| Are Domestic Violence Victims also the Victims of the
Insurance Companies? Linda J. Noll
University of Dayton
Third Year Law Student
Domestic Violence is an issue that many women have faced in silence. It
has only been within the last thirty years that the problem of domestic
violence has been acknowledged. Finally, society has decided to take a
stand against domestic violence with the creation of domestic violence
advocates and domestic violence shelters to create a way out for many
women. With this new awareness of the domestic violence issue, health care
provides have recognized the signs and in some states are required to
report suspicious injuries that are likely results of domestic violence.
This new awareness of the domestic violence problem has also created a
new problem. This new problem stems from the insurance companies using the
domestic violence as a condition in which it may restrict coverage, deny
coverage, or increase the rates for the victims of domestic violence. From
the health insurance companies’ perspective, the domestic violence victim
has a potentially increased use of medical facilities because of the
assaults from their abuser. The insurance companies view the increased use
as the increased cost in providing for that individual which would be an
increased cost to the consumer or a reduction in coverage as they do with
many other conditions.
The insurance companies are in a business. This business is to take a
calculated risk by providing payments for medical expenses as they arise
in return for a monthly premium. The underlying policy is to charge rates
in accordance with the risk involved, and ultimately to make a profitable
investment. By using characteristics involved with domestic violence, the
insurance companies are following their policies associated with the risk
analysis of providing coverage to an individual.
Life insurance companies use a similar rationale for increased rates or
denial of life insurance coverage. The assaults from the domestic violence
abuser have an increased likelihood of resulting in death than someone who
is not in an abusive relationship. This increased likelihood of death in
comparison with others of similar characteristics increases the risk of
premature payment of the policy. Another issue that has been raised as a
concern for insurance policies is the potential of the abuser being the
owner or beneficiary of the life insurance policy. However, state
intestacy statutes provide protection for the victim’s estate by
prohibiting the person who committed the wrongful termination of the
victim’s life from inheriting from the victim.
Currently, forty-one states have enacted legislation with varying
degrees of protection for victims of domestic violence from the
discriminatory actions taken by insurance companies. Some state
legislatures have enacting legislation that restricts the insurance
companies’ abilities to use the classification of domestic violence as a
restriction for coverage. However, the medical history of frequent visits
to the emergency room may be used in determining the risks involved in
insuring the individual. Other states have enacted stricter legislation
that prohibits an insurance company from restricting coverage for any
restriction stemming from the classification, use of medical history in
which the company knew or should have known as incidents of domestic
violence, or attempting to restrict coverage as a pre-existing condition
for continued care in relation to past domestic violence assaults.
The following articles will assist in research concerning the current
legislation of insurance companies in connection with limiting, denying,
or increased rates stemming from domestic violence. Also, I have included
a few general online sites for domestic violence which are updated
periodically. These sights may be of further assistance by searching the
updated material.
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Lewis, Tamar. "Seeking a Public Health Solution for a Problem That
Starts at Home"’ The New York Times; June 22, 1997, 19.
This newspaper article presents some background and statistical
information concerning domestic violence. This information is necessary to
understand the extent to which domestic violence has plagued our society.
The shocking statistics are that nearly 30% of all homicides of women are
committed by either the husband or boyfriend. The epidemic is costing
approximately $857,300,000.00 per year in order to provide health coverage
for the victims. When evaluating the approximate cost of health care
coverage, the figure does not take into consideration all the other
victims that did not seek the appropriate medical care needed.
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Rebecca Brannan. INSURANCE: Unfair Trade Practices: Prohibit
Discrimination Against Victims of Family Violence in Insurance Coverage,
Rates, and Claims, 17 Georgia State University Law Review 220 (2000).
This is a ten-page article which examines the Georgia statute
pertaining to the insurance companies abilities to use domestic violence
as a discriminating factor in issuing insurance policies. The article
articulates the magnitude of the problem that victims of domestic violence
face through the examples of discrimination in health, life, property, and
automobile insurance. One example that I found most appalling is about a
Georgia woman who was denied reinstatement of homeowner’s and automobile
insurance, because her husband cancelled them the day before the assault;
and even though he was sentenced to twenty years in prison, the insurance
company refused coverage because she was now classified as a high-risk.
The Georgia statute is comprehensive in its coverage protecting the
domestic violence victims. This legislation does not limit the insurance
company’s abilities to using a classification of being a domestic violence
victim as the limiting factor. Instead, the legislators looked to all the
potential loopholes that the insurance company may be able to limit
coverage to a victim and has adequately protected the interest of the
domestic violence victims. This statute is a model statute for other
states to look for while drafting or changing their own legislation to
protect the victims of domestic violence.
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Arizona Revised Statute § 20-448 (2000)
The statute provides that a life insurance company cannot limit, deny,
refuse renewal of the policy, cancel, or charge different rates for life
insurance for victims of domestic violence. However, an insurance company
may restrict coverage when the perpetrator of domestic violence either
owns or is the beneficiary of the life insurance policy on the victim’s
life and the insurance company has reason to know or reasonable grounds to
suspect the perpetrator of domestic violence has a record for domestic
violence.
The criticism of this statute arises under the restriction that the
known or reasonably suspected perpetrator of domestic violence cannot own
the life insurance policy on the victim. Many of the cases of domestic
violence are between spouses. This creates the potential of eliminating
life insurance for the victim of domestic violence merely because the
spouse owns the policy which may name children or other innocent parties
as beneficiaries. If the statute limits the perpetrator from being the
beneficiary, the victim and other innocent parties will be protected to a
greater extent. There are already laws in existence which do not allow an
individual’s murderer to benefit by way of inheritance from the victim’s
death. By not allowing the victim to have life insurance merely because
the perpetrator of domestic violence owns the policy does not protect the
rights of the victim. The victim may be further protected by restricting
the possible beneficiaries or by taking additional measures to invalidate
an inheritance to the perpetrator through more restrictive terms of the
life insurance policy.
