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Insurance Company Loses Lawsuit over Cancelling Coverage

I just read about this lawsuit that ended last month, and I think it’s worth mentioning: A Boulder County, Colorado jury found that an insurance company was in breach of contract when it canceled Jennifer Latham’s health insurance coverage after her wreck. The jury awarded $37 million in damages to Latham.

Latham was injured in 2005 when a man fleeing police crashed into her car. Her husband Alex was also in the car, and the accident occurred near their home. Both received serious injuries. Alex was in the hospital for eight weeks, and Jennifer was in the hospital for six weeks.

After the wreck, Assurant Healthcare cancelled Jennifer’s health insurance coverage.

“Our family health care was denied after this accident once they saw the injuries and (the cost) to repair injuries,” said Alex.

But, wait a minute, isn’t this why we pay for insurance? How can they just cancel it like that after an accident?

The reason given by the insurance company was that Jennifer had failed to disclose all of her medical incidents. Specifically, Jennifer had forgotten to mention one emergency room visit for shortness of breath and a uterine prolapse episode. (It’s very important to be thorough about your medical history with insurance companies.)

When her coverage was cancelled, Jennifer was stuck with a bill for $185,000. She decided to sue, and the jury found in her favor.

What’s really interesting about this case is that Jennifer’s lawyer asked for only $7 to $8 million in damages, and the jury awarded $37 million in damages. Juror Denise Kaatz explained, “We realized that $37 million is a lot of money, but we felt we had to send a message. Anything less, and the message might not have been heard by Time (Time Insurance, which operates Assurant), since they’ve continued with this practice for the past five years despite other lawsuits.”

The jury found that Assurant failed to prove that Jennifer Latham had deliberately misrepresented her health or lied on her insurance application. However, at least one jury member felt that the insurance company seemed dishonest.

“We had to determine who was lying,” said Kaatz. “Most of [the insurance company’s] witnesses seemed dishonest, defensive and just showed a basic lack of humanity. It was kind of frightening.”

During the trial, Latham’s attorney Marc Levy pointed out the insurance company’s “recession panel” reviewed more than a hundred cases in two hours, giving each case “68 seconds apiece.” Levy also argued that the company had not changed its recession process even though it had been fined by the Colorado Division of Insurance.

My hat goes off to Jennifer Latham for standing up against the insurance company. If you need to stand up to an insurance company that has wronged you, contact an experienced Georgia personal injury lawyer for legal advice. Call MLN Law at 404-531-9700 to schedule a free consultation.