Car Insurance

Jumat, 17 Februari 2012

Staged Accident of the Week

The Swoop and Squat Fraud

This video illustrates the popular "Swoop and Squat" staged car accident. Staged traffic accidents are on the rise, endangering the lives and boosting the car insurance rates of innocent drivers who may unwittingly think they're at fault.

Which claims should be treated under the Minor Injury Guideline

The Statutory Accident Benefits Schedule (SABS) introduced in September 2010 expands on the previous definition of whiplash associated disorders (WADs) by including sprains, strains, dislocations, lacerations, contusions, abrasions and any clinically associated sequelae (secondary consequences or results of an injury) in a new minor injury definition. Including associated sequelae in the definition is meant to cover common complaints associated with soft tissue injuries such as pain, headaches, dizziness, difficulty sleeping, anxiety, depression and fatigue.

The Minor Injury Guideline (MIG) and a $3,500 cap on treatment and assessment expenses apply if the claimant sustains an impairment that is predominantly a minor injury. Currently there hasn’t been any guidance provided from the Superintendent, arbitrators or the courts on how to determine which impairment is predominant where the claimant sustains multiple impairments. However, another impairment may not necessarily create entitlement to medical and rehabilitation expenses in excess of $3,500.

In other jurisdictions over 80% of auto accident injuries fall under this description. That fact that the percentage is lower in Ontario suggests that some health care providers resist categorizing their patients as having a minor injury.

The MIG was not intended to cover complete tears of muscles or ligaments, fractures or serious psychological impairments. Still a minor fractured nose or finger may require little treatment in comparison to a WAD injury and therefore it could be argued that the WAD injury is the predominant one. Adjusters should seek independent medical advice when a claimant appears to have multiple impairments or a more serious impairment that would exclude them from treatment under the MIG. As well, the SABS does not set out that all claimants start out being treated under the MIG, only those with minor injuries. An insurer that insists on starting all claims in the MIG is providing clients with poor service and exposes themselves to special awards and bad faith claims.

The MIG and $3,500 cap do not apply to a claimant if his or her practitioner determines and provides compelling evidence that a pre-existing condition prevents the claimant from achieving maximal recovery if subject to the cap or the MIG. There is no guidance as yet as to what constitutes compelling evidence but these situations should be rare and an independent medical opinion would be appropriate.

Common diagnoses used by providers to escape the $3,500 cap are psychological impairment and WAD III (see below). Depression and anxiety are common complaints following an auto accident and often resolve themselves over time. That is not the case with post-traumatic stress disorder. Again, an independent medical opinion would be appropriate in these situations. Keep in mind that if the exam needs to determine whether a physical impairment or psychological impairment is predominant you need to select a provider with an appropriate background, who can properly weigh the impact of both impairments.

Rabu, 15 Februari 2012

Can an Insurer Terminate Benefits When It Learns the Accident Was Staged?

Synopsis:

An insurer introduces a new internal policy where they review claims more carefully if they occur within six months of a newly created policy. The insurer in good faith pre-approves a number of treatment plans submitted on behalf of one of their policyholders while they investigate the accident. The investigation concludes that the accident was staged and did not occur. What can the insurer do?

The insurer could argue that although it may have agreed in good faith to pay certain amounts based on the representations it received about an accident having occurred and injuries having been sustained, once it learns that its agreement to pay was based on misrepresentation or fraud, it may rescind the agreement for that reason.

Section 53 of the Statutory Accident Benefits Schedule (SABS) states that:

“An insurer may terminate the payment of benefits to or on behalf of an insured person,

(a) if the insured person has wilfully misrepresented material facts with respect to the application for the benefit; and

(b) if the insurer provides the insured person with a notice setting out the reasons for the termination. O. Reg. 34/10, s. 53.”

So the insurer could invoke that section by providing notice under section 53 (b) that it refuses to pay anything not already paid including the outcome of their investigation.

Section 52 (1) of the SABS also says a person is liable to repay an insurer:

"Subject to subsection (3), a person is liable to repay to the insurer,

(a) any benefit described in this Regulation that is paid to the person as a result of an error on the part of the insurer, the insured person or any other person, or as a result of wilful misrepresentation or fraud;

(b) any income replacement or non-earner benefit under Part II that is paid to the person if he or she, or a person in respect of whom the payment was made, was disqualified from receiving the benefit under Part VII; or

(c) any income replacement, non-earner or caregiver benefit under Part II or any benefit under Part IV, to the extent of any payments received by the person that are deductible under this Regulation from the amount of the benefit. O. Reg. 34/10, s. 52 (1 )."

So if the insurer has already paid out amounts to a provider, this section gives it the right to claim it back by first invoking section52 (2) (a) and then following up in court if necessary.

"If a person is liable to repay an amount to an insurer under this section,

(a) the insurer shall give the person notice of the amount that is required to be repaid; and

(b) the insurer may, if the person is receiving an income replacement or caregiver benefit, give the person notice that the insurer intends to collect the amount by reducing each subsequent payment of the benefit by up to 20 per cent of the amount that would otherwise be the amount of the benefit. O. Reg. 34/10, s. 52 (2)."

