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Assurant advertises short-term policies — with numerous exclusions and high deductibles — as gap coverage for people between jobs, using the slogan "because anything can happen." But those policies expire after six months, and Smith contacted Latham in August to urge her to replace the policy with a long-term one that would offer more benefits. Just how and when the application got done remains a matter of some dispute, but a policy was soon issued for Jennifer, Eden and Jackson Latham. (Alex Latham was excluded from the long-term policy, for reasons never clarified at trial.)

Yet it soon became apparent to the Shieldses that Assurant was refusing to process Jennifer's medical bills, submitted by providers in the wake of the crash. Shortly before Christmas, a letter arrived from Assurant underwriter Kathy Sellers, stating that a review of Jennifer's medical records had revealed several pertinent items she hadn't disclosed in her application, including a "uterine prolapse with surgical resolution discussed," incontinence, an ER visit for shortness of breath and some "abnormal" diagnostic tests. The letter stated that Latham had fifteen days to return a consent form, removing herself from coverage, or the company would revoke her children's health insurance, too.

The letter didn't make much of an impression on Jennifer at the time; still deep in the fog of her head injury, she was pleased at the idea that she'd be getting a check when the company refunded her premiums. But the doctors had urged her parents to push Jennifer a bit, get her involved in "adult" decisions about her care. On December 28, she called Sellers to demand an explanation. The call was recorded by Time.

No doubt: Jennifer Latham says that Assurant Health's decision to revoke her health coverage for alleged misrepresentation "insults who I am."
Mark Manger
No doubt: Jennifer Latham says that Assurant Health's decision to revoke her health coverage for alleged misrepresentation "insults who I am."
October 23, 2005: Fleeing police in a rented truck, parolee Shawn Todaro broadsided the Lathams' car a block from their house.
Mark Manger
October 23, 2005: Fleeing police in a rented truck, parolee Shawn Todaro broadsided the Lathams' car a block from their house.

"I have been turned down for being covered, and I don't understand why," she said.

Sellers started reading off the answers given on Latham's application.

"I didn't fill that out," Latham responded.

Sellers mentioned the uterine prolapse — a slipping or sagging of the uterus, a condition that's not uncommon among women who've had vaginal delivery of several children.

"It doesn't say anything about that in the application," Latham said. "My question to you is, is every single thing that ever happened to me in my life, I'm supposed to record?"

It was a short, awkward conversation, interrupted by howling kids and Jennifer shouting at someone, "Get away from that!" Sellers promised to send Latham a copy of her application.

The Shieldses showed the rescission letter to Marc Levy, the lawyer whom they and Alex's parents had hired to try to deal with auto insurance issues surrounding the accident. A veteran of insurance defense work, Levy was astounded. He calls Sellers's missive the "stupid, stupid, stupid letter," a reference to a fatally callous insurance document in John Grisham's The Rainmaker.

"I defend insurance companies for a living, and I was offended," he says. "Shocked, really, that any company would treat an insured that way. My clients don't do that."

As Levy saw it, the letter offered his client something akin to Sophie's Choice: Relinquish your contract or we'll cut off your kids, too. In Colorado, there are only two ways for a company like Time to legally rescind an insurance policy: Obtain a court order or the consent of your policyholder. This looked like an attempt to bully Latham into consent. And what were the stated reasons? An episode of incontinence? Shortness of breath? Were these conditions asked about on the application? Had she been diagnosed with some specific disorder? Even if she had, Colorado is an "intent" state, meaning that the company has to show the applicant intended to deceive the company rather than innocently omitted something.

A member of Levy's firm wrote back to Sellers, asking for more information and more time to respond, given the holiday and Latham's condition. A response was promptly received, stating that the company is "currently conducting a review based on your appeal."

A few days later, one of Latham's medical providers called Time to find out if the company was going to reimburse a $70,000 bill that had been submitted. That conversation was also recorded by the insurance company.

"The claim is here," Time's customer service rep said. "There is a pre-existing investigation that has been opened."

The rep hinted darkly about the patient's "undisclosed medical history." When the provider asked if the bill was going to be paid, the rep let her know just how seriously the company was considering Latham's appeal.

"It's not going to be paid," he snapped. "I can guarantee you that."


A New York native raised in Oklahoma, Marc Levy comes across as a born litigator, with an appetite for the contentiousness of the courtroom. But as Jennifer Latham's dispute with Time Insurance crept toward trial, her attorney recognized that the case was spiraling into a rarefied — and costly — level of conflict. Levy had never seen a bad-faith case he considered quite as blatant as this one, or an opponent more doggedly determined to deny any wrongdoing.

"I think there's a business model here," Levy says. "The insurance company knows that if they deny a hundred claims, 95 of those people are going to go away. They know that five of them might consult with a lawyer, and that two or three of them might get a lawyer to take their case. And they know they're going to make it very expensive and protracted for those people to pursue their case."

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