Car Hits Twelve-Year-Old Girl Standing on Sidewalk
Our daughter was injured as a pedestrian in a serious car accident while standing on a sidewalk with a friend. An underinsured driver jumped the curb while making a left turn and hit our daughter straight on, flying her up in the air, where she landed on top of the car hood and was slammed to the ground as the car continued driving down the road without any regard for our daughter's well-being. We learned from her doctors that she had sustained a brain injury resulting in cognitive impairment, in addition to other physical injuries. Directly after the accident, she had to relearn simple math and forgot how to walk home from school, as examples. The accident occurred in 1997, and she has made substantial progress through great effort on her part and a relentless desire to get back what she had lost in the accident.
Allstate Denies Injury
Allstate contended that we had fabricated our daughter's injury and that we had convinced her she had suffered a brain injury, despite medical testimony to the contrary. Despite Allstate's lowball offer of $15,000 to settle our daughter's damage claim, the arbitrator awarded our daughter $1.4 million in damages for the injuries she sustained. Although Allstate represents that you are in "Good Hands," they offered only $15,000 on a $1,400,000 injury under our Uninsured Motorist coverage. During the arbitration proceeding, Allstate was even able, through their crafty lawyers, to get their own expert to change his testimony. He had written a prior report indicating that my daughter had suffered a closed-head injury and some degree of unconsciousness as a result of being hit by a vehicle as a pedestrian. Again, my daughter was hit by a vehicle, thrown on the vehicle's hood, and slammed to the ground as the driver drove off down the street without any regard for hitting my daughter. The Allstate expert changed his testimony during the arbitration hearing, saying that my daughter did not suffer a loss of consciousness, which is often a material element in supporting a brain injury, since the force of a car hitting a pedestrian did not necessarily constitute sufficient force to cause such an injury. These facts alone should speak volumes about what I consider Allstate's deceptive insurance practices in denying claims to their own customers. This is precisely why Allstate has one of the lowest ratings of all insurance companies in the United States.
Inadequate Insurance Coverage
I was advised repeatedly that the Personal Umbrella Policy that I purchased in the amount of $1,000,000 applied to my daughter's injury under the Uninsured Motorist provisions. However, after we had won two prior verdicts, Allstate prevailed in subsequent lawsuits through the appeal process by convincing a jury that no such coverage ever existed under Allstate's Umbrella policy. Allstate never offered such protection, although they advised me on several occasions that it was my fault for not reading cover to cover my lengthy policy, which has more loopholes than Swiss cheese. Instead of $1,250,000 of protection, we only had $250,000.
Umbrella Policies and Uninsured Motorist Protection - Buyers Beware
When I purchased my Personal Umbrella Excess Liability Policy from Allstate Insurance Company, I was advised that the $1,000,000 of additional Umbrella coverage was in addition to my underlying $100,000 of Uninsured Motorist coverage, which was later increased to $250,000, as well as to my bodily injury portion. Subsequently, when I asked to increase my Uninsured Motorist coverage, I was advised by Allstate that all I had to do was simply increase my Umbrella from $1,000,000 to $2,000,000, which I did in order to protect my family in the event one of us was injured by an uninsured or underinsured motorist. Uninsured motorist coverage can be obtained at very little expense, and the protection to one's family is of utmost importance due to the high number of uninsured and underinsured motorists in the State of California. This is precisely why certain insurance companies do not advise their insureds to get additional uninsured motorist protection, since they do not want to pay large claims for injuries sustained by an uninsured or underinsured motorist.
California Law
California only requires by law that a driver carry a minimum of $10,000 of bodily injury coverage per person. For example, the woman who hit my daughter was only required by law to have $10,000 in insurance to cover my daughter's injuries, which were in excess of $1.4 million. An umbrella policy offers substantially more liability protection, in amounts of $1,000,000 or more, at very little additional cost. In my situation, at the time I believed I purchased the policies, I only had $100,000 in Uninsured Motorist coverage when I was led to believe I had an additional $1,000,000 of coverage on top of that.
The uninsured limits were eventually increased to $250,000 only because Allstate now required higher underlying limits for the Personal Umbrella to apply. The Allstate agent testified in court that Allstate would never advise you to obtain more uninsured motorist protection once you met the minimum of underlying coverage for the Umbrella to apply, since he would never advise you that the Umbrella did not apply ("sneaky"), again leaving their insureds subject to substantial risk and exposure if hit by an underinsured motorist.
Under California state law, an insurance agent is not required to advise customers that they should obtain increased uninsured motorist coverage, nor are they required to advise them that their particular Umbrella Excess Liability policy is not linked to the uninsured motorist portion. However, certain insurance companies doing business in California offer an umbrella excess liability policy linked to the uninsured motorist protection, such as Farmers Insurance Company. State Farm Insurance Company used to link the two but stopped doing so in 1996. I contacted a State Farm insurance agent on January 21 and asked if the two were linked. She indicated she was not sure but would contact her underwriter and get back to me, and she was then informed that State Farm no longer offered Umbrella protection linked to the Uninsured Motorist protection as of 1999. I then asked her what the maximum uninsured motorist coverage one could obtain through State Farm was. She did not know off the top of her head, but after looking at one of her policies she indicated $250,000, which is not adequate in my opinion. When an Umbrella Policy is purchased from Farmers Insurance Company (at least as of a year ago when I last checked), the insured is offered an option of having the umbrella tied to the uninsured motorist portion by checking a box.
