For Brian Litwak, a West Los Angeles teacher-coordinator in the public schools, it ended happily. His auto insurance policy, canceled because his insurer discovered that he had diabetes, was reinstated.
For David Langenbacher, who runs the state Insurance Department's consumer hot line, it was a small triumph.
After getting Litwak's telephone complaint, Langenbacher had intervened successfully with Ohio Casualty Co. and, in return for a doctor's word that the problem was under control, had won its agreement to continue Litwak's policy.
For Ron French, Ohio Casualty's regional underwriting manager, who had settled the problem with Langenbacher despite "underwriting guidelines" against covering some diabetics, it seemed to be a good ending too.
"The big, bad insurance company isn't as bad as it seems," he said.
Amid all the controversies afflicting the world of Southern California auto insurance, Brian Litwak's story--notices of cancellation and reinstatement spanning four weeks in November--isn't a major one.
But it was important to Litwak, 50. Had he been forced to go out and buy another policy, his explorations indicated that it would have cost him double the price of the one he had--$2,800 instead of $1,400.
And it points up, too, some facts and trends that are becoming increasingly apparent in the Southland insurance market:
- The state Insurance Department, with its hot line staff of four, is playing a more assertive role in going to bat for consumers, at least those that have a good case and go to the trouble of complaining.
"We're sifting these calls and trying to determine those people we can help," Langenbacher said.
"We try to identify the cases that seem to us to have real merit. . . . Then we go to the companies. We try to calm their fears. . . . We go back to these underwriters with the facts designed to lead them to commit to write (insure) the risks."
- So-called "inspection companies" are playing an important role in researching policyholders and pointing out coverage problems to the insurance companies they work for.
In the Litwak case, it was D. E. McKinney Inc. of Reseda that put 19 questions to him on the telephone and, based on his answers, informed Ohio Casualty that he was a diabetic who took insulin daily.
"We don't do any canceling, the insurance company does," explained Al Landy, the McKinney manager, in an interview Tuesday. "We don't know what the underwriting instructions are. We simply submit reports to them, thousands a month."
- The underwriting guidelines under which insurance men like Ohio Casualty's French decide whether to sell, continue or cancel policies often are subject to elastic interpretation. They can be used to justify cancellations, but also reinstatements, depending on the judgment of the individual underwriters.
"Ohio Casualty does have an underwriting guideline that they will not write a diabetic," said the state Insurance Department's Langenbacher. "It's not a prohibition, but in some cases a guideline becomes interpreted as a prohibition."
Said French: "There are many stages of diabetes. Probably the most serious is someone who has to take insulin. . . . But this thing has been resolved, hopefully (with the doctor's letter), to the satisfaction of all."
French's supervisor, Ohio Casualty Vice President Bill White, said the company has no "blanket policy against diabetics, none whatsoever."
"The doctor's statement changed the situation," White said. "The insured's condition is such that he can still safely operate an automobile. In many cases it depends on the kind of information we have."
And so, Litwak's problem ended up being resolved because he had the determination to complain and pursue the matter, because Langenbacher was determined too, and because, in the end, Ohio Casualty was willing to change its stand.
"I wrote a letter thanking Mr. Langenbacher at the Department of Insurance," said Litwak. "He did all the things we should expect the department, like other government agencies, to do and have gotten into the habit of not expecting."