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#1
02-10-2007, 10:22 AM
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Auto insurers play hardball in minor-crash claims
http://www.cnn.com/2007/US/02/09/ins...all/index.html
By Drew Griffin and Kathleen Johnston CNN ATLANTA, Georgia (CNN) -- If you are injured in a minor car crash, chances are good that you will be in the fight of your life to get the insurance company to pay all the medical costs you incur -- even if the accident was no fault of your own. That's what CNN discovered in an 18-month investigation into minor-impact soft-tissue injury crashes around the country. Those are accidents in which there is little damage to the vehicle and the injuries to people are not easy to see by the naked eye or conventional medical tools like X-rays. Since the mid-1990s, most of the major insurance companies -- led by the two largest, Allstate and State Farm -- have adopted a tough take-it-or-leave-it strategy when dealing with such cases. The result has been billions in profits for insurance companies and little, if anything, for the public, according to University of Nevada insurance law professor Jeff Stempel. "We can see that policyholders individually are getting hurt by being dragged through the court on fender-bender claims, and yet we don't see any collateral benefit in the form of reduced premiums even for the other policyholders," Stempel said. "So I think now we can say to continue this kind of program is in my view institutionalized bad faith." If you have never heard of the strategy, it's because insurance companies don't want you to know that they are paying out less and less for minor crashes even while their profits soar and your premiums continue to rise. But after a review of more than 6,000 company documents and court records, interviews with a dozen people nationwide, including former company insiders, and conversations with accident victims, the picture is clear: If you challenge the offer by some insurance companies you will be left with no option but to go to court, where you will be dragged through the wringer. Expensive, time-consuming In an affidavit in a New Mexico case where Allstate is being sued, one of the company's former attorneys said the strategy is to make fighting the company "so expensive and so time-consuming that lawyers would start refusing to help clients." Shannon Kmatz, a police officer and former Allstate claims agent, said company employees were encouraged to get rid of claims quickly and cheaply and even offered accident victims as little as $50, telling them to take it or leave it. Both Roxanne Martinez of Santa Fe, New Mexico, and Ann Taylor of West Lafayette, Indiana, saw the practice firsthand. Martinez suffered neck and back injuries when she was sideswiped by a driver insured by Allstate. After three years, the company finally offered her $15,000 -- a little more than half of what she needed for lost wages and medical bills. She went to court, and four years after the accident a jury awarded her $167,000 plus interest. "It's kind of hard when you are thinking they are going to leave you broke. ... That was very stressful," she said. Taylor was not as fortunate when her case went to trial. The Indiana nurse was rear-ended by a State Farm employee driving a State Farm car. Damage to her car was minimal but she suffered herniated disc and muscle tears. Taylor racked up medical bills and lost wages amounting to about $15,000. The company offered her $2,000. "I was just very insulted," she said. She sued, but three years later a jury came back with a judgment for her of only $1,500. The jury didn't believe she could be hurt in an accident in which the vehicle had barely a dent. Three jurors told CNN photos of the two cars involved in the accident -- enlarged and prominently displayed by the defense -- played a huge role in their decision. And one said they assumed Taylor had already been compensated by the insurance company and was just trying to get more money. Profitable strategy The cases, CNN found, illustrate a carefully developed strategy to make the victims look like they are trying to defraud the insurers. But documents CNN obtained indicate profit, not fraud, is the reason companies decided to play hardball in small accidents. For Allstate and State Farm, according to documents obtained by CNN, the strategy was developed in the mid-1990s with the assistance of consulting giant McKinsey & Co. Looking for a way to boost profits, McKinsey focused on soft-tissue injuries incurred in minor crashes. While the McKinsey documents -- numbered in the thousands -- are under seal in courts around the country, CNN saw several of them during a court hearing in Lexington, Kentucky. Playing off Allstate's signature slogan, one document recommends the insurer put boxing gloves on its "good hands" for those who insist on going to court. The strategy, according to former Allstate and State Farm employee Jim Mathis, relies on the three D's -- denying a claim, delaying settlement of the claim and defending against the claim in court. "The profits are good, and as long as the community, the public allows this to occur, the insurance companies will get richer and people ... will not get a fair and reasonable settlement," Mathis said. Both Allstate and State Farm declined requests for interviews. In an e-mail, Allstate wrote it did not believe it would "have any real opportunity of being successful in getting you (CNN) to do a balanced report." State Farm wrote: "We take customer service seriously and seek to pay what we owe, promptly, courteously and efficiently, and we handle each claim on its own merits." The company also said, "Any attempt to generalize that State Farm adopted consultant recommendations as other insurers is just plain wrong." A company spokesman sent an additional e-mail, saying that the company did work with McKinsey to improve claims handling but State Farm stopped using the McKinsey program in 1999. Robert Hartwig, president of the Insurance Information Institute, told CNN insurers do not have a strategy of blanket denial of claims. He also said strategies to limit expenditures on minor-impact crashes are needed to fight fraud. Hartwig specifically singled out lawyers who he claims make a living on car accident victims, saying those lawyers are upset because "the gravy train is over." 
