Why Are Car Crash Claim Payouts Heading South?

Letter to Romans: You may be in “Good Hands” with your car insurer. Q is whether it has you by the b**** when you get in a car crash. Majors now deny claims 45% of the time compared to 35% 10 yrs ago. Law requires coverage. But do you get the “backstop” as billed?

It was the WSJ that crunched the numbers & warned: “Depending on the type of crash, the chance of getting a payout [for medical or liability claims] from your insurer has become increasingly remote. But have the insurers really gone overboard in vetting claims? Or did the WSJ play fair with its own analysis? No doubt the insurers are getting better at ferreting out fraudulent claims. And thanks to new technologies they’re even better at enforcing their policies’ subrogation clauses barring a windfall via “double dipping” on medical bills, i.e., submitting medical bills to one’s personal health insurer on top of their car insurer. Yet, the WSJ’s analysis of insurance claim reports insurers file with state regulators appears to be confined to “claims resolved.” If so, one could arguably drive a Mac Truck through that broadest of statistical pavements. In fact, the WSJ doesn’t seem to drill down into the data to consider the possible impact of those “justified” claim denials, let alone those upheld or overturned in a court of law.

Still, it IS hard to break out the hanky for the giant insurers. Besides the possibility they’ve gotten too “aggressive” in using their legit policy conditions, exclusions & limitations I’d also remind crash crazy folks of the wisdom in retaining legal counsel in the worst & most suspicious scenarios. Sure, the best insurers will typically handle most accidents seamlessly. After all, they have a legal duty to “defend.” Even when the customer is at fault for the accident, they usually do a good job in settling all claims without having to go to court. But what happens if/when the other side demands more than the policy’s deductible?

Davd Soul