Archive for the ‘Settlements’ Category

Nevada Auto Insurance Companies – Potential for Settlement of Car Accident Claims

INTRODUCTION

I was browsing the internet recently for information on auto insurance company settlement ratios.  The first information that I found involved the country of  India. That post stated that  insurance company settlement ratios ranged from 97.03 per cent to 53.85 percent.  Most  settlement ratios went down slightly from 2011 to 2012. This may be due to the current worldwide economic conditions.

I then found the website for Ohio Department of Insurance which indicated that in 2011, Ohio residents paid $5,056,298,077.00 in auto insurance premiums. Of that, State Farm companies collected about $959,000,000.00 and Allstate companies  collected $429,000,000.00. The complaint ratio for Ohio is  one complaint for each million dollars of auto premiums paid.  Insurers on the Ohio list include Allstate companies, American Family, Farmers, Geico,  Liberty Mutual Noationwide, Progressive, Safeco,  State Farm and USAA, which also are carriers that write auto insurance in Nevada.

I then came across a post entitled Top 6 Worst Auto Insurance Companies – 2011  on the Michigan Auto Law Blog.  This article listed Dairyland Insurance Company as receiving the  Worst Insurance Company in Michigan Award.

Allstate and State Farm were  rated 3d and 4th worst.  Allstate was criticized for cutting payments to its own customer as a way to boost its profits.  Further criticisms were for the use of a computer program designed to reduce claims payments, and for  pushing  injury victims to accept quick, but very low, settlements.

State Farm is the number one provider of auto insurance in the county. In 2009 it had a $777,000,000.00 profit nationally.  Michigan is a no-fault state.  State Farm is the most aggressive insurance company in Michigan accusing its own customers of fraud and putting them under investigation and fighting payment of their no-fault insurance benefits.

Progressive was the winner of the Michigan Auto Law’s Worthless Coverage Award, indicating that Progressive’s uninsured motorists coverage was worthless.

There are many internet postings indicating that Farmers is rated the worst insurance company overall.  They had the most complaints in California, Washington, Texas, Oregon, Arkansas, Arizona and Colorado.  They were criticized for worst ratings for collision repair, overall claim experience, worst claim  settlement representative, worst claim process and settlement procedures and consumer reports ratings. Their employee salaries and bonus encouraged and condoned delay, denial and underpayment of claims and forced litigation of claims.

Affiliated, subsidiary, sister and related companies of Farmers include domestics state companies with the Farmers in their name,(Example: Farmers Insurance Company of Arizona), Truck Insurance Exchange,  FFS, FIG, Fire Underwriters Association, Foremost Insurance Company, Mid Century Insurance Company, Prematic Service Corporation,  Truck Underwriters Association,  Civic Property and Casualty, Exact Property and Casualty, Bristol West Insurance, Neighborhood Spirit, Zurich North American, Zurich Financial Services Group and 21st Century Insurance.

Based upon my observations in handling personal injury claims against insurance companies for the past 30 years, I have come up with the following chart which rates the settlement potential of the major auto insurance carriers doing business in Nevada.  If you are a claimant you may want to refer to this chart to before you criticize  your attorney for not promptly settling your auto insurance claim.

BEST SETTLEMENT POTENTIAL

State Farm is by far the most solvent insurance company in the world. The chance of his insurance company becoming insolvent, I am told, is very low.  They are the number one auto insurance carrier in the nation.  Therefore, they can afford to pay more to settle an auto claim than any other insurance carrier in Nevada.  I do find that State Farm is quick to assign special investigators to first party claims where any fraud is alleged.  They will hire an attorney who will subject the insured to EUO (examination under oath). In the EUO the first thing that the attorney doses is to read insurance fraud statutes into the record and they have told my clients that they are sending a copy of the EUO  transcript the Attorney General.

