Marian Pehowski is certainly not unworldly or unwise. The 85-year-old Madison resident has worked as a features writer (for the Milwaukee Journal), section editor (at the Green Bay Press-Gazette) and academic (at the UW-Milwaukee, Marquette and UW-Madison, among other places). She has a Ph.D. in comparative literature, and she's lived on every continent except Antarctica.
But what she's learned about the insurance industry over the last few weeks has thrown her for a loop.
"Honestly, the more I talk to people at insurance companies," she says, "the more convinced I am that insurance is an evil business."
After hearing her story, you might just agree.
For more than 40 years, Pehowski had the same insurer for her home and auto. In all that time of paying premiums, she recalls just two claims, for an auto mishap and some damage caused by a clogged drain.
But then her longtime agent died, and Pehowski did not like his replacement. So last June she switched insurers, to American Family.
Last September she reported the theft of some items; this January her home sustained damage due to an ice dam. She thought this was the kind of thing people had insurance for. It turns out it's the kind of thing that can cost people their insurance.
In a letter dated April 26, American Family informed Pehowski that it was canceling her coverage, effective June 29, due to her "claims frequency" - that is, the two abovementioned claims, for what it calculated was a total payout of $3,095.
"My hair stood right up," says Pehowski, noting that the letter went on to offer her continued coverage through American Family Brokerage at what she later learned was a significantly higher rate.
"That'll be the day," says Pehowski, who wants nothing more to do with American Family. That's in part because the letter also claimed, in passing, that "the interior of the dwelling" - the west-side Madison home where she's lived since 1980 - "is in poor condition." As any visitor can see, it's a beautiful home with no signs of distress, like cracks or water marks.
Pehowski is now having a hard time getting coverage through another insurer, in part because American Family reported her claims experience to a system known as CLUE, for Comprehensive Loss Underwriting Exchange.
And so, after decades of "making those companies prosperous" by paying for insurance she mostly didn't need, Pehowski is in a bind because she had the audacity to need the insurance she paid for. Moreover, her two claims were for things - a theft, ice damage - outside of her power to control. "It's not like I was smoking in bed."
Steve Whitmore, a spokesman for American Family, says the insurer is just following its standards: "When a new customer has multiple claims in their first year, we routinely and consistently non-renew that person's policy." He declines to say precisely how many claims are too many and concedes there's "some discretion." But two claims in less than a year is "a point at which we need to take a look at that customer and that policy."
That certainly makes sense - if Pehowski, say, kept blowing up her house while cooking crystal meth. But how exactly is it her fault that she had a minor theft and some ice damage? "I'm not going to get into her situation," says Whitmore.
Okay, but if CLUE lets insurers collude (insurance companies are exempt from antitrust laws) to deny affordable coverage to people based on bad luck, why can't American Family use the system to confirm that Pehowski has made only minimal claims over a lifetime of paying premiums? Whitmore: "Our consideration is our own experience with the customer."
Pehowski counters that "nothing in the policy says you can't have two claims" in a year without being terminated. "It's just unbelievable that they can get away with this."
They can. "State statutes permit companies to non-renew," says Eileen Mallow, assistant deputy with the state Office of the Commissioner of Insurance, so long as they give adequate notice and treat people consistently. They are not even required to spell this out in their policies.
But Mallow "would encourage anyone in this circumstance to file a complaint," so her agency can monitor the marketplace in Wisconsin for "recurring issues that we need to address more in-depth."
Loose lips sink rights
Some constitutional scholars say a 5-4 U.S. Supreme Court ruling last week fundamentally undermines the rights of criminal defendants being interrogated by police. But the man who trains police in Madison doesn't expect it to have much effect.
"I do not see this as a major erosion in defendants' rights," says Sgt. Mike Koval, "nor do I believe it puts the cops at a distinct advantage that they did not realize before."
The court ruled that a suspect being interrogated must affirmatively invoke his right to remain silent. Merely remaining silent when advised of this option does not mean police must stop asking questions intended to elicit incriminating statements.
Justice Sonia Sotomayor, in sharp dissent, wrote that the ruling "turns Miranda upside down," in that suspects must now speak to invoke their right to remain silent and "will be presumed to have waived their rights even if they have given no clear expression of their intent to do so."
But Koval, a lawyer by training, does not foresee significant change in how Madison police will conduct interrogations. "This ruling does provide a brighter line, operationally, but I will still urge a cautious approach" regarding the reading of rights to suspects in custody.
He notes that the court's latest ruling is similar to one in 1994 where it held that suspects must unambiguously invoke their right to an attorney. He notes brightly - as does many a criminal defense lawyer with a shake of the head - that no matter what suspects are told, most will waive their rights and incriminate themselves anyway.
"It's been estimated," says Koval, "that about 75% of suspects routinely waive their Miranda rights and talk to the police."
Another Madison atrocity
"I know sometimes you like to write about people who have been wronged by the city," remarks George Dreckmann of the Madison Streets Division, explaining his decision to call Watchdog's attention to an especially egregious transgression committed against an unsuspecting member of the public by the heartless metropolis that pays his salary.
This outrage recently came to Dreckmann's attention in an email forwarded from a UW employee who shall remain unnamed here. The employee was driving past "the red flags along the side of the road where the pedestrians use to cross the road." One of the flags carelessly hit the car's mirror as it passed, causing damage and distress. "I am not very happy."
Dreckmann, for one, grasps the horror of the situation: "What we have here is a car attacked by a pedestrian safety device."
Oh, the humanity!