Vested Interest - News and Notes - September 2002 Issue

Homeowners Insurance Rates Up

The Insurance Information Institute (III) has reported the cost of homeowners insurance has increased an average of 8 percent in 2002 and is expected to increase 9 percent in 2003. III said mold claims, "which were virtually unheard of just a few years ago, cost homeowners’ insurers more than $1 billion last year, approximately five times the cost in 2000. It also found homeowners’ insurers paid out $1.18 in losses and expenses for every $1 they earned in premiums over the past decade. It said homeowners’ insurance losses totaled about $19 billion during the past three years. (Liability & Insurance Week – July 1, 2002)

No Recourse for Children

The newspaper industry has argued for decades that children who deliver papers aren’t employees but "little merchants," independent contractors who buy newspapers wholesale and sell them at retail prices. This independent status saves newspapers money on workers’ compensation insurance and essentially absolves them of any responsibility for the welfare of their child deliverers, a position that dismays some legal and workplace experts. As a result, it is largely unknown what happens when a child gets hurt or killed delivering newspapers. In most cases, the newspaper is not responsible for paying medical bills or providing workers’ compensation benefits. (The Wall Street Journal – July 19, 2002)

Deaths Linked to Hospital Infections Preventable

Deaths linked to hospital infections in 2000 were 14 percent higher than the federal government estimated, and nearly 75 percent of the deaths could have been prevented. About 103,000 deaths were linked to hospital infections, 13,000 more than the Centers for Disease Control and Prevention calculated last year. Many of the deaths were caused by unsanitary facilities, germ-laden instruments and unwashed hands. Infection rates are soaring nationally, exacerbated by hospital cutbacks and carelessness by doctors and nurses. (AP – July 21, 2002)

Insurance Companies Exclude Mold Coverage

State Farm Mutual Insurance, the largest home insurer, has eliminated coverage for mold in 33 states. Even if the mold is the result of storm damage covered by a State Farm policy, the company won’t pay to eliminate it. Allstate Insurance has added language to clarify it doesn’t’ cover "mold, fungus, wet rot, dry rot or bacteria" unless the problems arise from events already covered by the policy. Rep. John Conyers (D-Michigan) has drafted a bill that would create a federal insurance fund for homeowners whose insurance policies don’t cover mold claims. (The Wall Street Journal – August 8, 2002)

Americans for Insurance Reform Organized

With premiums soaring for almost every kind of insurance, more than 60 consumer organizations around the country have banded together to mount a campaign against what they regard as price gouging. Americans for Insurance Reform says that by uniting they expect to have a stronger voice and to be more quickly able to gather information on insurance developments. (The New York Times – July 30, 2002)

FDA Rebukes Maker of Diet Drug Meridia

The FDA has told the maker of the diet drug Meridia that it violated federal regulations by failing to properly report the deaths of patients taking the drug. The FDA said that information about seven deaths associated with Meridia was not reported properly to the agency, that one death was not reported at all, and that reports on three other deaths were incompletely reported. (The Washington Post – August 7, 2002)

HHS Issues Final Version of Patient Privacy Rule

Health and Human Services Secretary Tommy Thompson announced final changes to the patient privacy protection rule issued by the Clinton administration in December 2000 and opposed by insurers. The final rule takes effect April 14, 2002, and omits a requirement that patients must give written permission before their personal health information can be handled by doctors, hospitals, pharmacies and insurance plans. Health insurers and hospitals welcome the change. (Liability & Insurance Week – August 12, 2002)

Insurance Rates Won’t be Lower

Despite new limits on medical malpractice liability, the primary insurer of obstetricians in the state of Nevada said it won’t lower its rates anytime soon. A broker with the insurance company was quoted as saying "We’re not going to be lowering rates simply because we’ve had a bad history here in Las Vegas, and insurance prices are based on history. But we do think rates will stabilize in the future, and we don’t expect to increase premiums." (Liability & Insurance Week – August 19, 2002)

South Carolina Court Secrecy Faces Scrutiny

Two of South Carolina’s top judges, one federal and one state, say they want to ban or limit secret court settlements, especially in cases where the public’s safety is at stake. U.S. Chief Judge Joe Anderson, in a letter to prominent lawyers and the state’s 12 other federal judges, cited his concerns with secret court-approved agreements in cases involving defective Firestone tires and incompetent South Carolina doctors. (The State – July 14, 2002)