WORST SETTLEMENT POTENTIAL

It is very difficult to settle car accident claim against Farmers Insurance in Nevada. I am told, and experience bears this out,  that Farmers doesn’t offer more than 1.3 times the claimant’s medical bills to settle a  pre-litigation personal injury car accident claim.  Farmers will also try to devalue the injured victim’s medical bills.  This makes it almost impossible to settle a Farmers claim, unless the claimant has Medical Payments Coverage that pays for all he claimant’s medical bills. Therefore, the chances of settlement of a Farmers claim are dismal  and litigation is almost necessary.

Farmers will pay car accident claims that have a value well in excess of their insured’s liability policy limits.

In litigation Farmers mostly uses in house counsel. Their in house counsel are very busy.  Each attorney has handles a lot of cases.  The attorneys are generally likeable individuals.  They sometimes, on egregious liability claims (i.e. drunk driving) or very high property damage car accident claims, will settle prior to an arbitration hearing or trial. In most cases, if the claimant gets a good arbitration award they will be willing to offer a more reasonable settlement offer, generally less than the arbitration award, to get the claim settled.  In some cases they will agree to pay the arbitration award plus any costs and prejudgment interest that may be awarded by the arbitrator.  Farmers, I believe tries to weed out those cases where the claimant’s attorney does not strongly believe in his client’s case to the extent that he is willing to go thorough litigation to get a higher settlement for his client. I believe that this strategy works with some attorneys.

Mercury,  Dairyland, American Access, Prudential and Progressive Insurance are companies that write a lot of minimum liability policies $15,000.00/$30,000.00) for their insureds.  They employ a strategy to low ball cases.  They do not want to pay out their minimum limits. They hire aggressive attorneys to handle cases and they often make you go through the time consuming arbitration program. And, when you win the arbitration, then they will exempt the small case out of the short trial program and now the attorney is in normal litigation.  In normal litigation the cost of trying  the case, including the cost of paying doctor to come to trial to testify,  is in many cases higher than the amount in controversy.  Of course, the down side exposure to the client associated with not prevailing in excess of a low offer of judgment is very high.  This potential downside exposure could be tens of thousands of dollars to the claimant. This puts pressure on the attorney and the claimant to accept a lowball offer of judgment served by the defense.

Progressive writes a lot of a minimum policies because of their television commercials and low premium advertisements.  Often they  get large claims against minimum policies and there is no underinsurance available. In these cases you try to get their insured to personally contribute to the settlement. However, with or current economy (most people don’t have any saving) this strategy doesn’t often work.

MEDIUM POTENTIAL FOR SETTLEMENT

Companies that fall into this category  are Geico, Allstate, USAA, American National, American Family, Met Life and  Nationwide.  However, these companies do not like low property damage cases. They do not like case that involve any questionable liability or comparative fault.  If there is comparative negligence element involved with a claim, they offer only a minimal settlement, and force the claimants attorney in litigation. On low impact cases they will hire biomechanical expert to inspect the vehicles, and he always renders an opinion  that nobody could have been hurt in the accident.

CONCLUSION 

The purpose of his article is to give you some indication of how various insurance companies in Nevada will react to your claim. You need to know what you are  up against on an auto insurance claim. This is the only way that you can make an intelligent decision to either settle or not settle your claim. I think that it is good policy to  explain to each client the adverse insurance company’s idiosyncracies on settlement , so that the client can be prepared for what is likely to transpire on his claim.

Fitness Facility Releases – Do They Prevent Recovery In a Personal Injury Case?

Know what you are signing when you sign a release regarding personal injuries.

A few months ago I saw the staff members of my gym receiving CPR instruction. Recently, I noticed a defibrillator (AED) on the wall of my gym that wasn’t there previously. I did some research and determined that there has been litigation concerning this issue.

When you join a fitness facility, you will most likely be required to sign a Release. There are generally two types of Releases.

