Void Ab Initio: An Unfair Legal Fiction

You would think that a contract is a contract is a contract. We expect parties to uphold their ends of a contract whenever they enter into them.

Unfortunately, that is not the case with some insurance companies.

I will not mention specific insurance companies, but some insurance companies try to weasel out of claims by using a process called “void ab initio.”

Void ab initio is a legal fiction that allows one party to a contract to pretend that the contract never existed. Some insurance companies use this legal fiction in order to avoid an insurance contract rather than paying the value of claims when they occur.

What happens in a void ab initio action is the insurance company returns all your policy premiums and then pretends that your insurance policy never existed because it  supposedly never would have written your policy if it had known about certain facts.

Those insurance companies will happily take your insurance premium monies for years until you  or somebody else makes a claim. After you or someone else makes a claim, the insurance company holds what is called an Examination Under Oath (“EUO”) EUO in order to  discover something that would allow them to void your policy contract. The insurer is often looking for a way to deny your claim if it holds an EUO.

Sometimes they will do it based upon just a recorded statement.

So what do the insurance companies look for?

Well, it can be as simple as somebody who lives in your home that you did not disclose to your insurance agent when you got the policy. I have seen insurance companies  deny coverage because the insured party did not disclose that they had children of 15 years or older living with them, live with their parents, had roommates, or anything else that would raise the premium by such an insignificant amount is $10 (or maybe less) per policy period.

I have also seen this occur once somebody has changed their address without notifying the insurance company.

One insurance underwriter admitted during her deposition that her insurance company was engaging in what is called “post-claims  underwriting.” All that means is the insurance company  is trying to reach back in time in order to say they would not have underwritten your policy had they known about some fact.

So you didn’t tell your insurance company that you drive for Uber or Lyft when you took out the policy? Get ready for a denial. Nothing is covered. Your policy is voided. It’s as if it never existed.

In my opinion is that it’s an underhanded way  of denying claims instead of paying them. It is usually the lower-tier insurance companies that act this way. They will literally try to void your policy for any reason they can rather than paying thousands of dollars to pay your claims.

However, many times it is the insurance agent who fills out  the  insurance company’s initial policy application. This is particularly  true when it comes to immigrants, poor people, and others who do not have the best reading skills. Sometimes the insurance agent, claims adjuster, or underwriter do themselves not understand questions the these applications ask. If the insurance company representatives do not understand their own applications, then how are common  citizens expected to do so?

Here is how to avoid the most common void ab initio traps:

  • List everybody  who lives in your household. It does not matter that they have their own insurance.  It does not matter if they will never drive your car.List them anyway. You can exclude those people from your policy, but they can never drive your car, even in an emergency. You can also list some people as what are called “permissive drivers” if they drive your car on a frequent basis.
  • Tell your insurance company if somebody moves in with you too. You can add or exclude them from your policy. You can’t ever let an excluded person drive you car, though, because that will result in a denial or reduction of coverage.
  • Make sure that your  insurance company knows exactly where you live. I am frequently surprised when my clients do not update their  insurance companies about their addresses. An insurance company will Void ab Initio your policy in a heartbeat when you move to a higher risk area, and there is no way for you to tell if you live in a higher risk area. This is called “garaging.”
  • You must tell your insurance company if you drive or start driving for Uber or Lyft (even part-time), deliver  food  or people for money, or otherwise use your car for any business other than driving to and from work.
  • Please tell your insurance company about all crashes that you have been in. One favorite tactic is for your insurance company to run a report on you after somebody makes a claim in order to say they would not have issued a policy to you had they known about your loss history.

Void ab initio is a tool that insurance companies often use in order to deny claims that they should have paid. Do not give the insurance company any ammunition to claim that it would not have written  your policy if it had known about some circumstance that you do not think is important.

It’s all important.

The insurance company denying your claim is bad enough, but it gets even worse, because the State of Florida can suspend your license because you got into a crash and did not have insurance—even though you did. How unfair is that? Yet it happens frequently in Florida.

Avoid a void ab initio problem by following my advice.

