We’ve been hearing a lot about this topic in the news over the last couple of weeks, and is of great interest for those of us in Ontario who drive south in the winter, especially for March Break!
Florida has passed a law requiring all out-of-country drivers to have an International Driver’s Permit (IDP). Failure to do so could result in fines and/or other charges. It’s not clear what the intention of this legislation was, and if it was to ensure that tourists from overseas were confirmed to be properly licenced. Those of us who have handled auto claims know that it can be quite arduous to confirm licence details from drivers from overseas, further hindered by communication and language barriers. In all likelihood, this law stemmed from such issues, and not because of us, their cousins north of the border.
In Ontario, anyone staying in the province for less than 3 months does not need an IDP. These drivers only need a valid licence from their home province or country, and need to be at least 16 years old. After 3 months, an IDP is needed. More information can be found here on the government’s website.
What are the implications of failing to get your IDP for your Florida vacation? One is that your insurance company might not cover you if you are in an accident. This can have dire consequences for large repair and medical bills. As per CAA (the only place in Canada where you can get an IDP) this new law is not being enforced for Canadian drivers, pending further review of the law. However, strictly speaking, if you do not have a valid licence, your insurer can deny coverage. So, what now?
You’ll likely want to err on the side of caution, and join the lineups at CAA to get your International Driver’s Permit. It’s a quick process, the cost is $25, and you must be at least 18. Don’t worry! It’s just a translation of your information. You don’t have to write a test.
What are some common situations for subrogation in winter? There are a few!
With the temperature fluctuating, our streets become riddled with potholes. Driving over these can often cause significant damage to vehicles. Who is responsible for maintaining roads? It’s likely the city or municipality. It is important to send notice to the city or municipality immediately after the damage occurs. This is important for two reasons. One is that the city will attempt to repair the pot hole, preventing further damage. The other reason is that the notification for most cities is needed within 7-15 days if there’s any chance of subrogation recovery. It is important to follow up on these notices, and to thoroughly document loss details.
2. Snow Plows
Most often, when vehicles are parked on the side of a road, and a plow goes by after a heavy snow, there is a chance for damage to the parked vehicle. Snow plows long gone though, right? Maybe not. Ensure that photos and a cause of the damage to the vehicle are documented as soon as possible. If the damage is consistent with being hit by a plow, there is a chance of recovery. Find out what time the damage occurred, if there were any other vehicles damaged, and who was responsible for the snow removal. Not always easy, but worth a shot!
3. Snow Birds
Lucky folks will get out of the snow for winter, and head south to the U.S. Almost all states are tort for recovery. This means that you go to the at-fault party for recovery of damage. If one vehicle does not have collision coverage, that driver has to go directly to the other insurance company for their damage. It’s important to ensure adequate reserving for these losses, as the at-fault company has an exposure to third party property damage, as well as injury claims.
The important keys for pursuing subrogation successfully is to recognize the opportunities early, and to get complete details of the loss, and documentation to support damage and payments. Attempting recovery too late often leads to failure.
We are pleased to introduce Kevin M. Quinley, our guest blogger. He has a great blog on his own site, www.claimscoach.com, and has graciously allowed us to feature him as a guest blogger. Kevin Quinley CPCU, ARM, AIC is the principal of Quinley Risk Associates LLC, a boutique claims consulting firm based in the Richmond, Virginia area. He provides his nationwide clientele with services related to claims training, productivity, litigation support and expert witness services. He is the author of 10 books and over 600 articles on various aspects of insurance, risk management, claims handling and litigation management. You can reach him at or at his website, www.claimscoach.com.
Police Reports: Investigative Linchpin or Adjuster Crutch?
To what extent should an adjuster rely upon a police investigation? Should it substitute for the adjuster’s investigation or part of it? Or, should it simply augment the investigation but not be viewed as a substitute for it?
This issue arose recently in the context of a bad faith claim where I was engaged as an expert witness. The plaintiff/policyholder alleged, among other things, that the insurance carrier failed to conduct an adequate investigation. Part of the argument was that the insurance adjuster relied too much on the police investigation and did not do more in the way of taking a formal statement from the policyholder and interviewing witnesses.
The Police Report reflected the account of the incident (an alleged assault and battery) from the standpoint of the insured and of witnesses. There was no dispute about what happened in the incident itself. The coverage dispute pertained more to the policyholder’s intent and whether his actions triggered the “expected or intended” or the “willful and malicious” policy exclusions.
This raised the issue as to whether adjusters are obliged in every case to go beyond the Police Report or whether, in certain cases, the report can be the cornerstone of an adjuster’s investigation.
As new adjusters, we are often taught — rightly — to NOT view police reports as sacrosanct. Police Reports can contain errors, just as medical reports or even attorney reports can contain errors. Typically, police are not eyewitnesses to an accident or incident. Their reports will capture facts relevant to the breaking of laws and ordinances.
However, in some instances a Police Report might serve as the cornerstone of a claims investigation. This is not to say that the Police Report always constitutes the end-all and be-all of a claim investigation. It is not to say that the Police Report is necessarily the entirety of an adjuster’s investigation. However, there may be situations where there is no need for the adjuster to plow the same investigative ground that the police have tilled if the basic facts of a claim are not in dispute.
Consider a straightforward accident where Car A rear-ends Car B. No one disputes that, and it is reflected in the police report. Is the adjuster still obliged to track down, identify and take statements from all witnesses? At some point, this appears to be overkill.