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#3
02-10-2007, 11:03 AM
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 Last edited by gldstwmn; 02-10-2007 at 01:27 PM..
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#4
02-10-2007, 12:28 PM
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Oh, god that's crazy! My insurer is a company called Infinity. I've never had to file a claim, so I have no idea what that would be like. But I do only pay $85 a month for full coverage. Progressive was charging me $245 a month, so I said **** that ****. That's almost as much as my car note.
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#5
02-10-2007, 01:11 PM
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good lord Chris. I wish you were here, I know someone that works for the largest personal injury firm here and they usually get 3 times meds for any soft tissue damage. they have "special" doctors they send you to and they run up the bills and then arrange for him to cut his costs so that you are able to get more money in your pocket.
I'm lucky to have lots of contacts that keep me informed and protected should something like this happen.
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#6
02-10-2007, 01:19 PM
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#7
02-10-2007, 01:21 PM
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#8
02-10-2007, 04:20 PM
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#9
02-10-2007, 04:56 PM
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"Dont do car accidents"?
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In early 2004 when Deb was finally cleared to return to work, she had an accident in our car. She swerved to avoid hitting a coyote and left the wet roadway and plowed through a barbwired fence and was lucky that the ground was wet. The car became bgged in mud since she wrecked on a steep incline cause otherwise she would have wrecked down that incline and been critically injured. After I arrived at the scene I noticed that Deb wasnt hurt, and the car only suffered superficial cosmetic damage (The car ran through the barbwire fence and under it, thus leaving the car with scrapes on the driver's side door and the roof.). After changing the flat front tires on the car, I drove Deb to the ER room to make sure her chest wound, where she had her sternum broken open to remove a cancerous mass was not damaged. The ER doctor & Deb's primary doctor asked what happened and then proceeded to check her chest wound, which was fine, but sore. We reported the accident to our insurance company, who said unless the damage to the car was extensive it wouldnt be worth the effort to file a claim, since we would only get about $250 back. So we decided to not file the claim on the car. Luckily the insurance company did pay for the ER trip. My older brother, when he was a resident of Tulsa, was involved in 2 separate car accidents that were not his fault (Including one accident which the person at fault was in the US illegally and this person did not have a driver's license). Both time the drivers did not have any insurance, so when my brother filed his claim he got basically the short end of the deal. He basically had to ingest the loss to his automobiles and pay for any minor injury that he had. I remember a couple years ago the local NBC affiliate ran a story on car insurance, and as shocking as it is only about 30% of rural Oklahomans have car insurance even though it is compulsary in this state for all drivers to carry at least liability insurance. So when we take a trip nearby we worry about the other drivers on the road. Call it ironic, but Oklahoma's former insurance commissioner Carroll Fisher (D) recently went to prison for fraud charges, among other charges, from illegal activities he participated in while in office. Seems the insurance companies he was to be overseeing to make sure they do not screw the consumer were lining his pockets under the table.
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#10
02-11-2007, 01:55 PM
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^^^
it's actually fairly common, at least here. because of the lawsuits that may occur. that's why PI attorneys have a set of doctors that they'll send you to. as they have relations with these doctors, it's easier to get records and reduce the bills so that everyone gets more money in settlement
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#11
02-11-2007, 02:00 PM
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__________________
 save the cheerleader - save the world
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#12
02-11-2007, 02:09 PM
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 ok, just one. you're totally right. the personal injury world, like the ones that sustain a firm, is a joke. not the ones that matter...but the little soft tissue or minor things...
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#13
02-11-2007, 02:12 PM
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#14
02-11-2007, 02:13 PM
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#15
02-11-2007, 02:56 PM
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I'll trade you...
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__________________
"To acknowledge death is to accept freedom and responsibility."
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