Report: Some Insurers 'Low-Balling' Auto Insurance
Claims for Bodily Injury
December 29, 2010
Some insurance companies that use computerized systems to process their claims are making unfair, "low-ball" claims offers to people injured in automobile accidents, according to a consumer advocacy group.
The Consumer Federation of America (CFA) is warning Americans that Colossus software and other similar programs used by insurers evaluate general damages for many bodily injury claims such as pain, suffering and anguish, but fail to estimate "special" damages such as past or future bills related to losses and reductions in wages or liability-related questions, or issues like the credibility of witnesses.
Advising consumers to protect themselves against underpayments, J. Robert Hunter, CFA director of insurance, said,
"Consumers should be very vigilant when dealing with automobile bodily injury claims generated by computer programs."
He said insurers can adjust their computer systems to generate claims' 'savings' without adequately examining the validity of each claim.
When adjusting a bodily injury claim, an adjuster typical sorts through medical records and determines which of the approximately 600 Colossus injury codes best reflect the bodily injuries sustained by the consumer, according to CFA.
Depending on the severity value accompanying the injury code and dollar value that has been assigned by the insurer for each severity value point, the software provides a dollar value range to the adjuster for general damages.
"Some insurers also can tune the programs so that the claims that are made are 'low-balled' to save costs, even if a higher offer may be justified for some consumers. Further, adjusters sometimes receive incentives for settling claims at or near the range stipulated by Colossus," CFA said.
Insurers that CFA says use Colossus include: AAA Mid=Atlantic, ACE INA, Allstate, American Family, American National, Atlantic Mutual, California State Auto, CAN, Grange, Great American, Hartford, HDI, Horace Mann, ICW, Motorists, Nationwide, Ohio Casualty, Safeco, State Auto, USAA, Utica, Westfield, White Mountain and Winterhur Swiss.
Insurers that use IQ, a similar software, include Allianz, Fireman's Fund and GEICO.
Insurers that use COA, a similar software, include Automobile Club of CA, Liberty Mutual and Progressive.
CFA is recommending consumers protect themselves from unjustifiably low claims' offers by:
• Find out if the offer is generated by a computerized system like "Colossus." Allstate is required to disclose this information, but disclosure is voluntary for other insurance companies.
• Ask to see the high and low offers generated by the system.
• Do not accept any offer less than one in the "high" end of the range.
• If the insurer does not agree to an offer at the high end of the range, consider filing a complaint with the state insurance commissioner or seeking legal help.
A copy of CFA's complete consumer alert is available at www.consumerfed.org/pdfs/Claims_Consumer_Alert_12-8.pdf.
Report: Some Insurers 'Low-Balling' Auto Insurance Claims for Bodily Injury http://www.insurancejournal.com/news/national/2010/12/29/116020.htm?...
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COLLISION PARTS
I was reading Body Shop Business this evening, yes while many other people are thinking about the shopping and gifts and getting over their food comma from Thanks giving dinner people in this industry continue on.
You see Collision repair is not something you leave behind at 5:00
Why it's important for some AM parts to be CAPA certified.
Video courtesy of CAPA.com
New OEM replacement parts
The article in question was discussing a study that was released in regards to the quality of the replacement parts to repair your vehicle after an accident, this particular study was about front bumper reinforcements.
This study showed that out of four parts tested each one differed from the other in weight, thickness, tinsel and yield strengths.
The parts supplier said "this proves equivalency has an acceptable range variance"
Also tested were various parts that were randomly chosen, OE parts from multiple lot numbers, years and manufactures, from production parts to current service parts and found there was a definite range in parts.
Material selection, the economy and the volatility of the metal market all play a factor in the end result.
Now this is not implying these parts are inferior in any way, I am just putting this out there to inform you, the consumer, that even when your vehicle is repaired with brand new OEM replacement parts there are sometimes differences in the parts put on your vehicle compared to what was on your vehicle prior to your accident even if it is a factory OEM part.
