Saturday, March 19, 2011

Behind The Curtain: What Insurance Companies Are Doing To Dilute Or Deny Your Auto Accident Claim

“We’ll work with you on your claim. We just need some information first.” This is the standard pitch an insurance adjuster will make to someone making a car accident personal injury claim.
How do I know this? Because many eventually become what I call “insurance company refugees”—folks who accepted in good faith the insurance company’s offer of “fairness,” only to become so frustrated that they were forced to pick up the phone and call me.

Here’s what may be happening behind the curtain while the injured person waits patiently for the insurance company to do the right thing.

1.Scouring Your Credit History

When you give the at fault driver’s insurance company your Social Security Number, it allows them to tap into many databases, including one known as CLUE. This is an insurace industry database that determines your insurance profile or "risk." If you have ever reported or file a previous insurance claim, it is probably in this database. Furthermore, if the insurace company is so inclined, they can search your credit history. What does that have to do with your injury claim? Nothing. But if your credit history is poor because you have heavy debt, it might make you vulnerable to a lesser offer.

2.Intercompany Arbitration

If your auto insurance company pays your auto accident bills, they will typically have a right of reimbursement from the at fault driver’s insurance company, known as “subrogation.” But your insurance company might secretly make a reimbursement claim against the at fault driver’s company by filing for “intercompany arbitration.” This is a private, voluntary dispute resolution mechanism set up amongst insurance companies. Unbeknownst to you, the at fault insurer may reimburse your insurance company, then turn around and argue that your injuries, and your medical bills, were not caused by the accident! A classic example of insurance companies wanting to “have their cake and eat it too.”

3.The Medical Audit

After the passage of weeks or months, the same company that has promised to “work with you” may have already sent your medical records and medical bills for a medical audit. This means that some medical group or physician (whom the insurance company hires on a regular basis) is reviewing your records to determine whether (a) your injuries were not caused by the collision; or (b) your medical treatment was excessive for your claimed injuries. If this review is favorable to the insurance company, you will be notified, about the same time you receive a low ball offer on your claim. On the rare occasion the review comes back in your favor, they will not share this information with you.

Remember these things the next time you’re bombarded with all countless insurance TV commercials touting all the fancy slogans and come ons…

Sunday, March 6, 2011

Insurance Companies Using Technicalities To Avoid Paying Auto Accident Claims

"Frivolous lawsuits," allow me to introduce you to insurance company "frivolous defenses." A recent Ohio case shows the tactics insurance companies will employ to avoid paying Ohio auto accident claims due to specious "technicalities."

Quick facts: Driver is insured with "Nationwide Mutual Insurance Company." He is injured in a crash and brings a lawsuit against "Nationwide Insurance Company." As is required by Ohio law, his attorney attaches a copy of the "Nationwide Mutual Insurance Company" policy to his complaint.

Nationwide moves to dismiss the lawsuit, claiming that the plaintiff/injured party sued the wrong party--"Nationwide Insurance Company"--instead of the proper party, "Nationwide MUTUAL Insurance Company." The trial judge dismisses the case, buying into this technical argument. Thankfully, The Court Of Appeals reinstated the lawsuit, reasoning that Nationwide was on notice of the lawsuit and was not prejudiced by plaintiff's failure to include the "Mutual" description in the complaint.

The Court Of Appeals recognized that Nationwide's legal manuverings were much to do about nothing, and now the injured party will at least get his day in court. Not a very sexy opinion that's likely to make front page news, but it illustrates the efforts insurance companies will undertake to avoid paying on a claim. And, keep in mind, this was the injured party's OWN insurance company!!!

This case proves there is another side of the coin to the whole "frivolous lawsuit" debate. It's at least worthy of mention the next time you hear someone bemoaning the infamous "hot coffee" case.

Friday, March 4, 2011

The "Mrs. Jefferson" Solution To The Tort Reform Movement

I wish I had gotten her name. For the purposes of this post I'll call her "Mrs. Jefferson." She came up to me after a presentation I gave a few years ago on our civil justice system in Ohio. Actually, it was a debate.