Unless the adjuster is on notice that the Police Report is in some way erroneous or disputed, and if nobody disputes the basic facts of a straightforward accident, there may be instances where the adjuster can rightly rely on a police investigation for the bulk of the fact-finding without being accused of laziness.
The overarching principle is that adjusters and insurance companies are obliged to conduct reasonable investigations. This is required in many state unfair claim practice statutes. It is also found in the NAIC Model Unfair Claim Practices Act. Of course, “reasonable” is not defined. There is no paint-by-numbers description of what goes into reasonable. The statutes do not delineate the components of a “reasonable” investigation. What is reasonable in terms of investigation must be determined by the particulars of each individual claim.
At one extreme, you have straightforward scenarios where it is undisputed that Car A rear-ended Car B. If the police report reflects that, both drivers agree and there is no evidence to the contrary, then perhaps the police report can serve as the cornerstone of the adjuster’s investigation.
At the other extreme are complex and disputed facts situations. These could include the Deepwater Horizon oil spill in the Gulf of Mexico or the Fukushima nuclear meltdown in Japan. Here, official reports might be taken with a grain of salt and should be the starting point, not the endpoint of an insurer’s investigation.
So, where do you stand on the issue? Are there situations where the Police Report can substitute for a big chunk of the adjuster’s investigation, OR is the adjuster obligated to always go back over the features captured in the report?
With the new Accident Benefits regulation in effect for 2 years, have these changes had an effect on fraud? Is the amount of fraud reduced or have the culprits gotten better at hiding it? It seems like we’re always two steps behind!
Time will tell, if the amount of fraud is being reduced, especially with the drastic increase in the amount of mediations being scheduled through FSCO. Hopefully, less fraud will equal lower claim payouts AND lower premiums.
A word or two from Jim Cameron, President, Cameron & Associates:
Interesting! New Hampshire has adopted a new medical malpractice injury claim procedure.
The claimant would present an “early offer” to a facility or service provider they deem responsible for the injury. The offer would be based on specific defined criteria of “actual out of pocket medical expenses make an offer based on the actual out-of-pocket medical expenses, replacement services … and 100 percent of the claimant’s salary, wages, or income from self-employment or contract work lost as a result of the medical injury. There is also an allowance for some attorney fees or court costs. It is not intended to be a complete settlement as pain and suffering and the more contentious aspects of a claim are NOT included. Some payments can be made on a schedule for selected injury types. The tort system could still provide the ultimate resolution and this is not intended to replace the tort system but merely supplement it.
The process has its own adjudication rules and is completely voluntary on both sides.
This will be a state to watch in 2013 when this takes affect.
The Minor Injury Guideline and Income Replacement Benefits
by Nick White, Accident Benefits Consultant
The current three tiered approach to medical rehabilitation limits is not new. Insurers were already used to handling claims in the Pre-Approved Framework (PAF), which is arguably a precursor to the Minor Injury Guideline (MIG). The new MIG seems more inclusive in its definitions, and at first blush, far less porous than the PAF.
Both the MIG and the PAF limited a claimant’s access to Attendant Care Benefits (ATC), again predicated on the notion that the injuries sustained are minor, soft-tissue in nature. The new Schedule dictates that if their injury is still ‘Minor’ as described in the Guideline, they are not eligible for ATC. The Schedule also allows a person to escape from the restrictions of the Minor Injury Guideline if they can demonstrate by compelling evidence provided by a health practitioner that due a pre-existing condition will prevent them from achieving maximal recovery from the minor injury. The nexus between Attendant Care Benefits and the MIG , appears to be fairly straight forward. The nexus between the Income Replacement Benefit (IRB) and the MIG is far more difficult for an insurer to navigate.
The PAF limited a claimant’s recovery of IRB to a 12 or 16 week cap depending on whether the injuries described were a WAD I or WAD II. The MIG has no such connection to IRB. A claimant determined to be in the MIG will collect IRB predicated on medical eligibility based on the Disability Certificate (OCF-3), which can be reassessed by requesting an update OCF-3 and/or moving to an insurer’s examination.
A major hurdle for insurers has come out of this more inclusive definition of a Minor Injury – it includes partial tears. An insured person who uses their shoulders regularly in the job, and sustains a partial tear rotator cuff, may meet the pre-104 week test of ‘substantial inability’ to engage in their pre-accident employment. So if insurers read the letter of the SABS – they will pay the MIG limit of $3500 in medical rehabilitation and pay IRB for 104 weeks (at which time the test changes to a ‘complete inability’). The insurer will have to hope the claimant can access community resources, OHIP or their private plan if applicable.
What is a claims handler to do? Do you hold the letter of the SABS/ MIG and simply pay $3500, the maximum level of medical rehabilitation benefits, and hope that FSCO and/or the Courts agree in your literal interpretation? Or do you identify these files now and allow these claimants to leave the MIG, access medical rehabilitation beyond $3500 in the hope of minimizing the length of time they collect a disability benefit?
An argument can be made that the partial tear (and other injuries) – if not treated will become chronic thus negating the original MIG determination. This could put not only the accident benefit insurer in an awkward situation, but ultimate increase the volume of third party bodily injury claims.
Louis’ message on how to achieve excellence was to focus on the consumer and listen to what they say and design products and services around that. This is not that easy to accomplish in an environment where some of the products, such as auto insurance, cannot be differentiated by law.
Like most visionaries, he believes that the social media will shape the landscape of how to best deliver products and services going forward.
This was a great seminar and I was very glad to have attended. The presentation sparked a lot of interest and conversations on the subject of considering the customers’ needs and demands, as well as the changing demographics of the workforce.
Thanks again to the Institute for hosting this informative session!