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Auto Safety - Size, Weight, Active Safety, Passive Safety, SUV Safety, Unsafe SUVs, deadly motor vehicles
Auto Safety - Size, Weight, Active Safety, Passive Safety, SUV Safety, Unsafe SUVs, deadly motor vehicles
Safety - is divided into three categories: the size and weight of a vehicle, passive safety features that help people stay alive and uninjured in a crash, and active safety features that help drivers avoid accidents
Larger, heavier cars with poor ratings may easily produce better results than smaller cars with good ratings. In addition to a car that crashes well (passive safety), you should look for a car that can avoid a crash altogether (active safety). Keep in mind that all of this testing was done with test dummies wearing seat belts and shoulder harnesses. Without them, a 15 mile per hour crash could prove fatal.
Size and Weight Matters - All cars must meet US Department Of Transportation standards for crash-worthiness. Larger and heavier cars, however, are usually safer in a collision than smaller ones. In relation to their numbers on the road, small cars account for more than twice as many deaths as large cars. If a heavier vehicle collides head-on with a lighter one, the lighter vehicle and its occupants will suffer substantially more damage.
Drivers under 25 experience a much higher percentage of traffic fatalities when compared to other drivers, so consider the safety of a large or mid-sized sedan for inexperienced drivers.
Large cars offer increased levels of comfort and roominess when compared to their smaller siblings, and today's fuel injected engines allow mid-sized, 6-cylinder automobiles to enjoy remarkably good gas mileage.
1997 US PASSENGER VEHICLE OCCUPANT DEATHS
Trucks and SUVs Kill - The following chart is from an IIHS News Release dated 2-10-98. The left-most column gives the weight class of the vehicles in the first column of each pair (that is, " cars," "pick-ups," and "SUVs"). Columns 1, 3, and 5 show the death rates (per million vehicles per year) for cars, pick-ups, and SUVs of different weights; columns 2, 4 and 6 show the death rates for the occupants of the other vehicle in the two-car collision.
Occupant death rates in two-vehicle crashes, 1990-95 model passenger vehicles versus other vehicles ( deaths per million vehicles per year)
Weight Class (lbs) Vehicle crash pairs 1990-1995
(Of note, occupants of the lightest cars have dramatically higher death rates.
Also, most significantly from a safety point of view, heavy pickups and SUVs are associated with far higher death rates in the OTHER vehicle than in themselves, or than death rates caused by comparably heavy cars. )
SUV-to-car collisions are six times more likely to kill the occupants of the smaller vehicle when compared to a normal car-to-car collision.
You may be safer inside an SUV, but you're at greater risk of killing others in the event of an accident.
Passive Safety Features - Passive safety features help drivers and passengers stay alive and uninjured in a crash.
Size is a passive safety feature: bigger is safer. In relation to their numbers on the road, small cars account for more than twice as many deaths as large cars.
Restraint systems are also crucial.
Safety belts are the best safety device ever developed for the automobile.
First installed in the 1950s, they have been mandatory equipment since 1967.
Initial use was low (20% in 1970), but education and legislation increased their usage to over 70% by 1987. Modern restraints have automatic seat-belt pre-tensioners to pick up the slack and stretch that occurs in an accident, providing better occupant protection and additional space for the airbag deployment.
It's important to remember that even though airbags help reduce serious injuries, safety belts are still needed for full protection.
Unfortunately, a recent DOT survey found that 50% of drivers under the age of 25 did not wear their safety belts on a regular basis, so more young driver education is clearly indicated.
NHTSA reports that seat belts reduce occupant fatalites by 45 to 60% (depending on the type of vehicle).
Air bags inflate very quickly in the event of a severe frontal crash.
They are designed to work together with the seat belt and do not eliminate the need for a seat belt (the SRS in "SRS Air Bag" stands for Supplementary Restraint System).
The inflated air bag cushions the head and prevents the occupant from hitting the dash, steering wheel or windscreen.
Starting in model year 1998, all new passenger cars sold in the US must have dual air bags (driver and passenger side).
Starting in model year 1999, all new light trucks sold in the US must have dual air bags.
NHTSA reports that airbags reduce occupant fatalities by 30 to 35% (depending on the type of vehicle).
Seat belts and airbags work together in a collision.
The combination of seat belts and air bags is 75 percent effective in preventing serious head injuries and 66 percent effective in preventing serious chest injuries.