On the panel was a local legislator, a physician, and me. They were advocating for various medical tort reforms, particularly the hard, one size fits all government imposed limits on what malpractice victims can recover in lawsuits. From my lonely perch at the end of the table, I explained that tort reform was a bad idea that really punishes innocent victims with legitimate cases of injury, and would do nothing to bring down health care costs. I argued that the only group that would benefit from arbitrary caps on damages would be the malpractice insurance companies.

It was a lively debate and it dovetailed into a discussion of frivolous lawsuits and what should be done about them. Although I probably lost the debate, like Rocky, I went down swinging...

Anyway, as it ended and I was packing my papers into my briefcase, Mrs. Jefferson approached me. She shook my hand, thanked me for talking to their group, and had this observation:

You know, it sounds to me like they need to crack down on those goofball lawsuits and leave the legitimate ones alone, because it might just be me sittin' in the wheelchair someday due to someone else's mistake.

She said more in one sentence than we did in an hour's debate equipped with talking points and fancy charts. And she's right: why punish those seriously harmed due to a preventable medical mistake with the socialistic notion that those very same individuals need to sacrifice their recovery rights for the good of the whole?

Mrs. Jefferson got it. Unfortunately, most people learn what a bum deal tort reform is for them (and individual constitutional rights) only after they're on the receiving end of a life altering, preventable mistake. It's like what Roy Rogers once said: "You never know how sweet the water is till the well runs dry." And, believe me folks, the well is running dry on your legal rights in Ohio and all over the U.S.

Tuesday, March 1, 2011

Hey Allstate, The Real Mayhem Is (Buried) In Your Auto Policy

We've all seen Allstate's "Mayhem" commercials. Pretty clever and somewhat humerous. The message is that mayhem lurks everywhere and an Allstate policy will sweep in and protect you. Here's the problem: Ohio personal injury lawyers like me have actually had occasion to read theirs and dozens of other auto policies (about as exciting as a dental cleaning, but it comes with the territory--it's what we do).

So let's test the accuracy of their marketing premise in the real world, borrowing from their theme.

I am an Allstate auto policy. You probably purchased me after seeing all of our clever commercials (no comment on how much we spend on advertising every year). You probably called an agent, who gave you a quote, asked you to fill out some paperwork, told you that you bought a "full coverage" policy, and I arrived in the mail weeks later. You stuffed me in the drawer with all your other "important papers."

But I am full of some mayhem of my own while I am sleeping in your drawer. Call it "fine print" mayhem. Here's what my fine print says: there's no coverage under my policy for "bodily injury to any person related to an insured person by blood, marriage, or adoption and residing in that person's household."

What does this mean? If you allow your son to drive your Allstate insured vehicle while you're a passenger and he wrecks the car, seriously injuring you, there's no coverage for his driving negligence, your lost wages, and your permanent injuries.

Basically it means this: if one family member wrecks the Allstate insured car and injures other family members, all Allstate "insureds," there is no coverage for anything but medical bills up to the limits of your Allstate "medical payments" coverage ( usually $5,000,assuming you bought medical payments coverage). So, if your family's medical bills are $200,000 take our $5,000 "med pay" coverage and multiply it by the number of family members with medical bills of $5,000 or greater and that's all we owe you. My little exclusion means no compensation for the rest of your family's losses.

Now here's what all the "Mayhem" commercials won't tell you. Many Ohio insurance companies, like Nationwide, Grange, Motorists, and Central Mutual don't have this exclusion! If you had one of those policies, all of your injured family's losses would be covered either under (1) the Liability or (2) the Uninsured Motorists' portion of the policy.

Mayhem can be sneaky, can't it?

To learn more about fine print exclusions in your policy before you ever need to use your insurance policy, visit our website
or our blog home page and order our FREE book: "Fully Exposed: How Ohio Insurance Companies Are Stripping Your Auto Policy."