  1. A Release for past injury and damages is the type of document that will be signed at the end of a personal injury case. The injured party accepts some consideration (usually money) to settle his claim. The Release language prevents the injured party from bringing another claim or action against the person or entity that allegedly caused the injury, no matter what happens in the future. These types of Releases are generally upheld by the courts.
  2. A Release for prospective injury concerns an injury that may occur in the future. These types of Releases may or may not be upheld by the courts, depending on the specific circumstances surrounding the release. Notwithstanding, their validity Releases are a deterrent to litigation, and they invariably contain clauses which state that, if a lawsuit is filed, the prevailing party will be entitled to Attorneys’ fees and costs incurred in the litigation.

In one defibrillator case, the fitness facility intentionally did not require that employees be trained in the use of CPR to assist a member that may experience a heart attack. Furthermore, they did not train their employees on the use of a defibrillator, despite the fact that between 20-40 members each year experience heart attacks while at their facilities. The underlying policy was established to avoid potential liability for improperly or negligently performed medical assistance and to save the expense of certifying their staff on first aid procedures and to save the costs of the cost of the first aid equipment. The cost of a defibrillator is between $1,100 .00 and $2,000.00.

Obviously, this hands off position saved the facility a lot of money. In one case the member that suffered a heart attack while on the facility suffered severe and irreversible brain damage, was able to recover from the facility (no Release was signed In this case).

Since the installation of AED’s, lives have been saved. Fitness facilities are aware that published standards by the American Heart Association and American College of Sports Medicine recommend the use and availability AEDs in health clubs.

In another case against a fitness facility a woman, who had signed a Release was
was injured when she fell over a dumbbell that had been left off the rack in the weight lifting area. The court ruled that the Release was valid and enforceable and that it covered the incident resulting in the member’s injury, because the member’s injury arose out of the “use” of the facility.

In order for a release to be effective, it must be easy to read and must be readily noticed within the membership contract. The general rule is that if must be in larger type than the rest of the contract and that it must be in bold face type. It should not be hidden in a contract. A lay person, with normal vision should be able to easily find and notice the Release language in the contract. The waiver of legal rights cannot be hidden in fine print. The language cannot be ambiguous. If there are ambiguities in the Release language, the ambiguities will be construed against the party that drafted it. The staff employee signing up the member should explain the Release language of the contract.

Whether the release is clear and unambiguous is a question of law. This means that the judge rather than the jury determines this issue. If the Release absolves the fitness facility from “negligence”, every act of negligence of the fitness facility need not be spelled out in the contract, because it is virtually impossible to list all possible cause of accidents.

The main issue involved with Release cases is whether the particular risk of injury is inherent in the member’s general use of the fitness facility, as opposed to the maintenance of the facility. Releases are generally upheld if the injury occurs out of the member’s use of the facility
(the member drops a weight on their foot). There is a better chance of prevailing, regardless of the Release, if the member is injured by a negligent maintenance of the facility.

Releases are based on the legal theory of Assumption of Risk. Assumption of Risk means that inherent risk of injury is known to the injured party, and that he voluntarily proceeds to engage in the activity in light of the know risk.

In 1986 I had a case in before the Nevada Supreme count known as the “Flyaway” case. Renaud v. 200 Convention Center Ltd. dba Flyaway, 102 Nev. 500, 728 P.2d 445 (1986). This case also involved a Release for prospective injury. At that time there were very few published cases on this issue. The “Flyaway” facility involved a free-fall simulator. The Court stated that the Release language was based upon the legal theory of Assumption of Risk. A risk is voluntarily assumed by a person, if it is know to him; he fully appreciates the danger, and there is actual knowledge of the danger assumed. This Court stated that the knowledge of the risk in this case was a question of fact (something for jury to decide in a jury trial). The jury should consider factors such as the nature and extent of potential injuries, and the haste or lack thereof with which the release was obtained, and the understanding and expectations of the parties at the time of signing. ( Flyaway did not disclose that risk of injury associated with the use of this novel recreational facility was actually quite high).