__________________________________
California Insurance Code §676.9 (1998)
The statute provides that an insurance company cannot limit, deny,
refuse renewal of the policy, cancel, or charge different rates pertaining
to health insurance for victims of domestic violence. If the policy is
denied, or altered for a legitimate reason, then the victim of domestic
violence is irrelevant in denying or altering the policy. No insurance
company employee may ask questions pertaining to being a victim of
domestic violence.
The problem with this statute arises the health insurance company’s
inability to raise rates of an individual who is a victim of domestic
violence which is a higher risk than the initial evaluation. The insurance
company may attempt to raise the individual’s rates for a facially
legitimate reason with the underlying reason being the individual is a
victim of domestic violence.
___________________________
Hellman, Deborah S. "Is Actuarially Fair Insurance Pricing Actually
Fair?: A Case Study in Insuring Battered Women", 32 Harvard Civil Rights –
Civil Liberties Law Review 355, Summer 1997.
This fifty-three page law review article focused on the fairness to
victims of domestic violence in using actuary pricing for health
insurance. The article studies the different theories in why using the
domestic violence as a factor in the actuary pricing of health care for
the victims. However, this article only briefly mentioned how this applies
to the victims of domestic violence who leave the relationship, but are
still considered victims for pricing purposes or are still undergoing
treatment for a condition that arises from the past domestic violence
assaults.
One example used was comparing a victim of domestic violence to a
person with diabetes, and it further explored the matter as one of which
the burden involved for maintaining control over the situation. Throughout
the article, the author explored the possible reasons that the critics to
the insurance company’s use of domestic violence as a factor feel that the
victims should be protected. Included in the possible reasons are the
victim is not accountable due to the degree of burden involved with
leaving an intimate relationship, society’s failure to protect the victim
from the crime or by allowing the problem to grow because of the
unawareness of the problem. I agree that the reasons given are possible.
However, I believe many people have a knee-jerk reaction to hearing that
an insurance company would enact such policies upon individuals who are
already being abused and that much of the legislation is a reaction a
sense of injustice.
The author analyzed the different states’ legislation governing health
insurance for the victims of domestic violence. One area that I found
interesting was that the state legislation governing health insurance does
not apply to employers who are self-insured due to ERISA.
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Sheri A. Mullikin, A Cost Analysis Approach to Determining the
Reasonableness of Using Domestic Violence as an Insurance Classification,
25 Journal of Legislation 195 (1999).
This thirty-two page article examines the cost analysis of insurance
companies using domestic violence as a factor in determining rates for
domestic violence victim.
As noted in the article, insurance companies prefer the theory of a
"fair discrimination." With this, the insurance company does not
arbitrarily choose a group to discriminate against while determining
rates. Instead, the insurance company discriminates against all groups who
will be responsible for additional risks. The theory the insurance
companies use to determine rates is a cost analysis in which the risk of
providing resources has been calculated so that the company will be able
to profit from taking the risk.
The cost-benefit analysis is appropriate for determining insurance
rates in most circumstances. However, many of the arguments against the
cost-benefit analysis stems from a knee-jerk reaction to allowing the
insurance company to discriminate against the victim because they are
already classified in a protected class of individual under other state
laws which prohibit domestic violence assaults. In order to further
protect the victims of domestic violence without jeopardizing profits, the
insurance companies should be able to calculate the additional risk of
providing insurance for victims of domestic violence and perhaps spread
the cost across the board.
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State-by-State Report Cards on Health Care Laws and Domestic Violence
http://www.fvpf.org/statereport/states-all.html (Last visited on April 26,
2001).
This site provides a breakdown of each state concerning the current
status of legislation governing domestic violence issues. Included in the
listed material are the domestic violence insurance discrimination
legislation and domestic violence reporting legislation. This
comprehensive list quickly allows the individual to find if their state
has legislation governing the domestic violence issues and provides the
legislation without having to spend additional time to locate the
legislation.
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Janlori Goldman, JD, R. M. Hudson, MA, JD, Z. Hudson, et. All. Health
Privacy Principles for Protecting Victims of Domestic Violence, http://www.fvpf.org/health/privacy-principles.html
(2000).
This article demonstrates the way in which insurance companies were
able to attain and use the domestic violence from a person’s medical
records. It also explains some concerns that victims of domestic violence
have when the abuser provides their insurance and the victim have left the
situation. In many instances, the need for medical attention for the
victim or children after leaving will go untreated or they will not use
the health insurance they have because of the fear that the abuser may
find them and begin the cycle again.
One area of concern for victims of domestic violence is medical
documentation of the abuse. The article explains the importance of
documenting the abuse as being an intricate part of treatment which
includes being able to diagnose and understand the patients conditions as
a part of the abuse. However, the insurance companies have access to the
patient’s medical records. Without the legislation specifically protecting
the insured victim, the doctor-patient communication may be harmed in
order to protect the insurance.
General Online Resources
http://www.nowldef.org/html/policy/introtf.htm – NOW Legal Defense and
Education Fund – Violence Against Women – A searchable web site for up to
date issues concerning domestic violence.
http://www.fvpf.org - The Family Violence Prevention Fund – a
searchable web site dedicated to the prevention and education of domestic
violence.
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