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County wants to help. State says whoa. (concl.)

Mon May 2nd, 2011 on     Insurance Claims,    

Our last two posts have talked about a situation outside of Florida involving a conflict between a county and a state insurance authority. The county tried to establish a fund to help defray the medical costs of the victims of an accident at a county park. The insurance authority put a stop to the plan. It’s not the kind of insurance authority we’re used to thinking about, though. This isn’t the regulatory body; this is the division of the government that writes the government’s policies for property insurance, auto insurance, business insurance and so forth.

The state¬†Insurance Reserve Fund’s denial is grounded in a state statute that limits government liability to $600,000. Almost 30 people were injured in the accident. Some had cuts and scrapes, and others had broken bones, head injuries and worse. The $600,000 is not the limit for each victim. It’s the limit for the entire accident.

The accident was in South Carolina, and it’s gotten a lot of attention in that state, because so many of the victims were children. State law is standing in the way of well-intentioned government officials lending a helping hand to 5- and 6-year-olds.

The only way the sympathetic officials can get around the problem is to change the statute. Some lawmakers have discussed amending the law so the cap would exclude medical expenses. The purpose of the cap is to protect the state from paying unlimited damages.

The state could waive the cap in this case, too. One family has already filed a lawsuit against the county, and the plaintiffs plan to argue that the cap should not apply in this case.

Outside of the information in the emails, though, no one from the government — including the IRF — has said anything about the matter.

One official did say, though, that he didn’t want anyone to think they’d been “sitting on their hands.” He added that he and his colleagues have been instructed not to say anything “to jeopardize our position.”

We’ll see what happens. In Florida, we’re used to the problems that come up when politics and insurance mix. Other states may not have our level of experience.

Source: Insurance Journal, “South Carolina Nixed Insurance for Train Victims Over Liability Fear,” 04/26/11

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