The Harper Law Blog

The Harper Law Blog offers news, announcements, thoughts and articles on life, law and our practice areas of emphasis.

How Can I Reduce my Insurance Rates?

Posted Tuesday, May 09, 2017 by Ed Harper

How can I reduce my insurance rates and will the rates go up after an accident?

Well it depends. There are several factors that an insurance company will consider when determining what your car insurance rates will be, and whether they will go up, if it all, after an accident.

First of all, it is personal as the insurance company will look at the risk they are exposed to. When setting rates, an insurance company will be ascertaining personal information including your age, occupation and where you live. Further, your occupation can determine how much driving you do. Additionally, this will include things like what type of car you drive and where you live.

Actuaries help ascertain a drivers tendencies. They look for patterns of claims activity. They can also look at your credit score. The reason they these studies is to show that a person who can manage their financial affairs often is a predictor of the number and size of insurance claims he or she may file according to the Insurance Information Institute.

Secondly, insurance companies will determine rates based on the car you drive. Premiums are often based on the car’s sticker price, the cost to repair it, and its overall safety record and likelihood of theft. It should be obvious that a Ferrari would be a lot more expensive to repair than say a Nissan.

Other important factors are finding out your driving history, as well as your accident and ticket history. Safer driving in the past often informs the insurance company that you will be a safer driver and less likely to file a claim.

If you’ve been in an accident, they will look at the severity of the accident and the size of any claims made. Often time rates will increase if the accident is your fault, but stay the same if the other driver is at fault. However, exceptions can apply.

Additionally another way that insurance companies determine insurance rates results directly from the coverages you are applying for. Raising your deductible to an amount such as $1000.00, could save you 25% to 50% on your policy. Providing a higher deductible is self – insurance and can reduce your premiums.

Additionally, you can help lower your premiums by being and becoming a better driver. Just driving in a safe and calm manner can reduce the number of tickets you will receive and you will likely also save money in fuel costs.

You can also take a safe driving course or in accident avoidance course and consider asking your insurance company if this will reduce your premiums.You can also get a cheaper, lower risk vehicle for reasons mentioned above. Edmunds.com has considered 8 components –

• Depreciation • interest on financing • taxes and fees • insurance premiums • fuel• maintenance• repairs • federal tax credit that may be available

These 8 items will tell you what your cost for this vehicle would be over 5 years. You can also get a preview of what your insurance premiums will be by asking when you are car shopping on how much different vehicles will affect your insurance.

And finally, when all else fails consider switching insurance companies to obtain a discount for the same policy coverages. Don’t switch and fall prey to 15 minutes can save you 15% claims, if all the insurance company is doing is reducing your coverages. Be thorough and review your policy and call Ed Harper at 425 – 284 – 3333 Harper Law PLLC if you have questions regarding your auto insurance policy.

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Should a Plaintiff's Spouse Bring a Loss of Consortium Claim?

Posted Tuesday, May 02, 2017 by Ed Harper

Should a Plaintiff’s Spouse Bring a Loss of Consortium Claim?

Washington Pattern Instruction 32.04, the loss of consortium instruction, is based on an injury to the other spouse. But this instruction has been expanded of late to include other family members, and significant others. This instruction is based off RCW 4.56.250.

The loss of consortium cause of action is available to family members of a person injured or killed by the wrongful acts of another most likely it should be brought in all cases of wrongful death. However the decision-making process for plaintiffs and their attorneys is often not obvious. Numerous factors must be considered before a claim is raised for the uninjured spouse to the jury.

Every marriage is different and decisions must be made of how involved does the uninjured spouse want to be in the litigation. “If the spouse is reluctant, the claim will not present well to the jury. You must find out the most private, intimate aspects of your client’s marriage, and make sure both spouses understand that others will be getting this information, too.”

Numerous discussions should be held with the client to determine the spouse’s ability to testify regarding the injured spouses injuries and the impact the suffering had on the family.

On October 15, 2012, the Court of Appeals of Washington, Division I rendered this unpublished opinion in the case* Michael Tiedemann v. Allstate insurance company*; an unmarried couple who had lived in British Columbia in a marriage-like relationship for 3 ½ years could bring and maintain a loss of consortium claim.

Allstate made numerous mistakes in not objecting to the court permitting the loss of consortium claim as they had failed to raise this issue properly at the trial court level. “To preserve an evidentiary issue for appellate review, the specific objection made at trial must be the basis of a party’s assignment of error on appeal.” (State v. Guloy,) 104 Wn. 2d 412, 422, 700 5P 2d 1182 (1985). Because Allstate did not object to the challenged evidence on the grounds asserted on appeal, the court declined to consider these claims.

If you want more information on Loss of Consortium, see the article by Patricia Zimmer.