Driver- and passenger-side airbags are now standard equipment on every new motor vehicle sold in the US. Most used cars made after 1996 have them as well.
Side-impact airbags greatly increase protection.
Most European automakers offer them as standard equipment, and most Asian and domestic manufacturers offer them on their more expensive models.
Despite some bad press, airbags save thousands of lives every year.
Manufacturers have reintroduced the two-stage airbag (designed at GM in 1970) to avoid potential injuries to children and small adults from cheaper one-stage designs.
It's still vital, however, that children ride in the back seat of any motor vehicle.
For more airbag information read the latest NHTSA Airbag fact sheet.
A special full-width frontal crash test conducted by the Australian NCAP compared the protection from serious head injury provided by driver's air bags.
A Holden Commodore, Mitsubishi Magna and Toyota Camry were tested with and without a driver's air bag.
For the Commodore and Camry without an air bag, the risk of serious head injury was about double that of the same model with a driver's air bag. The Magna was the best performer of vehicles without an air bag, but the risk of serious head injury was four times that of the vehicle with an air bag.
(A word about disconnecting airbags.
NHTSA recommends that babies, children under 12 years old, and people under 4' 7" should NEVER ride in the front seat of a vehicle, because rapidly inflating airbags can severly injure or kill small front-seat occupants.
If there's a child in your life and you have a two-seater, ask your dealer to install a disconnect switch for the passenger-side airbag.
You don't want it permanently disconnected; airbags DO save adult lives.)
Headrests are supposed to provide protection against whiplash in rear-end collisions.
In reality most headrests provide little to no protection.
European automobiles rate far better than domestic or Asian models in this area.
The federal government required their installation in 1967, but haven't provided standards for their successful implementation.
An effective headrest is directly behind the centerline of the head and positioned no more than a couple of inches away.
Be aware that some seating options change the size and style of head restraint
Structural integrity is another important component of passive safety.
The US Department of Transportation requires that the doors and passenger compartments of automobiles made after 1996 meet minimal side impact standards (FMVSS 214).
The legislation doesn't apply to light trucks (minivans, pickups, SUVs), but most manufacturers of even these vehicles have complied with the law.
Active safety features - In the past few years significant accident-avoidance and safety systems have been introduced on many automobiles.
ABS brakes, traction control, electronic stability control, night vision, and automatic cruise control are some of the electronic miracles that assist modern drivers today.
However, a small number of accidents are unavoidable no matter how skilled a driver may be.
Recent deadly 100-car pileups in the United States, Sweden, Great Britain, Italy, and Germany demonstrate that crash survivability must not be taken for granted.
Tires are the most important safety item on a car.
Think about it: they're all that connects your vehicle to the road.
A good set of tires can make a huge difference to the way a car responds to emergency maneuvers.
Tire quality also noticeably affects the way a car handles. Sport touring tires have much more grip than regular tires, although their softer compounds don't last as long.
Anti-lock brakes (ABS) are an often-misunderstood active safety feature.
ABS helps you stop shorter and maintain steering control while braking, especially on slippery surfaces. Take time to understand how it works because in an abrupt stop, ABS feels noticeably different.
With regular brakes, sudden stops tend to lock up the brakes, causing a skid.
Anti-lock brakes sense when a wheel is locked and electronically pump the brakes ten times faster than you could do it, making a ratcheting noise and a vibration in the brake pedal.
Old braking techniques must be unlearned in order to use ABS effectively.
In a panic stop, depress the brake pedal once, and hold it down firmly.
Do not pump the pedal as you normally would, because that defeats the system.
To reiterate: antilock brakes eliminate the need for pedal pumping during sudden stops or while braking during wet or icy conditions
Traction Control is a worthwhile option that improves traction and directional stability on slippery roads, using a combination of electronics, drive train control, and ABS.
Some systems adjust engine power output while gently applying the brakes to particular wheels during acceleration and cornering. BMW, Cadillac, and Mercedes-Benz offer new electronic stability-control systems on their higher-priced models. These systems help stabilize a vehicle's handling when it's pushed to the limit.
Look for these systems to appear on less expensive models in the near future.
