Michael Dabbs, president of the Brain Injury Association of Michigan [BIAMI] announced on Monday July 13, 2009 that the BIAMI, insurance industry whistle blowers, medical providers and accident victims have come together to support proposed legislation that will create tougher penalties for insurance companies that deny policy holder’s legitimate medical claims.
"In cases of serious auto accidents – and particularly in cases of brain injury – time is of the essence in providing rehabilitative care," said Mike Dabbs, president of the Brain Injury Association of Michigan and spokesperson for CPAN. "Especially in the first year of recovery, every day lost fighting with insurance companies rather than receiving treatment renders the accident victim less able to fully regain the skills affected by their injury."
The proposed legislation is modeled after similar laws in 46 other states and consists of a 12-bill package including House Bills 4844, 4244, 4846, 5020 and House Bills 5144-5151.
"Policyholders faithfully pay premiums so that when they are injured, their insurance company will be there to help," said Dabbs. "Unfortunately, auto insurance companies all too often will delay, deny and defend claims rather than responding with the same good-faith toward their customers."
The timing of this package of bills couldn’t be better as our Michigan Appeals Court’s have recently issued some of the most anti-consumer rulings in recent memory. In particular – Johnson v. Wausau
The plaintiff in Johnson was a 16 year old girl named Nancy. When she was 10 month’s old, she suffered a catastrophic brainy injury in an auto accident. Her guardian/caretaker contacted Nancy’s father’s auto insurance company who was legally responsible for all of Nancy’s medical care and medical services.
Nancy’s caretaker was told that the only benefits she was entitled to was $20/day which represented "replacement services" under the No-Fault Statute. In saying this, the adjuster deliberately withheld information regarding "attendant care benefits" under the No-Fault statute. Attendant Care benefits under the No-Fault Statute requires auto insurors to pay caregivers a commercially reasonable hourly rate to provide medical assistance to people that provide medical assistance to the injured after discharge from the hospital.
For example, if someone is so brain injured that they cannot be left alone because their judgment is impaired, then the family has to hire someone to supervise the injured person. Typically this type of care – supervision, home exercise, getting dressed, cooking meals, monitoring medication – is provided by in-home nurses. But, in some cases, families don’t want a stranger in their house every day. Sometimes, families want to provide the care themselves. In that case, the law requires the auto insurance company to pay the family a commercially reasonable rate, i.e. the rate that they would have paid the in-home care company.
Unfortunately, the insuror in the Johnson case deliberately withheld this information from the family. In fact, they withheld this information for over 16 years. There were occasions when the family specifically asked Wausau if they were entitled to additional benefits beyond the $20/day and they were told "NO".
Essentially, the insurance company lied to the family to avoid paying money that they legally owed to the family of a 10 month girl who was severely brain injured in an auto accident.
When the family finally consulted with an attorney to confirm whether or not they were entitled to additional/mandatory medical benefits, they found out that they had been lied to for the last 16 years and sued Wausau claiming not only breach of contract but fraud.
Sounds like a slam dunk, right?
Not so fast. Enter the Michigan Court of Appeals. They decided that even though the family had been lied to, even though the insurance company deliberately withheld this critical information from the family, they weren’t entitled to any of the past benefits from the prior 16 years.
Why?
The Court’s opinion goes something like this –
1. We should all assume our insurance companies will lie to us.
2. When an insurance company lies to us, we do not have the right to bring a lawsuit against them for fraud because we should have known better and sought a second opinion from an attorney who knows what they’re doing.
3. If you take what your insurance company tells you at face value, if you believe it to be true [I mean, why would they lie to you? Aren’t they there to help?] if you rely on what the insurance company tells you, it’s your own damn fault if they hoodwink you.
Wow……… it is amazing the lengths that our Michigan Courts will go to in protecting insurance companies. You would thinking that there should be some law that requires good faith and fair dealing between an insuror and it’s insured. [there is]
You would think that there should be some law that recognizes that the insurance companies know more about the insurance laws than their policy holders and that they should not be allowed to take advantage of that knowledge to deny claims. [there is]
The concept espoused by the Courts that "you should have gone to an attorney to see if they were hoodwinking you" is completely and unequivocally wrong.
Families of brain injured children don’t have competent No-Fault Insurance attorneys on speed dial so that they can check and double check every statement made to them by their insurance adjusters nor could they afford it.
Why should families have to go hire an attorney to make sure they are not being deceived by their own insurance company. The money spent on an attorney to answer questions that their own insurance company knows the answer to is money that should be spent on the care, rehabilitation and recovery of that child. Period. End of story.
Bravo to Michael Dabbs and all the legislators and supporters of this proposed legislation. If you would like to contact your own state representative to let them know that you support the passage of these bills – bills that will protect children who have suffered a brain injury and their families – click here to contact your senator or representative and let them know how you feel.
Mr. Smith has practiced as a trial attorney since graduating Notre Dame Law School in 1992. He has litigated cases across the country including cases from Ventura County, California to Middlesex County, New Jersey. He practices in both State and Federal courts.
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