In summary, an insurer is not obligated to continue to pay pre-approved treatment when it subsequently discovers that the claim is fraudulent. By law, any benefits already paid out should be repaid to the insurer.

Jumat, 10 Februari 2012

Insurance News - Friday, February 10, 2012

NY Senate Passes Bill Making Forging Auto Insurance Card a Felony

The New York State Senate has passed legislation designed to ramp up penalties for those who commit automobile insurance fraud.

The bill, SB 578, would make it a felony to forge an auto insurance card, certificate of insurance or other documents that are required to legally operate a motor vehicle. Forged insurance cards and documents are often used to fraudulently register cars so that owners may operate them without paying auto insurance premiums. The bill also makes it a felony to sell 10 or more false insurance cards or documents.

read more...

Hillsborough County's Crackdown Leads to 62% Decrease in Staged Auto Accidents

Crackdown on Personal Injury Protection (PIP) fraud - or staged auto accidents - yields dramatic results in just the first six months in Hillsborough County, Florida. Today, the National Insurance Crime Bureau and the County's Consumer Protection Agency are releasing numbers spotlighting a 62 percent decrease in staged auto accidents and questionable insurance claims. This is the first report since passage of the Hillsborough County PIP Medical Providers Ordinance last September.

read more...

Judge Declares Mediation “Failed” if not Mediated within 60 Day

A decision from the Superior Court of Justice of Ontario was released that declares a mediation by the Financial Services Commission of Ontario (FSCO) failed if it has not been mediated within 60 days of the application being submitted.

Cornie v. Security National [2012 ONSC 905] was heard with three other similar cases.

Justice Sloan found the insurance companies’ postion that accident victims must simply wait to be ”preposterous” and suggests that FSCO can continue to try to comply with the 60 day period or seek a change and/or ask for some legislative direction to extend the 60 day period in appropriate circumstances.

He points out that it currently appears that FSCO’s Dispute Resolution Services’ Mediation Unit is functioning without timelines and has been doing so for years. No one wants to go to court for any sum under $10,000 if mediation can resolve the issue, but accident victims should not have to remain in perpetual limbo.

Staged Accident of the Week

The Right Turn Fraud

This video illustrates the popular "Right Turn" staged car accident. Staged traffic accidents are on the rise, endangering the lives and boosting the car insurance rates of innocent drivers who may unwittingly think they're at fault.

Senin, 06 Februari 2012

Insurance News - Monday, February 6, 2012

P&C Industry Supports U.S. Crash Parts Law

The property and casualty insurance industry is supporting legislation that would alter patent law to allow for use of parts not made by the manufacturer in repairing damaged vehicles.

The Promoting Automotive Repair, Trade, and Sales or PARTS Act, was introduced by Rep. Darrell Issa (R) and Zoe Lofgren (D), both of California.

The bill amends currentU.S.design patent law to limit to 2 and half years the period during which car companies can enforce their design patents on collision-repair parts against alternative suppliers.

Kamis, 02 Februari 2012

Insurance News - Thursday, February 2, 2012

Insurance Benefits Backlog a Nightmare for Accident Victims

Getting hurt in a car crash is bad enough, but for many people in Ontario, it’s only the beginning of a lengthy nightmare.
People turned down for accident benefits by insurance face a wait of as long as two years before their appeals wind their way through the system administered by the Financial Services Commission of Ontario.
read more...
Steps being taken by the Financial Services Commission of Ontario (FSCO) to address the mediation backlog include mandatory settlement blitz days, joint consent to fail mediation, and the introduction of an electronic scheduling process.
read more...
FSCO also released a Request for Proposal on January 16, 2012 with the intention of contracting with up to four dispute resolution companies to provide high volume services to eliminate the file backlog. The companies would need to be able to provide arbitration services in addition to mediation services to prevent a backlog in arbitration cases as files work through the system. The deadline for proposals is February 24, 2012 and contracts are expected to be in place by May, 2012.
read more...
FSCO Releases the Costs of Goods Guideline

The Financial Services Commission of Ontario (FSCO) has released a guideline on the costs of goods. The Guideline was developed as a result of a recommendation by the Auto Insurance Anti-fraud Task Force in its interim report regarding measures that should be undertaken as soon as possible.

The Guideline indicates that where an insurer has agreed to pay for a medical or rehabilitation good under sections 15 or 16 of the SABS, they are only required to pay the lowest retail price available to any member of the general public in Ontario. In the event of a dispute, the onus is on the insurer to provide evidence of the retain price of an item.

read more...

Social Media Sleuthing

Social media has quickly become the foremost activity on the Internet. The explosive growth in user-generated content has been a boon for insurance claims adjusters and fraud investigators. Navigating the social media landscape, however, can be tricky.

read more...