After the Flyaway case was decided, this decision lead to the settlement of many pending Flyway cases filed in our state and federal court.

Therefore, a fitness, recreational or sports facility Release is not always a bar to recovery for an injured party.

Memo to Physicians Treating Personal Injury Patients Who Are Medicare Eligible

You are probably treating at least one personal injury patient under an attorney lien, auto med pay, premises med pay or health insurance, who is also Medicare eligible. Or, you may be treating a personal injury patient that you are billing Medicare directly for your services.

From the beginning of a personal injury claim, you should always inquire into a personal injury patient’s Medicare status.

Medicare eligibility applies to persons over 65 years or age.  Or, it can  apply to disabled individuals who are under 65.

For any victim of a  personal injury accident who is Medicare eligible, the attorney is burdened by complying with the Medicare reporting requirements, which are very cumbersome and time consuming.

Furthermore, the attorney must comply with the Liability Medicare Set-Aside Arrangements (LMSA).  A Set-Aside must be done whenever a patient making a personal injury claim will be seeking future medical treatment that will be covered by Medicare. This is another cumbersome, time consuming, and sometimes expensive, procedure.

Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance settlement has been completed as of he date of the settlement, and that future medical items and/or services for that injury will not be required, Medicare considers its interests, with respect to future medicals for the particular settlement satisfied. Please see the Centers for Medicare and Medicaid Services September 30, 2011 Memorandum .  If the beneficiary receives additional settlements related to the underlying injury or illness, the attorney must obtain a separate physician certification for those additional settlements.

The physician certification obviates the need to for the attorney to submit for a LMSA.  Such certifications by treating physicians are of tremendous assistance to the patients and their attorneys who are pursuing the third-party claim against the person who caused the personal injury accident.

Please help us by placing, where appropriate, a written certification that no future treatment is expected in your discharge note, discharge summary or final report to the attorney.  As you already may know, time delays associated with a obtaining a settlement draft from an insurance company on a Medicare claim can often be months or even years. If you make this change as a part of  records procedure, this can assist us in getting your bill paid in a more timely manner, and will result in a quicker  distribution of settlement proceeds to your patient.

Personal Injury – What Has Changed in the Last 30 Years

I started working on personal injury cases prior to going to law school.  I have witnessed many changes in the insurance industry, the law, and  attorney advertising  that have impacted  personal injury claims over the years.  I have argued many cases before the Nevada Supreme Court that have created new case law on automobile insurance.  I have witnessed the implementation of the arbitration and the short trial and mediation programs, which have made Alternative Dispute Resolution a viable alternative to jury trials in resolving Personal Injury cases in the state of Nevada.

I can remember a time, after I was admitted to the Nevada bar, when Arbitration was never used,  and all contested personal injury cases were  resolved through normal litigation.  Alternative Dispute Resolution was seldom used to resolve any personal injury case.  These cases either settled or proceeded to trial.

When the cap on statutory arbitration was raised to $15,000.00, personal injury attorneys  started using the Arbitration statute in an attempt to resolve smaller personal injury cases.  Then came the court annexed mandatory arbitration program.  The cap on court annexed arbitration was raised eventually to $25,000.00 and then to $40,000.00, and arbitration is now mandatory and non-binding for all cases with damages of under $50,000.00.

I was a member of the Nevada Supreme Court Advisory Committee for the short trial program. I tried the first case in the short trial program that used a Pro Tempore Judge (Senior Judges handled the first few cases that were tried in this program).  The short trial program in Nevada is certainly  working and has a high resolution rate. Some insurance defense attorneys still insist on exempting cases from the short trial program.  Now, most short trial cases settle before they ever get to trial.  I had one short trial in 2011that settled the morning of the trial in the courtroom.   All short trials that I had set for trial in 2011 settled.