(http://www.americanbar.org/content/newsletter/publications/gpsolomagazinehome/gpsolomagazineindex/zimmer.html)

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Insured's Fraud can Void an Insurance Contract

Posted Saturday, April 29, 2017 by Ed Harper

Insured’s Fraud can Void an Insurance Contract

The case of Mutual of Enumclaw v. Clinton Cox, 110 Wn. 2nd 645, 750 P 2nd 499, points out that an insured’s overreaching and making “mistakes” in his itemization of lost items in a fire can void a contract.

In this case arising from a fire at a Clear Lake Washington home owned by Clinton C. Cox, Dr. Cox made numerous mistakes in his itemized inventory following a fire that destroyed his house on December 7, 1984. Dr. Cox had purchased a homeowner’s insurance policy with Mutual of Enumclaw Insurance Co. (MOE). Following the fire Dr. Cox provided a 143 page inventory list for items of his personal property he had lost. These items totaled $324,420. The amount greatly exceeded the $137,000 of unscheduled personal property coverage.

MOE hired an investigator to sift through the remaining fire debris. The investigator found no trace of certain items claimed lost by Dr. Cox. These items included such items as jewelry, a television, a video cassette recorder and 8 bronze sculptures. Then MOE deposed Dr. Cox to discuss these missing items. Cox denied that he tried to defraud MOE, but he admitted to making numerous mistakes on the inventory list. (See Cox, at 645 – 46.)

MOE commenced a declaratory judgment action against Cox. This was based on an antifraud provision within the policy. The antifraud provision reads as follows: “misrepresentation, concealment or fraud – this entire policy is void if, whether before or after a loss: an insured has willfully concealed or made up or misrepresented: any material fact or circumstance concerning this insurance; or to an insured’s interests herein.” A trial was held wherein Dr. Cox alleged bad faith arising from MOE’s denial of the claim. MOE in their defense claimed that Dr. Cox and his “mistaken” inventory list voided the policy. The anti-fraud provision stated “where there has been fraud or false swearing by an insured regarding any matter relating to this insurance or subject thereof.”

The trial court allowed the case to proceed to a jury trial in the Superior Court, and entered this order on an initial motion for summary judgment. 1. Even where the actual loss exceeds the policy limits, fraud is material and voids the policy; 2. As a matter of law the insurance policy was not severable and, therefore, fraud would void the entire policy; and 3. As a matter of law there was no waiver or estoppel resulting from interim payments by mutual Enumclaw to Cox when the trial ended the jury returned a verdict for Cox

However on MOE’s post-trial motion, the trial court granted a judgment notwithstanding the verdict to Mutual of Enumclaw. The court held that Cox’s fraud included his use of estoppel. Cox appealed the trial court’s decision to this court. The court held “if Cox’s misstatements had simply been errors in remembering what property was at Clear Lake, then clearly no fraud would’ve occurred. However Cox deliberately claimed that numerous expensive items had been destroyed although he knew that the items were not in the house at the time of the fire. We find no merit in Cox’s claim that Mutual of Enumclaw induces false statements.”

“Moreover a party claiming estoppel must have proceeded in good faith and with ‘clean hands.’” See 110 Wn. 2d 650

“Washington follows the rule that the doctrine of equitable estoppel is available to innocent parties only.” (Citing Christman v. General Construction Company). We see no reason to deviate from Christman.”

“Nevertheless the court finally realized that Cox’s assertion of estoppel was improper incorrectly gave a judgment notwithstanding the verdict in favor of MOE. (MOE v. Cox at 652)

This case points out that an insured has an obligation to be honest and not overreach in their listing of items requesting competence in their request for compensation from their insurance company.

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Insurer's Failure to Act in Good Faith in Defending Subject to a Reservation of Rights

Posted Tuesday, April 04, 2017 by Ed Harper

Insurer’s Failure to Act in Good Faith in Defending Subject to a Reservation of Rights

Washington Pattern Instruction 320.03 states: “An insurer who, under a reservation of rights, defends the claim, and owes a duty of good faith to its insured. This duty requires the insurer to: - thoroughly investigate the liability and damage issues related to the claim; or - retain competent defense counsel, recognize that the defense counsel represents only the insured and not the insurer, and act accordingly; or - fully inform the insured that the insurer is defending the case subject to a reservation of rights; or- fully inform the insured of all developments relevant to the policy coverage and the progress of the claim against the insured; and - refrain from conduct to demonstrate a greater concern for the insurer’s financial interest then for the insured’s financial interests.

An insurer who fails to fulfill this duty and/or any of these duties fails to act in good faith.”

With Safeco v. Butler, 118 Wn.2nd 383, 820 P.2nd 499 (1992), delineates when an insurance company fails to protect its insured’s interests when utilizing a reservation of rights. In Butler the insured, Hap Butler, took off after several delinquents who had destroyed his mailbox. He ran into his house grabbed 2 loaded handguns and got in his car. He chased the delinquents through the streets of Spanaway.

