Post Date March 29, 2012 – Most NJ Auto Insurance Companies and body shops recognize the more obvious causes of their problems. Thinking people in both industries have advocated more coöperation in correcting collision repair abuses by lost cost auto insurance companies. Unfortunately, however, laws governing both liability and collision auto insurance tend to discourage coöperation and promote an adversary relationship between two businesses which should be working together. Sadly; even when a major car insurance company rates are sufficient  and pays a body shop adequate funds to provide a first class repair; there are those dishonest repair facilities which will cut corners and provide used parts and poor quality work. As you can see; both the NJ car insurance industry and the NJ auto body shop business have their fair share of those looking the beat the customer out of what they paid for.

The size, vulnerability,  and ability of  New Jersey car insurance companies to obtain expert legal advice keeps them within the letter of the law. On the other hand, the size of most body shops not part of a national chain can do what they want and pretty much go undetected.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 27, 2012 – When you read a sad news story about a women whom what hit by a car, you automatically feel sympathy for that person.  Recently that very thing happened to a New Jersey  pedestrian.  As she stepped off  of the curb a car pulled came around the corner and struck the woman. All though she was knocked to ground and suffered bumps & bruises, she refused to be taken to the hospital and left the scene before the police could get her name for the police report.  The same day the women returned to work and failed to mention to her co-workers she was involved in a car accident.  I know what you’re thinking, she was already to file an auto insurance accident claim.

A few days later, the women claimed she slipped and fell and could not return to work. The following day she files a Workers Compensation Insurance Claim.  Although she went to see the company doctor and beyond a few bruises, the doctor could not find anything wrong. The following week the women sought the advice of a lawyer. It was quite remarkable but four new doctors found she needed a brace and was 15% disabled.  A law suit was filed and the women whom could no longer work oddly took a new job at a new company doing the same work she was doing before. The went on for about six months.  During that time she received a check from the Insurance Company and the Doctors treated her for her injuries. Prior to the court date, the insurance company was unable to contact the women at home on several occasions. They in turn hired an investigator. The insurance company received from the investigator a video of the women working at her new job and performing a number of tasks the doctor’s said she couldn’t. Further; they have video of her cutting her lawn and planting bushes and trees.  Faced with these videos in court;  the women was still awarded $100,000.00. The total cost to the insurance company including the Doctor’s bills and Comp Pay was $180,000.00.

In many cities across the country, not just in New Jersey, jury’s are more in tune to soaking the supposedly rich auto insurance companies than deciding cases on their merits. It’s always these same people whom complain their auto insurance rates are too high.  Sadly, the same auto insurance companies have been forced to settle these cases to control the cost of going to court and the jury’s whom don’t decide these cases fairly. If there is one medical term which can describe the salvation of the legal profession; it’s Whip-lash.  The next time you complain about your car insurance rates, don’t blame the car insurance company!

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date 3.23.12 –  Question: Are auto insurance premiums buying the maximum possible protection for PA and NJ Drivers, or is the car insurance system in these states full of costly coverage sharing leaks?  The underwriting losses in both Pennsylvania and New Jersey is running 75%. This means for every $100.00 an auto insurance company earns in monthly payment, they pay out $75.00 to repair automobiles and medical claims costs. This leaves 25% to pay sales expenses, business overhead and Auto Insurance Company underwriting profit.

There’s another side of the car insurance claims payment coin. The money paid in actual car insurance claims is split between the claimant, his or her lawyer, a doctor, the hospital and an auto body repair shop. Sadly; financial leaks do occur. Because of the many people involved, the overcharging of invoices and padding of bills is very difficult to isolate. Studies have shown, 20 cents of every claims dollar goes toward the payment of lawyers.  This is an amazing amount. The American Trial lawyers Association feels the cost is more like 11 cents.  If we even accept the lower figure, tens of millions of dollars a year normally earmarked for accident victims and their families is paid to their legal counsel.

A recent study has revealed only 14% of those involved in an auto accident seek the advice and retain legal counsel. Out of that 14%, only 5% file a law suit and less than 1% of those cases ever make it to trial.  Although it is generally known those at fault accident victims whom retain legal counsel do secure a larger settlement – they are only larger to offset the 25% to 50% contingency fee.  In reality, the claimant fares no better than if he or she had no lawyer.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 22, 2012 –  Delays in the Claims Settlement process can’t be always blamed on the Auto Insurance Company.  Accident Victims and their attorneys are also responsible for muddying the waters.  Delay in auto insurance settlement probably is truly distorted in the public mind.  When serious injuries, or even their possibility exists in the future, a competent lawyer will delay settlement until the full extent of the bodily injury or damage is known. This can delay settlement of an auto insurance claim from three to five years.  I very serious cases, cases can drag on from 10 to 15 years.

