California — Commissioner & the FAIR Decision Controversy
Marlene Garnes won a legal victory against California FAIR Plan Association (FAIR) when the California Court of Appeal, First District overturned a decision by a lower court and ordered the insurer to pay the cost to repair Garnes' Richmond-area home, which was damaged in a fire in 2011.
California Insurance Commissioner Dave Jones said, “The Court's decision prevents FAIR from forcing residents in lower income and other economically challenged neighborhoods to move or live in a damaged home instead of repairing it after a fire.”
In October 2011, Garnes submitted a claim for $320,549 for the cost to repair her damaged home, less depreciation. Her FAIR fire insurance policy had a limit of $425,000, but the insurer denied her claim. In the end, the insurer only paid $75,000 and said that was the fair market value of her property in 2011.
When the parties were unable to agree on the claim payment, FAIR sued Garnes.
Jones filed an amicus brief in support of Marlene Garnes. He pointed out the Insurance Code entitled her to be reimbursed for the cost of repairing her home even if that exceeded the fair market value. The court relied on Commissioner Jones' interpretation of the Insurance Code and ruled in favor of Garnes.
A statement from the FAIR Plan noted that the property was grossly overinsured.
“The property suffered a kitchen fire and, due to the age and condition of the property, the cost to repair the damage far exceeded the actual cash value (fair market value) of the property. The policy made clear that the most the FAIR Plan would pay if there was a partial or total loss was the fair market value of the property. Prior to purchasing the property Ms. Garnes was presented with a disclosure statement in 2006 giving her the various policy options available that the FAIR Plan wrote, including the option to purchase replacement cost coverage. Ms. Garnes chose an ACV policy,” the statement said.
The statement went on to say Garnes knew she was purchasing an ACV policy. It claims her broker decided how much to insure the property for and the FAIR Plan does not conduct property value appraisals when insuring property.
FAIR’s statement also added that the definition of “total loss” in the policy includes the concept of constructive total loss, which utilizes an economic test for the valuation of total loss where the repair costs exceed the property’s fair market value. That’s an approach that’s consistent with automobile and other policies that give insurers the right to pay the fair market value in the event of a total loss and the cost of repairs exceed its value, according to the FAIR Plan.
The statement also took aim at the statement issued by the California Department of Insurance.
“Last year, the Department of Insurance asked the FAIR Plan to change the definition of ‘total loss’ in its insurance policy form, and, working closely and cooperatively with the Department of Insurance, the FAIR Plan made that and other significant changes to its policy form. The new form will be used on all new and renewal policies starting July 1, 2017. The FAIR Plan is outraged that the Department of Insurance would issue a press release suggesting that the FAIR Plan discriminates against its inner-city customers.”
Source link: Insurance Journal, California Department of Insurance
California — Google Expands Carpool Service: Google wants more Californians to share rides to work. It is now collecting data to help people set up carpooling groups. This is being done through Google’s navigation and traffic monitoring app Waze.
It will have been testing carpool waters for the last year or so in various areas of the Golden State. The app is now ready to expand into much more heavily congested traffic areas like Los Angeles and other parts of Southern California.
When riders want to carpool, they notify Waze in advance and the app will try to match them with others wanting the same thing. Matches — at least at this point — are not guaranteed. And riders can only request two rides per day.
Drivers can only pick one carpooler a day and do get to profile the user before offering a ride.
Waze’s app will focus on rush hour commutes for now because the odds of successfully matching people is highest at that time.
Source link: Insurance Journal
Idaho — Insurance Department Op-Ed
Since the election, much has been said about what the Obamacare repeal and replacement may look like for Idahoans. Unfortunately, some of what has been said is incomplete, misleading, or inaccurate. I want to clarify some of the misconceptions. I and the Department of Insurance also want to be a resource to the questions you may encounter as our health insurance system is debated.
Perhaps the biggest misconception is that Idahoans can afford for Obamacare to remain unchanged. Every Idaho insurance carrier continues to lose millions of dollars in the individual health insurance market. These losses translate into higher premium increases for Idahoans, reduced availability, and narrower provider networks. The individual insurance market is not on a sustainable path.
This dilemma is not unique to Idaho. Across the country, insurance carriers are withdrawing from the individual marketplace. In 2017, 70% of the counties across America have two or fewer carriers and 33% of the counties only have one carrier. Already for 2018, some carriers have announced their withdrawal, potentially leaving citizens with limited choices
I have seen evidence that with the repeal and replacement of Obamacare insurance premiums will be significantly lower in Idaho on very good products and Idahoans will have more choices to buy plans that better fit them.
Another misconception is that pre-existing conditions will not be covered under the proposed Obamacare replacement. Recent media hype portrays newborns with health conditions as being uninsurable. This is blatantly misleading and ignores federal law, the proposed law, and Idaho state law.
Let me be clear: a newborn baby cannot be denied coverage under Idaho law as long as the child is enrolled on their parents’ plan within 60 days. Under current and proposed federal law a newborn child would be entitled to a special enrollment period. The proposed bill does not change the opportunity for the child to obtain health insurance, and a carrier could not deny or restrict that coverage, as long as the child is enrolled within 60 days from birth.
Further, even under proposed changes all plans would continue to be GUARANTEED ISSUE and GUARANTEED RENEWABLE, which means no one can be denied coverage.
The proposed modification to pre-existing conditions applies to consumers who have deliberately chosen to go without coverage until after they have a costly health condition. Like Obamacare, those individuals would be able to obtain coverage at the next open enrollment or special enrollment period; however, under the proposal would pay a higher premium for a limited time period based on their prior decision to forgo coverage.
No other type of insurance allows a consumer to go without coverage and then to enroll only after a costly event has occurred. You cannot buy homeowners insurance after your home is on fire.
If you are concerned about a pre-existing condition, the answer is to obtain and maintain continuous coverage. Continuous coverage guarantees no pre-existing condition exclusions apply under current federal and state law.
The Idaho Department of Insurance is happy to respond to your questions or concerns. We are anxious to dispel misconceptions, alleviate fears and help stabilize the marketplace. Please visit our website to fact check a rumor, ask a question, and read the answers to previously asked questions.
Although I know the road ahead may be bumpy, I am confident we will get through it. This is a critical decision and deserves to have accurate and complete information.
Washington — Department of Insurance
The Department of Insurance has added a Fixed-payment benefits plans annual report 2017 (PDF, 633.55 kB) to its website. You can find it by clicking here.
You can find all legislative and commissioner reports here.