage is required in all states with the exceptions of New Hampshire and Wisconsin. In the past, the percentage of drivers without insurance coverage fell steadily until two years ago when the uninsured rate was 13.8%. But, starting in December of 2007, the uninsured rate spiked to 14.6%. The forecast is that the uninsured rate will be 16.1%, by the end of this year. This equates to 33 million licensed drivers across the country without any automobile insurance coverage, based on figures compiled by the Federal Highway Administration.

This phenomenon of increasing uninsured motorists is directly attributable to our challenging economy. An increase in unemployment of 1% results in an increase in uninsured motorists rate of more than three quarters of a percentage point. Many drivers who are unemployed cannot afford to maintain the minimum liability coverage required by state law. Food and rent become the primary financial concerns for these individuals. The average cost of an auto insurance policy was $72.25 per month ($867.00 annual premium) in 2007.

Uninsured motorists can face legal fees, fines, and penalties such as a suspension of their driver’s license. If they injure someone in a liability accident, they may be forced to file for bankruptcy. When economic pressures are high, uninsured motorists appear to be willing to accept these risks.

Obviously, it’s a bad idea to cut back on your auto insurance coverage during an economic recession. In fact, during economic recession, it is logical to increase your uninsured motorist and underinsurance coverages to protect yourself and others you care about. See my earlier post on UM/UIM Coverage.

The global financial crisis has negatively affected auto insurance companies. The reduced demand for auto insurance during the current financial crisis will result a very turbulent 2009 for the auto insurance industry. They may be required to raise their rates.

Grim economic times usually result in increased claims. People who would never think of filing an insurance claim, are more inclined to do so when they need money.

The current economic crisis has affected the demand for insurance. The reduced demand for auto insurance, results in diminished income to insurance companies. On the investment side, insurers have taken a massive hit. They are receiving much less income on their investments, because they are tied into th e stock market.

One way the insurance industry is reacting to the current recession is by denying more claims. They are also utilizing delay tactics on the settlement of auto accident claims. The more that they delay the more income they can earn in their reserves. They are settling claims for as little as they can. They must cut down the costs associated with litigating auto accident cases. You will see more auto insurance carriers utilizing in-house counsel rather than private counsel to handle auto accident cases to reduce their costs.

Considering all this, it is currently more difficult for your attorney to settle your personal injury accident case for fair and reasonable compensation. I have filed more lawsuits in the last two months on car accident personal injury claims than I ever have in the past. So, don’t blame your attorney, if your case doesn’t settle. Current economics may be directly affecting the settlement of your Personal injury claim.

Some information for this post came from an MSNBC report.