This by-product of the tort system may result in the best possible financial award to at fault accident victim, but it certainly doesn’t relieve the squeeze caused by loss of wages and mounting medical bills during  the period of a long litigation.  The problem can be relieved by a degree by the willingness of larger car insurance companies to advance medical payments and lost earnings. Car insurance Carriers will do this when a determination has been made an accident was the fault of their insured. In these cases, they will wait on the courts determination on payment regarding Pain & Suffering.

Another issue which causes delay in accident claims settlement is out court system. Both  Car Insurance Companies and Lawyers both agree congestion in our court system. There are a number cities which have severe traffic issues;  Boston, Chicago, New York, Philadelphia and oddly enough – St. Louis.  A number of Judges in the Los Angeles County Court System have streamlined court procedures and have erased a back-log of court cases.  Both executives at the Automobile Insurance Coverage Companies and Lawyers both agree the courtrooms are the most obsolete feature of the Tort legal System.  Many Judges are limited to hearing cases 3 to 5 hours a day. The balance of their time is spent studying rulings and preparing for court by meeting with both Defense and Plaintiff’s counsel.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 20, 2012 –  Admittedly, the inequity in no-fault auto insurance claims lies in the settlement of smaller claims. Under the no-fault auto insurance policy system, surveys  have shown one-half the claimants with losses of $2500.00 or less are fully compensated, one-third get substantially more than their loss actual amount, while one one-sixth receive substantially less than the actual loss  sustained.  This is in contrast to nearly three-fourths of those with an at fault accident claim exceeding $25,000 failed to collect 25% of their true  financial loss.  A Basic Auto Insurance Protection Plan , like they have in New Jersey, would cut benefits sharply on a majority car insurance claims.  A number of other features are nothing but a political hot potato.

At present,  hospital and medical costs may be recovered under a tort claim regardless of the benefits outlined in their own car insurance policy. State and Federal Courts hold that failure to pay any part of the property damage is a reward to the driver whom caused the at fault accident.  Under a No-Fault Car Insurance Plan, collateral benefits are deducted on the theory that no one should profit on a hospital bill.  Both approaches are valid legal principles depending upon whether car insurance is third person liability or first person compensation coverage.

-Mike  

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 19, 2012 –  So-called collateral benefits, the amounts collected through hospitalization insurance, sick leave pay, or similar lower cost benefits, would be normally deducted from the proceeds of the auto insurance policy claim.  As you may imagine, no-fault auto insurance coverage  is quite basic.  An injured homemaker or her child with no paid employment could only collect out-of-pocket medical cost subject to a policy deductible. Auto insurance underwriters of a no-fault car insurance policy plans foresee an insurance rate reduction of perhaps 25%  after a states complete adoption of the insurance program.  With no real car insurance underwriting experience to use as a guideline, the true cost of a car insurance claim is pure speculation. A reduction of 3% in administration costs is predictive;  but critics insist that administration of accident claims are truly more expensive and are likely to increase .  Insurance Associations are studying loss experience over a period of months and years to determine the true claims costs if a Basic No-Fault Insurance Protection Plan was mandated in a specific state.

With the identical compensation offered, lowered car insurance rates and little to no reduction in insurance claim costs, it becomes clear a no-fault insurance plans propose to split the same coverage-pie  into smaller portions. This would automatically remove 75% of all  At fault Accident cases from Tort System. In reality the percentage would be much higher since it is doubtful that many under-$1000.00 cases would be pursued in the states courts.  Of the money paid to settle bodily injury claims, under 85% goes toward the claims in the $100.-$10,000.00 bracket. Of course,the gate keepers of our legal system, Attorneys, would prefer people be completely responsible for their own mishaps. An auto insurance policy based on Full & Limited Tort would be the choice of most officers of the court.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 18, 2012 –  The theory legal liability for his or her actions induces a driver to be more careful is the foundation of the defenders of tort law and how it affects the auto insurance system. Trail Lawyers whom are the chief defenders of the present tort system also argue that every car owners should carry an adequate amount of auto insurance to protect at fault accident victims from their negligence. From a social viewpoint this is proper, but if all auto insurance carried the burden of all the liability, a driver would not pay for his or her negligence behind the wheel. In many states, an auto accident victim or claimant may sue the car insurance company directly so the driver whom is at fault completely escapes even the remote possibility of financial loss for his or her acts. From the victims point of view, the source of compensation is unimportant. It could come from the proceeds of car insurance policy or from the at fault drivers assets.  A recent study showed that only 3% of the drivers held liable in at fault accidents seldom pay any part of the accident costs from their own pocket.  However, up to 18% are liable for damages they are unable to pay for.  Still 80% of the claims are defrayed by the car insurance company. In the U.S., an at fault driver can collect no compensation other than minimal amounts for bodily injury.   Critics of  our car insurance system argue that a life time of lost earnings or poverty producing medical costs are too great a price to pay for a moment of negligence.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date March 17, 2012 –  In most states the present legal system knows no gray middle ground when it comes to an at fault auto accident.   Bottom line;  if it’s black – your Auto Insurance pays.  If it’s white – you collect from their auto insurance.  Seems simple enough, doesn’t it?  In actual practice, grays don’t exist.  Many At Fault Accidents are clearly the fault of one driver, but the damage might be less severe or the at fault accident averted, had the other driver used more caution or better judgement.  This is known as sharing in the fault or contributory negligence.  It voids the right to recover 100% of any damages in most states.  There are a handful of  states which recognize the practice of comparative negligence. Under this system a driver 25% at fault could collect 75% of his or her loss from the auto insurance company. The contributory negligence rule satisfies almost no one involved in an at fault accident situation.  Lawyers, specifically those representing a claimant are particularly unhappy sharing liability or property damage limits with anyone but their client. Many auto insurance companies prefer out-of-court settlements than negotiating percentage of blame or  allowing a judge or jury to decide the percentage of blame.

