Wednesday, March 18, 2015

OIC helps develop training for examining, analyzing insurers’ climate change risk

As the state’s insurance regulator, one of the things the Office of the Insurance Commissioner does is examine and analyze insurers’ finances to make sure they have enough money in cash and investments to pay consumers’ insurance claims. Climate change is increasingly a risk to insurers’ business, both from a claims standpoint and from an investment standpoint.
Some of OIC’s friendly financial examiners participate in a dry run of a new training for state regulators to evaluate insurers’ climate change risk.

Commissioner Kreidler has led the climate change work group for the National Association of Insurance Commissioners (NAIC) since 2006. As part of that work, the OIC led a work group that developed the guidance for other state regulators to use when evaluating insurers’ climate change risks and investments during financial examinations and analyses. Last week, the OIC’s financial examiners and analysts were given a dry run of the training to offer feedback before it is presented to other state regulators. In essence, insurers are expected to identify climate change-related risk to their business and evaluate how these factors may affect their claims and how they invest their money.

Washington is not new to working with insurers on climate change. Since 2010, our state has been one of a handful that requires insurance companies to answer an annual survey about how they are addressing their risk related to climate change.

You can read more about Commissioner Kreidler’s work with climate change and read the most recent report about how insurers are addressing climate change.

Monday, March 9, 2015

Tacoma woman trades guilty plea, diversion program for dismissed charges in insurance fraud

Isabel Osorto, 23, of Tacoma, pled guilty to insurance fraud and agreed to complete a diversion program in exchange for the charge being dismissed.

The charge stems from a December 2012 collision in which Osorto hit another car. Later that day, she purchased insurance for her car and filed a $9,000 hit-and-run claim on her car three days later. The insurance company was tipped off that something was amiss when the driver of the car she hit contacted her insurance company about the damage to his car, which was supported by the citation she was issued by Washington State Patrol. She was charged with one count of insurance fraud in September 2014.

The terms of the diversion program include pleading guilty, full repayment of the restitution amount, payment of all administrative fees and full compliance with all program requirements. In this case, the restitution amount is zero because the insurance company did not pay Osorto’s $9,000 claim. The charge against Osorto will be dismissed once she completes the terms of the program. If she fails to complete the program, the charge against her will be reinstated.

The OIC’s Special Investigations Unit investigates insurance fraud and works with the Attorney General’s Office or local law enforcement—in this case, Pierce County – to prosecute criminal cases. Consumers can report suspected insurance fraud on the Insurance Commissioner’s website.

Thursday, March 5, 2015

Will my insurance pay to replace a damaged convertible top?

The unprecedented sunshine we are experiencing in the Pacific Northwest may be enticing drivers to take their convertibles out for a spin. But do you know what your insurance policy will cover if something happens to your top or interior? 

Depending upon the age of your vehicle, your insurance company may not pay for the full replacement cost of the convertible top if it is torn from the vehicle or someone damages it. Some companies apply what they call “betterment” to the value of the car, taking into consideration the car’s age and condition. Another way of describing betterment is thinking about life span – car parts have different life spans and once they near the end of their life span, paying the full cost of replacing those parts would result in your car being in better shape than it was when it was damaged, thereby increasing its value.

The same idea applies to the interior of your vehicle. If someone damages the interior while your open convertible is parked somewhere, the insurance company may not pay the full cost of replacement or repair. It is also important to note that standard auto policies do not cover any personal property in the vehicle and any equipment that was not installed by the manufacturer. After-market items like sound systems, paint jobs and other special or upgraded equipment very well may not be covered by your policy.

Talk to your insurance agent about what your policy covers and does not cover.

Read more about auto insurance on our website. Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Tuesday, March 3, 2015

Insurance Commissioner offers considerations about sharing economy

Forbes estimates up to one quarter of the population participates in some form of the sharing economy, whether it be ridesharing, renting out your home or sharing something you already have to make money.

We put together some information and tips for entrepreneurs and consumers alike to consider before they participate in the sharing economy. You can find that information here. 

Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Monday, March 2, 2015

Protecting insurance consumers all year round

This week is National Consumer Protection Week and the OIC is one of the many government agencies that helps protect consumers from financial harm.

So what does that mean for Washington consumers?

Consumer protection is part of the OIC’s mission, which is reflected in the way we do business. Our consumer advocates can help:
In 2014, our consumer advocates fielded 6,135 consumer complaints and helped recover more than $9.5 million in insurance billings, refunds and other claims-related issues for Washington citizens. Read more about the ways we helped consumers in 2014.

We share information of interest to insurance consumers on this blog and through our social media channels. Many of our blog posts are generated by questions our consumer advocates receive from Washington citizens.

More resources for consumers:

Consumer advocates Andy and Barb helping consumers on the phone.   

