Accidental tourists: Lew Cady's car after the crash.
Accidental tourists: Lew Cady's car after the crash.

The Big-Bang Theory

Just before 1 p.m. on Thursday, September 23, Arlyn Shapiro was at the intersection of Colorado Boulevard and Exposition Street, preparing to walk across Colorado.

Heading south back to work and stopped at the crosswalk was Natalie Madrigal, behind the wheel of her 1962 Pritschenwagen, a restored VW truck that this summer had won Best of Show at the fourteenth annual Palo Duro Canyon Cruise sponsored by Top of Texas Volkswagens.

Stopped behind her was Lew Cady, at the wheel of a much more mundane 1998 Toyota Avalon. He was admiring the VW and wishing it would turn right on red so he could do the same, when...

Blam! A Chevy pickup slammed into the Toyota, which slammed into the VW, which slammed into the crosswalk and into Shapiro.

"I remember his face right up against the windshield," says Madrigal, "and then he was under my vehicle."

Shapiro emerged, bruised but alive, and they congregated by the side of the road, waiting for the police. A good Samaritan pulled up, parked her car and ran over, saying she'd seen the whole thing, that the Chevy pickup had been going erratically, like its driver was drunk, and "he'd been up on the curb and everything." The he turned out to be a she, her hair tucked under a baseball cap. She sat in the truck, staring, while two officers talked to the witness and took down insurance information: The 1998 Chevy truck that had set the mess in motion belonged to Paul Sand, boyfriend of the driver, and was insured by State Farm. Then the Chevy's driver and Shapiro shared an ambulance ride to the hospital, the traffic cops arrived, and Cady and Madrigal sat in the backseat of Officer W.J. Moore's car as he wrote his report: "Vehicle #1 traveling south in the right through lane of S.bound S. Colorado Blvd. struck with her front the rear of Vehicle #2 (Cady) who was stopped. Vehicle #2 was knocked forward and struck with his front the rear of Vehicle #3 (Madrigal) who had been stopped. Vehicle #3 was knocked forward into the crosswalk and struck with her front Pedestrian #4 (Shapiro) who was crossing Colorado Blvd. in the crosswalk. Driver #2 stated: I got knocked into the car in front of me. Driver #3 stated: I got knocked into the pedestrian. Pedestrian stated: I got knocked down onto the ground."

It seemed so straightforward. But Cady and Madrigal were about to get a real crash course on how the insurance industry can run you over, leaving skid marks on your soul and your bank accounts. And the hits just keep on coming.

After the accident, Madrigal was shaking, too stunned from her almost-fatal encounter with Shapiro to realize that she was hurting, too. She'd called her boss, who stopped by to see if she was okay. And then Mike Rich, her boyfriend and a VW restoration expert, arrived, took one look at the truck and knew it had to be towed.

Cady, a notoriously hardheaded creative type, had hit his car visor so hard that it had broken off and fallen into his lap. But he figured there was nothing physically wrong that a few beers (his trunk now held eleven broken bottles and one intact beer, along with the license plate of the Chevy) couldn't cure. And although his car's condition was much more depressing -- the body shop's current estimate is $13,761.63 on a car that blue-books for $26,000 -- he figured that, too, would be made right. The Chevy was insured by State Farm, after all.

But a week later, claims adjusters informed the other drivers that State Farm wouldn't be covering them. Not Cady, who'd been hit by the Chevy. Not Madrigal, who'd been hit by Cady, who'd been hit by the Chevy. And not Shapiro, who'd been hit by Madrigal, who'd been hit by Cady, who'd been hit by the Chevy. Their own insurance companies would have to pay up.

State Farm had found a loophole big enough to drive a truck through. The driver was two months pregnant, and that had affected her diabetic condition, reportedly causing her to black out and drive into Cady's car. In a case of a "sudden medical emergency" such as this, the claims adjusters told a stunned Cady and Madrigal, State Farm wouldn't cover their costs. Because State Farm's driver wasn't negligent, adjusters claim.

If you are trying to sell a big-bang theory like this one, you would not want to pick Lew Cady or Natalie Madrigal as your marks. After hearing that State Farm wouldn't pay up and then thinking about how he'd not only be out his deductible (and eleven beers) but also driving a repaired car reduced in value, Cady started campaigning. He complained to State Farm and complained to his insurer, Allied Group, about State Farm. (Allied declines to discuss the case, but it can't be happy about its $13,000-plus tab, even if Cady does pick up the first $500.) And he stopped by the police department to drop off a request that the officer who'd been at the scene before Moore and interviewed the woman who'd witnessed "the erratic driving of the operator of the pickup truck" please contact him. "I desperately need the name of that witness," Cady wrote. He still does. In the meantime, he has a new mantra: "Insurance isn't."