Kindest regards,

Christopher R Dillingham II, Esquire

What No-Fault Means in Florida

Florida is what is called a “No Fault State.”
What that means is you must use your own Personal Injury Protection (“PIP”) if you are involved in a automobile crash. It has absolutely nothing to do with who is at-fault.
You must go through your own PIP coverage first no matter who is at fault in a crash. Florida law also makes PIP coverage “primary,” and that means that a hospital or doctor must bill your PIP insurance carrier first. After that, your personal health care coverage, Medicaid coverage, or Medicare coverage will probably pay for whatever PIP does not cover, but you must bill PIP first.
Here is why this is important: I just spent the better part of an hour trying to sort out a client’s case because she did not give her PIP coverage to the hospital or any of her doctors. That would have taken her one minute. Instead, she gave them her Medicare coverage information.
This simple mistake will cause other issues with her coverage somewhere down the line because Medicare, in particular, almost always complicates issues. Additionally, my client’s PIP carrier is known to be difficult when bills are submitted late even though the bills are for the proper date of service.
So why should you care about the additional work that your attorney must do? Because this is going to slow up how soon my client eventually gets her money. Until I can sort out all the Medicare,hospital, and doctors liens, I cannot pay anyone.
I am also not working on anyone’s case when I am on the phone chatting with someone’s billing department and trying to convince them to put my client’s PIP information into their computer.
Think of it as bad customer service on steroids.
Because my client did not take a minute to hand her automobile insurance card over to her doctors and instead used Medicare for her initial treatment, her settlement will be delayed by probably up to sixty days.
I have absolutely no control over how quickly these various healthcare providers, Medicare, or even her own insurance company will work to resolve these issues. They simply have no vested interest in getting anything done quickly because they have already been paid.
Please do yourself a favor and give your medical providers all your insurance information if you are in a car crash, but most importantly, give them your PIP carrier’s information first.
It will save your attorney a lot of wasted time that he could be spending on your case, and you will get your money a lot quicker.
Kindest regards,
Attorney Dillingham

Pure Comparative Negligence

The above picture is of a question that I answered on Avvo.com. The person who asked the question obviously did not understand how liability works in Florida.

People often believe that who gets the ticket in a crash matters. It does not. Police officers do not determine liability in the state of Florida. The only thing a police officer tries to determine—and judges do not always agree with those police officers—is whether or not a driver violated a state statute.

Most police officers have no idea that Florida is what is called a “pure comparative negligence state.”

What that means is that you can only recover the amount of damages for which you are not at fault in a crash. Rarely are crashes 100% the fault of one driver or the other. Drivers can often brake quicker, drive slower, react sooner, and stop more swiftly whenever a collision is about to occur. Even rear end collisions only have what is called a “rebuttable presumption of liability.” That means, contrary to the public’s perception, that the person who rear ends another person is not always 100% at-fault in a crash.

So how does comparative negligence work? The easiest example is to use 2 drivers who both have $1 worth of damages. Let us say Driver A is 75% at fault. Driver B is 25% at fault.

Driver A can collect $.25 worth of his $1 in damages.

Driver B can collect $.75 worth of her $1 in damages.

So who decides who was negligent in a crash? Well, in pre-suit cases, claims adjusters do that initially. If claims adjusters do not agree, then they will often use what is called  an arbitration panel to decide who has what amount of comparative negligence. The arbitration panel, though, is made up of claims adjusters, and claims adjusters are notoriously conservative.

That is where I come in. My job is to advocate for my client in a personal injury case. I do that even in pre-suit cases. Of course, if I have to file a lawsuit in a personal injury case, then I argue my client’s case to a jury, and the jury decides  who has what amount of comparative negligence.

Claims adjusters and juries look at many things when trying to decide comparative negligence. They may examine the points of impact, skid-marks, position of the vehicles within an intersection (in the above case), the amount of crush damage, and the amount of reaction time both drivers had before the collision occurred. In some cases, traffic light sequencing comes into play, and a jury may even consider the weather conditions that could affect how one should drive such as in the rain.

It is a complicated process, but one thing that claims adjusters and juries cannot consider is who received a traffic ticket. That is because traffic tickets are not admissible in court as evidence. Generally speaking, the police officer is not going to see a crash occur, and the police officer is merely guessing at who violated a state statute. Even if I were to subpoena a police officer to testify at trial, all the police officer could testify about is what he saw when he got to the scene. That is it.

This is why I tell my clients I do not care if they received a traffic ticket. Many attorneys will not accept a case if the client received a traffic ticket, but I do not care. What I care about are the injuries my client has and the available policy limits the other driver and my client have at the time of the crash.

Here is why I do not think who received a traffic citation is important: How much is 1% of the human life worth? How about 1% of a broken arm? 1% of the missing eye?

One percent of an injury could be worth far more than the other person’s bodily injury liability limits or your uninsured motorist limits. If the other driver has very low policy limits, and my client has sustained a severe injury or died, then even if my client is 99% at-fault for the collision, then my client deserves 1% of her damages. One percent of a severe injury is often worth the full amount of the other side’s bodily injury policy limits.

I believe everybody is entitled to recover their compensatable damages.

The other issue is that claims adjusters are often wrong about the positions they take in regard to liability, and when they become so stubborn that I must file a lawsuit, then my experiences that that position can change, and  many times, it changes in my client’s favor. I have had claims adjusters swear up and down that they were not going to pay me any more than they were already offering me, and when I filed a lawsuit, suddenly everything changes.

Does that always happen? Of course not. But it has happened often enough that I believe in the awesome power of a lawsuit to persuade an insurance company to do the right thing.

If you have any questions about Florida’s pure comparative negligence law, I invite you to contact me.


Kindest regards,

Attorney Dillingham