Insurance Tips

WHEN SHOULD I REPORT AN ACCIDENT?  As soon as possible.  Failure to report an accident could subject you to personal liability if the party later finds themselves to be injured and your insurance company denies the claim due to your failure to report the accident promptly.  You should always call the police and request an accident report when you have had an accident. If you were injured, allow an ambulance to take you to the hospital; an injured person is usually in shock at the time of the accident and does not fully realize the extent of injuries suffered.

CLAIMS HISTORY REPORTS:  Most insurance companies report your claims to Comprehensive Loss Underwriting Exchange (C.L.U.E.). C.L.U.E. maintains a database much like a credit reporting agency.  When you file a claim, it gets reported to C.L.U.E.  When you apply for insurance, the company will obtain a C.L.U.E. report which will reveal all claims filed by persons residing at your address.  The frequency and severity of your losses will be considered in determining whether the company will sell you a policy and the premium you will be charged, if a policy is offered. You may obtain a copy of your C.L.U.E. report by calling 800-456-6004.

DECLINE GLASS COVERAGE:  Some insurance companies will report all claims to C.L.U.E., including glass claims. For instance, Allstate reports claims made against your “full glass coverage” under your automobile insurance policy.  For this reason, it may be advisable not to take “full glass coverage”.  In New York, Allstate will elect not to renew your policy if the frequency and severity of your losses is excessive.  For instance, Allstate has declined to renew the writer’s auto insurance policy in Long Island, NY due to the policy holder making 4 claims in less than 5 years.  The 4 claims consisted of:  1) a stolen & recovered car; 2) a windshield cracked by snow;  3) a windshield cracked by a stone on the highway; and 4) an accident where a witness said the Allstate insured ran a red light, but the police report found otherwise, citing the other driver for failure to yield right-of-way when it made a left turn in front of the Allstate insured. The windshields were replaced by Safelite Auto Glass, an Allstate authorized repair center.  Allstate claims that they spent $367.00 and $447.00 on each of the windshields, for a 1986 Honda Prelude, however, Safelite will sell them, installed at your home, to a retail customer for less than $150.00 each.  Even at Allstate’s price, the cost of the windshields were far less than the amount of premium increase suffered by the Allstate Insured.  Allstate refused to renew the policy and offered to insure their insured with Allstate Indemnity resulting in a total premium increase costing almost $5,000!!!

Find out another reason why you shouldn’t bother with glass coverage and what you need to know about glass coverage when you have a leased car.

CAR RENTAL & TOWING COVERAGE:  While it may be a good idea to have these endorsements, it is not always a good idea to use them.  Although these endorsements may be available to you, even though you have not been in an accident, it is generally recommended that you do not use any of these endorsements unless you you need to use them due to an accident. The reason is that a single towing claim of $35.00 or a car rental claim can affect your claim status with CLUE (mentioned above) and may increase the premium your insurance company will charge you when your policy renews. If this occurs, it can cost you several thousand dollars for a $35.00 claim!  (see decline glass coverage above)  If you use these endorsements in conjunction with an accident then it probably will not affect your premium since you will have a claim, anyway, from the accident and it will likely all be considered one claim. Tips on Renting a Car

THE OTHER BENEFITS OF LIABILITY COVERAGE:  Besides protecting your assets from the claims of a person who you may inadvertently injure, your automobile liability policy will provide you with free legal counsel to defend you.  If you do not have liability insurance, you would have to pay an attorney to defend you against a law suit.  The cost of your legal defense could cost tens of thousands of dollars.   In the event of a law suit against you, your insurance company is contractually responsible to fairly pay claims made against you.  Should you accidentally injure someone, due to your negligence, your insurance company should make a fair offer to compensate the injured party.  If the offer is fair and the injured party agrees, then a settlement will be reached.  When a settlement is reached, your insurance company will require that the injured party sign a release and a stipulation of discontinuance if a law suit has been started.. The release will release you from any further liability beyond the settlement amount and thereby protect your personal assets and income from any further attack. The stipulation of discontinuance will terminate the law suit against you.  You should not rely on your insurance company to fairly pay a claim (as can be seen below, sometimes they do and sometimes they don’t) and you should inquire from time to time from both your insurance company claim representative and the lawyer assigned to represent you as to the progress of the case; whether any demands to settle have been made; whether any offers have been made; the nature of the injuries sustained by the plaintiff; and a copy of verdicts of similar cases and injuries.  The attorney assigned to represent you, although paid by your insurance company, is your attorney and is governed by attorney-client ethics.  Ethics regulations require that your attorney respond to your communications within a reasonable period of time.  It is suggested that you put your communications in writing (they do not have to be typed). 

THE MOST IMPORTANT COVERAGE FOR YOUR AUTO POLICY:  

SUM, UM, UNDERINSURED and UNINSURED:  You should request your broker, agent or insurance company sales agent to give you the maximum underinsured and uninsured coverage with limits equal to your liability coverage.  This coverage is inexpensive and one of the most important endorsements you can buy for your insurance policy.  This coverage pays you when you are injured by someone who doesn’t have insurance, has less liability insurance than you have, or in a hit & run.  Most brokers and agents never mention this coverage to their customers either because they are foolish or because they are afraid that you may buy somewhere else where the agent quotes a lower premium without it. Once you have higher liability limits than the minimum required, this coverage is inexpensive. Most of my clients with serious injuries could have benefited from this coverage. An example is a client who was hit in the rear by a drunk driver who had the minimum $25,000 liability coverage required by New York State. My client suffered a torn rotator cuff (shoulder ligament) and had surgery. He not only suffered a serious injury with possible lifelong implications, but he also lost his job as a waiter because he was unable to work after the injury. My client has $100,000 liability coverage and $25,000 uninsured/underinsured coverage. In New York State, the amount of the underinsured coverage is deducted from the liability coverage of the other car, in this case $25,000 which is the same as my client’s underinsured coverage, so he was not able to collect from his underinsured coverage. He received only $25,000 from the other driver’s insurance company. If my client had underinsured coverage of $100,000, he would have received $25,000 from the other driver’s insurance company and $75,000 from his underinsured coverage, for a total of $100,000.