I recently called the claims manager and friend at one of our appointed car insurance carriers. She said when their insured is clearly involved in an at fault accident and the claimant is willing to make a reasonable settlement, a reasonable amount of contributory negligence is ignored.  It also can be used as a negotiating tool since proof that the blame is shared would void the claim in a court setting.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Today’s Post March 16, 2012 – The legal philosophy that a person is completely responsible for his or her negligence seems to be under heavy criticism these days. The question really is; “is a single moment of negligence responsible for a lifetime of lost earnings or poverty producing medial costs too great a price to pay?”.

Few drivers fully understand auto insurance.  As the need for financial responsibility has become a financial necessity, Auto insurance has come to be regarded as a means of reimbursing Bodily Injury and Property Damage resulting from the cost of At Fault Accidents.  Actually, this may not be entirely true.  Auto Insurance Liability Coverage protects the insured against a liability expense for his or her negligence. The Auto Insurance Company will completely fulfill its obligation when a release is signed by the claimant of the at fault accident.  This means, in the situation when a claim has been brought against a negligent driver and her or she maintains an auto insurance policy, the claiming party waives their right to bring suit against the negligent party personally.  They will accept the payment provisions of the negligent parties car insurance limits of liability as full and complete payment. At least one driver in any car accident cannot legally be reimbursed under terms of the typical car insurance liability policy.  This feature of our common law system is the reason for both spirited criticism and defense of the car insurance system.

Actually, the argument involves the principle of tort law. This legal philosophy that everyone is responsible for his or her negligence gave birth to the car insurance liability industry.  A major point of criticism is the number of motorists who are unable to recover losses resulting from bodily injury. A recent study of auto injuries shows that less than 37% were compensated under the tort law. Of the total, about 1/2 were the negligent drivers and their guests.  The remaining 15% probably had insignificant  claims. Among those seriously injured, only 45% were compensated under the terms of the state tort laws. Defenders of the state tort system argue that negligence deserves no reward and at fault drivers should not be compensated. They point to drunken drivers and road racers as beneficiaries of a system that compensates without regard for fault.

-Mike 

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Post Date  March 15, 2012 – Auto Insurance Companies never cancel a customer’s car insurance policy for no apparent reason. Widespread stories of individuals having their auto insurance policy cancelled for no apparent reason adds to the distrust many have for auto insurance companies in general.  The truth of the matter is, although you may disagree with the reason a car insurance company cancelled your policy, it’s never for no reason and all policy cancellations guidelines are mandated by the Department of Insurance in the state you live in.

The truth is; repeated at fault accidents and traffic violations, evidence if heaving drinks or DUI or false statements on an application for car insurance are among the top reasons for policy cancellations in the 21st century. By far the number one reason for car insurance policy cancellation in non-payment of premium. Many customers just wait to long to mail or make their payment online after the policy has expired.  Every insurance company regardless the type of coverage must provide you with a grace-period after the payment is due.  In many cases, again this depends on the state, an insurance carrier will provide you as much as 18 days after the due date to submit the premium payment due.  Some insurance companies will now allow you to reinstate your policy after the cancellation when you submit the payment. Of course, you will not be covered for any claims which occur during the short cancellation.  Example:  say you policy cancelled on the 1st of March,  you call our office and make the payment on the 14th.  Although your policy is now in force, if you hit a deer on the 1oth – we will not pay for the damage to your car.  On the other hand, If you hit a Deer on the 20th, that claim will be  covered.

Another reason for a policy cancellation you may feel is not fair is, the financial fitness of your agent.  Low Cost Auto Insurance Rate agents like InsureDirect.com are expected to maintain a profitable agency or what we call a “Book of Business”.  What is a Book of Business?  Simply put – it’s you.  The term goes back to the days of Benjamin Franklin when he started the first insurance company in 1752.  An insurance agent would maintain a journal or Book containing a written list of all the customers. Each page of the book represents a customer and the premiums he or she has paid the agent. The agent is responsible for sending those funds to the insurance carrier. The book would also outline the agents profit and loss.  The agent must collect more policy premium than is out paid in claims costs.  If an agent fails to do this, the agent’s relationship with that car insurance carrier is terminated.  Any policy maintained by that agent will be non-renewed and the customer will need to find alternative insurance coverage.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602