Monday, February 23, 2015

Warranty buyers beware - know what you are paying for

Consumers can buy warranties on any number of products these days, ranging from a new vehicle to a small gadget or appliance. Before you lay down more money for a warranty, here are a few things you should know:
  • Be sure you fully read any warranties before you buy them and don't be afraid to ask questions if something you read needs clarification.
  • Warranties do not cover all damage. For example: Vehicle warranties may exclude damage related to after-market modifications to engines, power trains or suspension systems. If you buy a used vehicle that comes with these types of modifications, the warranty may not cover damage to or in the event that those modifications fail. Be sure you understand the limitations of any warranty you are thinking about buying.
  • Some warranties require you to pay a fee or copayment if you need to use the warranty. For example, smartphone warranties often require you to pay a fee each time you use them.
  • Do the math. Weigh the cost of the warranty over the time period it covers. Would it cost you the same or less money to replace the item if it broke during the warranty period?
  • Does your homeowner or renter's insurance cover the item? Your policy may cover you if the item is stolen or destroyed in a fire or other incident. Check your policies and deductibles first, and remember that insurance policies typically don't cover damage to items that you break. 
Read more about warranties and service contracts on our website. Questions? You can contact our consumer advocates online or at 1-800-562-6900.

Friday, February 20, 2015

Does your insurance premium seem high? Make sure your agent has right info

If you receive your homeowner or automobile insurance renewal and think the premium doesn’t seem right, it’s a good idea to check in with your insurance agent to make sure the company is using accurate information in the rating of your policy. Insurers use many factors to determine the amount you pay for insurance, some of which include where you live, the type and value of the property you are insuring, your driving record, marital status and your driving habits.  

You should confirm all of that information is accurate, including your social security number, which insurers collect for to get your credit score. Most insurance companies use information in your credit history and other factors to calculate your rate. Each company weighs these factors differently, so your credit score’s effect on your insurance rates will vary from company to company. Read more about credit scoring and insurance

If your insurance agent or company has any of this information incorrect, it can result in you paying more—or less--than you should for your insurance.

If you have questions about insurance, contact our consumer advocates online or at 1-800-562-6900.

Thursday, February 19, 2015

Consumer alert: Recent widows are target of life insurance scam

We’ve received reports that a scammer is targeting people who recently lost a spouse in the Spokane area.

The scammer has called several women who recently lost their husbands. The caller says there’s a life insurance policy on the spouse, but the policy hasn’t been paid on in recent months. The caller instructed the surviving spouse to send cash or gift cards in order to get the life insurance benefit. In all cases, no policy existed.

If you get an inquiry from someone who says they have an insurance policy you’ve never heard of, document as much information as you can in case you need to report it to the police. Then, call the insurer and determine whether there is in fact a policy. You can look up insurance companies and their phone numbers on our website. If you find out someone is attempting to scam you, report it to your local law enforcement agency. You can find a list of law enforcement agencies on the state's 211 website.

An insurance company will never call you and ask you to send them cash or gift cards in order to get a life insurance benefit. Sadly, even during a time of grief, consumers have to be on guard against scammers.

More information:

Wednesday, February 11, 2015

Top 10 types of complaints we got from consumers in 2014

A big part of what we do is helping consumers resolve complaints they have against insurance companies. In 2014, we received and processed 6,135 complaints from consumers and helped them recover more than $9.5 million in insurance billings, refunds and claims issues.
Here are the top five categories of complaints we fielded from consumers in 2014 for both property and casualty (P&C) insurance, and life and disability (L&D) insurance. 
Property insurance covers losses of physical property, including homes, rental residences, anything you own, vehicles, boats, and essentially anything you own. Casualty insurance pays for negligence and liability. Collectively, property and casualty insurance is referred to as P&C insurance. Not surprisingly, three of the top five complaint types we got for P&C insurance involve auto insurance and claims.
  1. Auto insurance liability claims. Frequent complaints we heard from consumers involved disputes of liability in auto claims, the degree of their liability in the claim, poor investigations by insurers, disputed accident facts and complaints from at-fault drivers about insurers trying to collect money from them.
  2. Personal injury protection (PIP) claims. Washington drivers can get PIP insurance to pay for claims that involve injuries to the driver and passengers in their personal vehicles. We received complaints about delayed payments, denied claims, reduced payments, insurers questioning the medical necessity of care, and their requests for medical exams following an accident. PIP insurance is additional coverage to an auto insurance policy and consumers can choose to waive the coverage; however, they often don’t recall waiving the coverage and call us to complain that their insurer won’t pay PIP claims. It’s important to read your policies and know what you are covered for.  
  3. Auto collision claims. Complaints included delayed payments, denied payments, reduced payments, and arguments about what caused the collision. Insurers do not have to pay for damage that wasn’t caused by a covered peril, such as a collision. For example, if the car’s axle snaps and causes the driver to crash, the insurer will pay for the collision damage but they won’t pay for the snapped axle because it’s a maintenance issue. We also heard from consumers who had complaints about the auto shops they selected to do the repairs. We do not regulate repair shops or repair work, so it’s up to consumers to work with the businesses they select.
  4. Commercial insurance claims. Commercial insurance is purchased by businesses to cover their property and liability related to their business. We heard from consumers about delayed claim payments, denied payments, reduced payments and disagreements about what caused the loss. As with auto collisions, we heard from businesses that had issues with contractors and the way they did repair work, which is not under our regulatory authority. We also heard from businesses about premium audits, which insurance companies are allowed to conduct periodically to evaluate whether the business is paying a premium that’s too high or too low for their policies, and we received complaints when insurers canceled or opted not to renew policies, which they are allowed to do with advance written notice.
  5. Homeowner insurance, which covers your home, contents, and personal liability. We received complaints from consumers about delayed claim payments, denied claim payments, reduced payments, liability disputes, problems with contractors and their work, policy cancellations and non-renewals. We also received complaints about insurance companies not paying for the cause of the loss. For example, if an old hot water tank bursts due to rust and deterioration, and the water damages your floors, the insurer will generally pay for the damage to the floors but not to replace the old water tank, which is considered a homeowner maintenance expense. 
Life insurance pays your beneficiaries after your death. Health insurance helps pay for medicine, visits to the doctor or emergency room, hospital stays and other medical expenses. Disability insurance pays you an income if you become disabled and unable to work. We respond daily to questions about health insurance coverage and policies. Here are the top five complaint types:
  1. Medical necessity denials. Consumers filed complaints with us after their insurance companies denied surgery or treatment preauthorization because they questioned the medical necessity of the treatment. Health insurance plans define medical necessity in their contracts, which generally state the treatments must be in accordance with generally accepted standards of medical practice, clinically appropriate in terms of type, frequency, extent, site and duration and considered effective for the patient’s illness, injury or disease. Washington state insurance laws do not give our agency the authority to make medical judgments or determine when a treatment is medically necessary. When insurers deny coverage based on medical necessity, we encourage consumers to exhaust their appeal rights and involve their providers in their appeals.
  2. Preauthorization of certain medications. Health insurers require preauthorization of certain medications before they will pay for the drug, depending on if the drug is medically necessary. Medical insurance plans set medication policy criteria based on accepted standards of practice, peer-reviewed medical literature and the availability of similarly effective and less costly options, including generic drugs. Washington state insurance laws do not give our agency the authority to make medical judgments or determine when a drug is medically necessary. When insurers deny coverage based on medical necessity, we encourage consumers to exhaust their appeal rights and involve their providers in their appeals.
  3. Policyholder services. Some of the most common complaints we received involved premium notices and billing. The premium is the consumer’s monthly cost for insurance. We heard from many consumers who purchased a plan through the Washington Health Benefits Exchange. Because there was a delay in transmitting premiums from the Exchange to the health insurance companies, consumers’ health insurance was suspended and sometimes cancelled. We assisted consumers in establishing their coverage and getting medications. We also heard from consumers about cancellations. Sometimes policies were cancelled because the policyholder failed to advise the insurer that they had a different bank account, resulting in non-payment of premiums. In some cases we were able to get coverage reinstated. We also helped consumers reinstate their coverage when the entire family’s health plan was cancelled by mistake instead of removing coverage for just one family member. 
  4. Life insurance. Life insurance companies can require consumers to answer questions about their medical history and their lifestyle practices. Sometimes, life insurance policies lapse because the consumer misses payments due to a move or for other reasons. If this happens to you, contact the company immediately and ask that your policy be reinstated. Depending on your situation, the company may reinstate your policy without requesting that you provide current medical information.
  5. Claim-handling delays. We received complaints from consumers about delays in processing claims. In those cases, we contacted the company to find out the reason for the delay. Sometimes we found delays were caused by human errors--the wrong information was submitted by the medical provider or the provider used the wrong Current Procedural Terminology (CPT) code.  
If you have a complaint, contact our consumer advocates by phone or online. Read more about how we helped consumers in 2014.

Thursday, February 5, 2015

Washington consumers and the Anthem data breach

Insurance giant Anthem today announced that up to 80 million consumers nationwide may be affected by a data breach of current and former customers’ names, social security numbers, contact information and birthdates. It does not appear that any health information was obtained.

Anthem has told the Insurance Commissioner that affected Washington consumers are largely enrolled in Apple Health, the state’s Medicaid program. Anthem does not have any indications at this time that Washington consumers who are enrolled in private, individual health insurance are affected by the breach.

Insurers are required to notify the Insurance Commissioner of security breaches that involve Washington consumers’ information. The Insurance Commissioner will remain in close contact with Anthem as more information is available. The Insurance Commissioner is also working with the National Association of Insurance Commissioners on this increasingly common occurrence.

Anthem has created a webpage at for consumers to find information about the breach and set up a toll-free number for people with questions at 1-877-263-7995. Anthem will contact affected consumers and is offering free credit monitoring and identity protection to people who are affected.