In the last 10 years, I started using Mediation to resolve cases.  I learned that, if you do your homework ahead of time and determine what deals that you can make with health insurance companies and providers on their liens before the mediation hearing, you can give your client a  an accurate estimate of what they will net on any mediation offer. This greatly increases the probability that a case will settle as a result of the mediation hearing. All cases that I had set for conventional trial in 2011 settled as a result of mediation.

Alternative dispute resolution is definitely the way to go on PI cases under $50,000.00, and mediation is the way to go on cases over $50,000.00.

The medical management of musculoskeletal injuries has also evolved in the last 30 years.

Over the years, there have been medical tests, like diagnostic utrasound, which attempted to diagnose musculoskeletal injuries that had a short life span. I have seen the evolution of pain management as a method of treating spinal injuries.  The cost of pain management is very high. It has changed the personal injury business tremendously.  We now have plasma rich protein injections (PRP) to promote the healing of joint injuries and digital motion x-rays and prolo injections to diagnose and treat  ligamentous injuries of the spine. There are even a few  Laser therapy facilities here in Las Vegas. Discograms are now the litmus test for diagnosing the integrity of an intervertebral disc prior to spinal to surgery.  I am sure that new medical procedures and techniques will be applied in the future to help us to diagnose and treat neck and back  injuries.

Jury trials on personal injury cases have become really expensive.  On a recent case I had an expert charge for an IME and then billed $3,000.00 per inch for his review medical records.  Then he billed for deposition preparation on a deposition that was set by the defense.  We pay these fees because we have no choice. That case settled in mediation, so I was reimbursed for these advanced expenses. The costs for expert fees have been going out of control. I had one medical expert tell me that one large personal injury firm in town reserves his time for  a week prior to trial, and they pay him to close down his office so that he can participate in trial preparation.  Most personal injury firms can’t afford to pay these expert fees.  We need to get experts to accept more reasonable fees.  I have learned that everything is negotiable, so I try to negotiate with experts on their fees in the interest of helping my clients.

Over the years I have learned that auto accident victims with soft tissue spinal injuries don’t get adequate compensation, especially the ones that have been involved in multiple accidents and/or so-called low property damage accidents.  Over time a degenerative process occurs from these old spinal injuries; and,  in many cases, the victim’s spinal condition becomes chronic and eventually they need spinal surgery.

Many clients overdose and die from narcotic pain medications and muscle relaxers, or from the complications associated with their use.  Many clients become addicted.  Long term use of non-steroidal anti-inflammatory medications will cause kidney disease. These are attendant complications of drug use for which insurance companies give no compensation or consideration whatsoever. This needs to change.

Insurance companies have forced claims into litigation on what they determine are low impact cases.  Many attorneys don’t take these claims.  By experience I do know absolutely that victims do get injured in these accidents, sometimes seriously. Some require spinal surgery. Nobody that has been involved in the personal injury business for any length of time can  legitimately take the position that people don’t get hurt in these accidents.  These are usually time consuming and low profit cases. Juries don’t like these cases. Insurance defense attorneys like to take them to trial because they are easy to defend.  We need to keep fighting for our clients on these cases.

We now have attorney advertising which promises immediate compensation.  What is not disclosed in these commercials is that the compensation comes from a loan with a minimum interest rate of at least 40% per year (and perhaps as high as 150% per year), when you factor in what are called “administrative costs.”   On an loan of $500.00 from an NJA approved lender, the client owes  $799.00 after just one year. Other rates are higher. I know of one case that on  the  original loan request of $50,000, the lender loaned  $100,000.00, and the loan balance soared past a million dollars in a few years.  The available insurance is $1,000.000.00 and several medical providers seek compensation for the care they gave to the injured client. The settlement funds will, eventually, be distributed by Court Order.

Many people have heard that a case’ value is “three times the medical bills” That may have been true in the past in some cases. Now one major insurance carrier in Las Vegas is only offering 1.3 to 1.5 times the medical bills on good cases. They defend  their cases with in house counsel to save legal fees. We need to raise this standard of compensation so that victims of personal injury accidents are fairly compensated for the injuries caused by negligent drivers.