Madrigal's in her own world of hurt. She had insurance through Titan (which couldn't even find anyone to refuse to talk about the case), but because her car was more than fifteen years old, Titan wouldn't sell her comp and collision coverage. There was another company in town that dealt with insurance on classic cars, but it was very costly and required that you not drive the cars much. And she dearly loved to drive that Pritschenwagen. "I felt like I was in a parade every day," she says. She and Rich found the decrepit old truck ("It had never been in an accident," says Rich. "That's important") in Texas, where they used to live, and then spent four years and over $11,000 making it better than new. "The interior was absolutely beautiful," says Madrigal, and just too good to save solely for the VW shows where Madrigal and Rich are regulars. "We're VW fanatics," she explains, and they have a living room full of VW trophies and magazines and memorabilia such as Madrigal's T-shirt -- "Old VWs don't leak, they just mark their territory" -- to prove it.

But this Pritschenwagen did leak, as was quickly evident from the oil draining out of the mangled engine onto Colorado. And even though the venerable VW's frame was made of steel rather than the newfangled fiberglass of Cady's Toyota, it twisted badly out of alignment. The driver's seat, which had only a lap belt, bent; Madrigal's head and body hit the cab on impact. "I could be paralyzed from a broken back," says Madrigal. Instead she suffers recurring aches and pains -- and nightmare visions of Shapiro's face. "You just don't run over pedestrians," she says simply.

So far, Madrigal's insurance is covering Shapiro's medical bills as well as her own. But the rental-car agency is now dunning Madrigal for the loaner that State Farm arranged right after the accident, before the insurance company decided to dispense with such niceties. And while Rich patched together an old Bug so that Madrigal could get to work, nothing will bring the VW pickup back to show-worthy condition, much less the $18,000 that a collector might offer. And so it's sitting in the garage, a dent in front showing where it struck Shapiro, two holes in the dented back showing where Cady's license-plate bolts went through the metal. "I'm screwed and screwed and screwed on this deal," says Madrigal.

And she's also steaming mad over State Farm invoking the "sudden medical emergency" clause. So Madrigal took a week off work to investigate the situation, to help look for that witness, to explore her legal options. "You need to know where you stand," she says. "My heart's broken. My pocketbook's broken."

Adds Rich: "And the truck's broken."

But the system isn't broken, according to State Farm. Although the insurance giant -- State Farm accounts for a quarter of the insured vehicles in the state -- declines to address the specifics of the September 23 accident, since its client did not waive confidentiality, auto claims section manager Brian Arakaki can talk about the "sudden medical emergency" concept. In general terms, of course.

"The basic premise is that there has to be negligence and damages in order for our insured to be liable," he explains. "The doctrine of negligence is, you have to be at fault." Of course, the company investigates each situation on a case-by-case basis before making a determination of sudden medical emergency. If a driver ignored a doctor's warnings, for example, or is taking a medication that warns against getting behind the wheel, that could contribute to a determination of negligence. But in the case of completely unforeseen circumstances -- a seizure, a stroke -- State Farm doesn't feel there's negligence on the part of the insured. "If it's through no fault of his own, why should that person be held liable?" Arakaki asks. "Did he commit a negligent act by having a heart attack?"

But did Shapiro, Madrigal and Cady all commit negligent acts by putting themselves in harm's way? And shouldn't a diabetic woman be aware of potential risks during pregnancy?

That the company insuring a car that causes a crash might not cover that crash's damages surprises a lot of people.

Including the officer who filled out the accident report. After talking to Denver Health medical personnel in the ambulance and at the hospital, Moore had decided not to ticket the driver "because her pregnancy changed her diabetic condition," and he noted that on the report. But he didn't realize his notation might affect insurance coverage. When he learned that State Farm wouldn't cover the other drivers or the pedestrian, "he was kind of taken aback," says DPD spokesman Tony Lombard. "He always thought that for the last car in the line, insurance would cover it." And that would be Vehicle #1, which set this whole mess in motion.

Although a sudden medical emergency might save you from a ticket, it's not addressed by Colorado law, according to the state's Division of Insurance. The concept is completely the creation of the insurance companies. And in this state, like most others, they know who they must cover first.



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