SHOULD I INSURE MY CAR IN ANOTHER STATE?  It is very unwise to tell your insurer that you live in another state and insure your car in that state to obtain lower insurance premiums.  Most insurers use investigators who can determine that your car was really garaged somewhere else and your insurer may deny coverage for your claim, whether it is for a stolen car, property damage to your car or another car, or personal injury.

SHOULD I PAY A PROPERTY DAMAGE CLAIM WITHOUT REPORTING THE ACCIDENT WHEN IT’S MY FAULT & NO ONE IS INJURED?  If you do, you better get a general release!  Failure to report an accident could subject you to personal liability if the party later finds themselves to be injured and your insurance company denies the claim due to your failure to report the accident promptly.  You should always call the police and request an accident report when you have had an accident.  (see “When Should I Report an Accident”, above)

Moving Your Car To Another State

No-Fault:  Is your state a No-Fault state? You should request your broker, agent or insurance company sales agent to give you the maximum medical payment or No-Fault coverage available.  This coverage is inexpensive and is also one of the most important endorsements you can have.  This coverage will pay your medical bills when you are injured in an automobile accident.  This coverage is usually better than most major medical coverage policies.  For some reason, most brokers and agents never mention this coverage to their customers.

What is No-Fault coverage?  No-Fault insurance covers medical payments for injuries sustained by anyone injured from an accident involving the use and operation of a motor vehicle, without regard to whose fault caused the accident or injury.  This would include all occupants/passengers and may even provide medical payments coverage for non-moving accidents, such as when someone is injured while entering or exiting the insured automobile.  No-Fault insurance law also places limitations on the insured’s ability to sue other negligent drivers and owners for damages.  

In short, injured people are usually covered for medical benefits by the car they were in at the time of the accident, without regard to fault.  This is a complicated area of law and is simply stated here.  There are many exceptions.  For instance, New York State No-Fault insurance does not cover occupants of a motorcycle, however, pedestrians struck by a motorcycle are covered by the motorcycle’s insurance.  Pedestrians struck by an automobile are covered by that automobile’s No-Fault insurance.  An occupant of some trucks will not be covered by No-Fault insurance.  Anyone not covered by No-Fault insurance is not an “insured” and thus not subject to the limitations on the ability to sue other negligent drivers and owners for damages.

No-Fault coverage is primary, which means that your medical bills must first be submitted to the No-Fault carrier before any other medical insurance carrier. Use of a motor vehicle is defined very broadly, i.e.. a person who trips getting out of a car may be covered by No-Fault. In New York, the No-Fault insurance carrier must be notified of your intent to file a claim within 30 days of the date of accident and an application for No-Fault benefits must be filed within a reasonable time thereafter.  Medical bills including all other bills must be submitted to the No-Fault insurance carrier within certain time periods.  In NYS, medical bills must be submitted to the No-Fault insurance carrier within 45 days of the date of treatment.

What is an Assignment of Claim? Your doctor wants you to sign a form allowing the doctor to bill your no-fault insurance company and be paid directly.  Should you sign it?

What is a No-Fault IME? The No-Fault insurance carrier will require you to attend what they call an IME, (Independent Medical Exam).  We call it an Insurance Medical Exam because we believe the word Independent is a misnomer. The No-Fault insurance carrier will usually assign the exam to a company which the insurance company chooses.  That company will then assign the exam to a doctor. The doctors who perform this exam are usually paid by the company assigned by the No-Fault insurance company. The doctor will examine the injured claimant for usually from 5 to 15 minutes and then write a report to the insurance company advising the carrier as to whether the claimant needs any further treatment. Most IME doctors do a substantial amount of IMEs and some doctors do not maintain a private practice of medicine, doing only IMEs. Since the injured claimant’s doctors have a financial interest in continuing treatment, sometimes when no longer needed, the insurance company has a right to determine, by the use of an IME whether continued treatment is necessary. Since the purpose of the IME is to determine whether continued treatment is necessary, the exam is an adversarial one and the claimant has an absolute right to be represented at the IME by an attorney. Performing IMEs can be a substantial source of income for the doctor. Since the income originates from the insurance company, the doctor may be biased.  For these reasons, well call the IME an Insurance Medical Exam.

Most IMEs result in a denial of further treatment and most denials are based upon the assertion that the injury has resolved, or healed, and that further treatment is unnecessary; or that the injury has not resolved and that since treatment has not been successful in resolving the injury, further treatment will not be of benefit. Written reports, records and X-rays from the patient’s doctor may be reviewed by the IME doctor, but are not usually provided to the IME doctor by the insurance company.  Medical records which evidence an injury may be brought to the IME by the injured claimant. Some insurance companies like Liberty Mutual have begun scheduling IMEs so soon after the accident, that diagnostic records were not yet available to be reviewed at the IME.  Without diagnostic records to substantiate the injuries, it is difficult for the IME doctor to justify continuing treatment.

No-Fault – Insurance.com