What I see in the personal injury field is that large advertising firms won’t reduce their fee to settle a case, but they want providers to take a considerable reduction to promote settlement.   These firms don’t disclose their fees during the settlement negotiations.  I’m for full disclosure. If an attorney is going to ask a provider to cut it is only fair that it only fair that the attorney be willing to take a commensurate cut on his fees.

If  you’re in this business long enough, issues will come up from past cases that take up a lot of your time.  Even though providers are paid, years later  later you will get monies owed statements or status requests that you have to deal with. Occasionally, accounting mistakes are made.  So, you must give proof  to the provider that they were paid.  This takes up lot time. The longer that you are in this business, the more of these types of errors you receive.  That’s why we need to keep good accounting records – so, administrative problems on personal injury cases can be handled without problems or inconvenience to the clients.

We need to keep our hard files for 7 years from the time that the case closes.    This is a big expense.  You need a storage facility that is usually not at the same location as your office.  You need an indexing and retrieval system.  Retrieval issues come up quite often. This involves a tremendous ongoing time and expense.  Then after the seven years you have to shred these closed files. I think that the bar needs to revisit their storage requirements.  Perhaps our rules can be changed by our legislature, so that we can include these ongoing expenses as  costs to the prevailing party after litigation.

Now we have to deal with stricter requirements when there are actual or potential Medicare liens.  This is also taking up much of our time.  I have one case that has been pending for years.  It was a food poisoning case. The client died. So the case settled a year and a half ago and after the Final Detail Settlement form was sent in, we received a new lien.  We had previously  received a new no claims paid letter. The new lien  came back listing tens of thousands of dollars of  physical therapy bills.  Of course, you don’t get physical therapy for food poisoning.  Anyway, this had to be appealed leaving this case undone. And after we get that resolved, the Probate case also  has to be closed.  Does the reduction that you receive on the Medicare lien compensate the attorney for all this time involvement? The federal government should have a vehicle for reporting these war stories.

How about our minimum automobile liability limits of $15,000.00 per person / $30,000.00 per incident?  Isn’t this a ridiculously low limit for financial responsibility. Most people these days can’t afford uninsured motorists or underinsurance coverage.  Car accidents can definitely can be life changers.  The adverse driver can extinguish your claim in bankruptcy.  Even our personal injury clients are filing Bankruptcy because of the current downturn of our economy.   Are personal injury claims really an  exemption in Bankruptcy?  Extra work is needed when any party files for bankruptcy.  It’s part of the system, but takes up many hours and, sometimes, even Court appearances in Federal Bankruptcy Court. You really earn your fee on these bankruptcy involved personal injury cases.  We need to raise the financial responsibility limits in Nevada as was recently attempted by some in the State Legislature.

One lesson that I have learned over the years  is that you should always be honest and give full disclosures.  Don’t hide anything.  Don’t try to take advantage of anyone. Know where the line of ethical responsibility is and don’t cross it. Try to know if you have a bad case early on.  Get the facts so that you can evaluate the value of the case for settlement purposes and let the client know if there are issues with the case that will affect its value form the beginning.  Don’t cross the line of ethical responsibility just to win a case.

Today, the big advertisers aren’t trying personal injury cases.  Their litigation cases are referred to litigation groups perhaps without the actual knowledge or consent of the clients.  When was the last time that you saw any “heavy hitter” or “immediate compensation” attorney in courtroom?  The theory is that if you have enough cases, you don’t need to go to court: you can get  someone else to do that for you. We need to change this advertising.  If a  fee agreement is executed, the attorney should not be able to transfer the case to someone else for litigation without giving up his contingency fee.  I don’t like this change. It gives us all a bad reputation.

These are only a few of the changes that I have noticed  in the management and prosecution  of personal injury cases in the last 30 years.  I will cover more of these changes in another posting.


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