However, Allstate has no such election or coverage. It is also possible to go outside of the "Good Hands" Allstate company and obtain a stand-alone umbrella policy that is linked to the uninsured motorist coverage.
Our Agent Mike Baldwin Goes Outside of Allstate to Get Protection Not Offered by Allstate
In fact, our agent with Allstate, Michael Baldwin, did exactly that. He went outside of Allstate and obtained an Umbrella policy from State Farm that was tied to the Uninsured Motorist policy in order to protect his family. He admitted in a court of law that during his 20-year career with Allstate he never advised any of his clients that (1) the Allstate Umbrella policy was not linked to the Uninsured Motorist coverage, and (2) an insured can go outside of Allstate to obtain an inexpensive Umbrella policy that is in fact linked to the Uninsured Motorist coverage, as he did. When I obtained an Umbrella policy, he had already gone outside of Allstate to obtain such protection for his family. It was never offered to me, since he testified that it would have been too confusing for me to understand this concept and this would be a recipe for disaster. The real recipe for disaster was not having Umbrella protection for my daughter's injuries, a concept that totally escaped Mr. Baldwin. I had referred Mike Baldwin numerous clients, including my mother and other friends. I also lectured at his church on estate tax matters. I considered Mike a friend, but he concealed this information from me. He indicated that he did not have a duty or a moral obligation to tell me. He also admitted in a court of law that during his 20-year career, none of his customers ever asked whether the Umbrella was tied to the Uninsured Motorist coverage.
The reason no customers ever asked this question is the belief that such coverage under an Umbrella policy applies equally if the insured, or someone in their family, is injured. Even insurance agents are under this mistaken belief, as are attorneys, judges, and the average consumer. Even the attorney who was representing me in the court action, who had over 30 years of insurance litigation experience, was not aware that his Umbrella and Uninsured Motorist protection were not linked until he took my case and checked with his insurance company. After checking, he immediately went outside of his insurance company to obtain an Umbrella policy, for only a couple hundred dollars a year in premiums, that was in fact linked to his Uninsured Motorist coverage.
Dirty Secret
This is one of the dirtiest secrets in the insurance industry, and Allstate is one of the worst offenders. It has one of the lowest ratings among attorneys who represent clients against Allstate for denial of claims. I strongly advocate that the law in the State of California, as well as other states and perhaps even federal law, should be changed so that an insurance company that does not offer Umbrella protection linked to the uninsured motorist provisions is required to advise its customers that they can go outside that particular insurance company to obtain such a policy at very little expense and without terminating any of the insurance coverages with the primary insurance company. A better solution would be to require all insurers to offer Umbrella policies tied to Uninsured Motorist protection.
The Personal Umbrella policy that was sold to me protects everyone in the world for injuries caused by me, but my family are the only ones in the world who are not protected under this same policy to the extent I protect total strangers. It is hard to believe that my family happens to be the only ones outside the Umbrella. Ordinary consumers as well as sophisticated individuals are not aware of this serious potential gap in insurance coverage.
We believe that Allstate's conduct over a substantial number of years is despicable and immoral. We strongly advise the California Insurance Department to change the laws in California to protect other insureds from the same fate that we suffered under the "Good Hands" of the Allstate Insurance Company.
Allstate Decreases Insurance
When I first met Mr. Baldwin to discuss my insurance needs, I had three times the uninsured motorist coverage that I had when I walked out of the meeting with him. Although he testified in a court of law that he never decreases the insurance coverage of an insured when he reviews their existing coverages, he subsequently decreased mine by two-thirds of what I had in place before the meeting.
At the time, I was teaching income tax and financial planning at UC Berkeley at the Graduate School of Finance level, attending the graduate law degree program through NYU Law School in taxation, and working as a tax attorney for a sophisticated East Bay law firm. Yet Mr. Baldwin stated in a court of law, but only after being prepped by clever Allstate attorneys following his deposition, which went poorly in my opinion, that I was incapacitated and unable to make any insurance decisions on behalf of my family and that my wife had to make all of the insurance decisions on my behalf. He made no such claim during his deposition.
He further testified that we declined any increased uninsured motorist coverage because my wife wanted to save $18. My wife was not even involved in discussions regarding our insurance needs, since she was taking care of our two small children at the time. His testimony that I was incapacitated is clearly without merit and a complete fabrication of the truth. This is further evidence that Allstate will go to any length to win a case in blatant disregard of the truth, in my opinion.
Change Hands - Change the Law
We believe that the testimony of Mike Baldwin, as well as Allstate's egregious actions in this case, should serve as the "Poster Child" and "Poster Company" for reform of the insurance laws in the State of California as well as on a federal level. Join me in making this a reality and forever changing the insurance laws so that when an insurance company represents that you are in "Good Hands," you are in fact in "Good Hands," with all fingers attached and without serious gaps in coverage that they do not disclose to you. Please check with your insurance company to be sure that you have adequate insurance protection as well as an Umbrella policy tied to your Uninsured Motorist protection. If necessary, change hands. We would never want anyone else to suffer the same fate that we experienced by not having adequate insurance protection for our daughter's injuries due to lack of disclosure as well as misrepresentation, in my opinion, on the part of an unscrupulous insurance company.
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