Butler claimed he a saw flash coming from the truck holding the delinquents and believed someone in the truck was shooting at them. Butler shot back and injured Eddie Zenker in the head. A civil suit ensued with Zenker suing Butler for his injuries.

Safeco had an insurance policy to defend Hap Butler. “An insurer’s duty to defend the insured is one of the main benefits of the insurance contract.” (Cite omitted) The insurer who accepts that duty under a reservation of rights, but then performs the duty in bad faith, is no less liable than the insurer who accepts but later rejects the duty. (Butler at 392) The court has articulated an insurer must give equal consideration to its insured. (Cites omitted) In the case of Tank v. State Farm Fire and Casualty Company 105 Wn. 2nd 381, 715 P.2nd 1133 (1986) the language is clear that the fiduciary relationship between an insurer and an insured is not a true fiduciary relationship. Tank holds that an insurer must give equal consideration to the insured’s interests. However under a true fiduciary relationship, the insurer would have to place the insured’s interests above its own. (Butler at 389)

Safeco had raised a motion for summary judgment which had been denied at the trial court level. The Supreme Court of Washington determined that Safeco had possibly acted in bad faith, and disputed as a material fact that precluded Safeco’s motion for summary judgment.

“To summarize our holding so far: we hold (1) harm is an essential element of an action for an insurer’s bad faith handling of a claim under a reservation of rights; (2) if the insured shows by a preponderance of the evidence the insurer acted in bad faith, there is a presumption of harm; (3) the insurer can rebut the presumption by showing by a preponderance of the evidence its actions did not harm or prejudice the insured closed; and (4) if the insured prevails on the bad faith claim the insurer is stopped from denying coverage.” (Butler at 394) Here the court sided with the insured Butler, who was presumably prejudiced and remained at trial on whether Safeco acted in bad faith.

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Insurer's Duty of Good Faith - General Duty

Posted Tuesday, March 28, 2017 by Ed Harper

Insurer’s Duty of Good Faith - General Duty

Washington Pattern Instruction 320.02 states: “An Insurer has a duty to act in good faith. This duty requires an insurer to deal fairly with its insured. The insurer must give equal consideration to its insured’s interest and its own interests and must not engage in any action that demonstrates a greater concern for its own financial interests than its insured’s financial risk. An insurer who does not deal fairly with its insured, or who does not give equal consideration to its insured’s interests, fails to act in good faith.

In proving that an insurer failed to act in good faith, the insured must prove that the insurer’s conduct was unreasonable or frivolous and/or unfounded. The insured is not required to prove that the insurer acted dishonestly or that the insurer intended to act in bad faith.”

RCW 48.01.030 sets up the statutory basis for this jury instruction:

“The business of insurance is one affected by the public interest requiring that all persons be actuated by good faith; abstain from deception and practice honesty and equity in all insurance matters. Upon the insurer, and the representatives rest the duty of preserving inviolate the integrity of insurance.”

The insurance company must hold their interests in equal consideration with the interests of their insured. With* Mutual of Enumclaw v. Dan Paulson Construction Inc., 161 Wn.2d 903, 169 P.3d (2007) the Supreme Court of Washington noted that because of Mutual of Enumclaw, “Subpoenaed to the arbitrator, explaining into ex parte letters to the arbitrator,” it needed information to resolve its coverage dispute with Dan Paulson Construction Inc. (DPCI). The court held that “Mutual of Enumclaw’s subpoena and ex parte communications to the arbitrator constituted bad faith, that mutual of Enumclaw did not rebut the resulting presumption of harm to DPCI, and that Mutual of Enumclaw did not raise a genuine issue of material fact with respect to whether the settlement amount was reasonable.” (MOE* at 908.)

Initially the court ascertained the standard that an insurance company must avoid any action that may infringe on their obligation of fairness towards its insured because of “Potential conflicts of interest between the interests of insurer and insured, inherent in a reservation of rights defense.” -* Tank v. State Farm Fire and Casualty Company,* 105 Wn. 2nd 381, 383, 715 P. 2nd 1133 (1986). The court factually determined that by sending it subpoena and two letters to the arbitrator, Mutual of Enumclaw clearly had greater concern for its own interests then how its conduct might affect DPCI financial risk. “Mutual of Enumclaw’s great concern for its own interests and lack of concern for DPCI’s risk conclusively demonstrates that Mutual of Enumclaw had a greater concern for its own interest than for DPCI’s financial risk. (Tank at 388). The conclusion was that Mutual of Enumclaw acted in bad faith.

Furthermore, the court determined that due to Mutual of Enumclaw’s bad faith interfered with the defense DPCI, Mutual of Enumclaw failed to rebut the presumption of harm to their insured. This presumption of harm arises as, “Insured should not be required to prove what might’ve happened had the insurer not breached its duty to defend in bad faith; that obligation rightfully belongs to the insurer who caused the breach.” Kirk v. Mount Airy Insurance Company, 134 Wn 2nd 558, at 563, 951 P.2nd 1124 (1998).

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