September 18, 2018

Archives for December 2009

Might Super Bowl Sunday Bring Super Claims to Adjusters?

WARNING: Football Helmet and Pads Could Make You Hot!!

In late January, the widow of NFL player Korey Stringer settled her liability claim and lawsuit with the NFL following her husband’s heatstroke death at the Minnesota Vikings training camp in the Summer of 2007. Stringer’s wrongful death lawsuit alleged that the NFL had not done enough to ensure that the equipment used by players protected them from heat-related injuries and deaths.

Strnger’s string of lawsuits included an earlier medical malpractice suit against the hospital that treated the lineman after e collapsed in the 100+degree heat. That lawsuit had already been settled.

But the lawsuits are not over. Still open is a claim and product liability lawsuit against Riddell Inc., the maker of the football helmet and pad. Apparently these products were defective because they lacked warnings to the effect that wearing helmets and pads in hot temperatures could be dangerous. Incredible!

Come to think of it, this could open the way to further litigation. Examples:
• Suits against General Motors for not putting written warnings on accelerator pedals.
• Litigation against Harley Davidson, for not designing motorcycles with roll-bars.
• A potential class action against Sarah Lee for irresponsibly baking with BUTTER for the last 30 years.

As Super Bowl Sunday approaches, hazards abound. That’s the bad news.

The good news: there are deep pockets to sue!

Recent studies show that Super Bowl Sunday brings a spike in drunk driving accidents and stomach ailments due to the mix of booze and bar food.

Further, doctors report that people who drink too much during the game and fail to go to the bathroom develop urinary retention, possibly warranting later catheterization. Come to think of it, most of the target audience for those Flomax commercials may be off making a head call at the very moment the ads air!

Other Super Bowl mishaps include:

• A guy getting so drunk he broke his teeth trying to open a beer bottle
• Fans who strained their backs while jumping up to cheer
• An upset fan so ticked off with his team’s performance, he tossed his TV set out the window of his third-floor window.

And we haven’t even gotten to the scourge of wardrobe malfunctions!

All these folks might form a class action lawsuit against the NFL, alleging that the League failed to warn them of the various hazards attendant with watching the game.

I just hope my cardiologist has adequate medical malpractice limits in case my ticker goes haywire while I’m watching that sexy PETA commercial …

Claim-Handling woes are prominent in Consumer Insurance Gripes

According to a recent study by the National Association of Insurance Commissioners, claim disputes and problems figure prominently among the reasons for consumer complaints. The top five reasons behind insurance complaints in 2008:

Claim delays 19.1%
Claim denials 18.4%
Unsatisfactory settlement/offer 14.2%
Premium & rating 4.7%
Cancellation 4%

What types of insurance generate the most claims?

Accident & Health 36.9%
Auto 36.7%
Homeowners 11.8%
Life & Annuity 9.5%
Commercial Multi-Peril 1.9%

Safe US Airways Landing May not Avert Claims Splash and Courthouse Dash

When I first heard of the miraculous landing of the US Airways Flight 1549 jet in the Hudson River two weeks ago, my first reaction was, “Oh boy – here come the lawsuits.” True confessions from a hard boiled cynical claims person. Even though each passenger survived the landing due to pilot “Sully” Sullenberger’s heroics, I assumed lawsuits would be filed. Grounds might include soft tissue injuries from the bumpy maritime landing, to mental anguish from fearing a crash to exposure to cold during the rescue process.

Now it looks like I may have been premature in my suit-happy assumptions. (See, “Savvy US Airways Pilot May Have Grounded Lawsuits,” http://www.insurancejournal.com/news/national/2009/01/23/97196.htm

Some say that the pilot may have not only averted a tragedy, he may have averted lawsuits. Moreover, flying into a flock of geese might be termed an “Act of God.” Still, I figured lawyers would find some theory of liability, like a different jet engine design would be more impervious to bird strikes, or that the aircraft lacked equipment to detect bird flocks or that the airport authority knew of the bird peril but failed to alert the airline. God forbid that there be no deep pocket to sue! This is, well, un-American!

Pundits are having fun with the splash, though, some suggesting that . . .
• US Airways’ new marketing slogan should be, “One if By Land – Two if By Sea!”
• Each flight will now have an on-board cruise director as well.
• To generate revenue for the cash-starved airline, US Airways might consider charging $25 apiece for each personal flotation devices used.
• All on-board music courtesy of the group, “Flock of Seagulls.”

Since all passengers and crew survived, we can now chuckle . . . at least until the Summons and Complaints are served.

Too bad the aviation lawyers cannot sue the geese, especially since it is rumored that the birds were distracted in flight by text-messaging each other … Alas, no liability coverage on the geese. (This coverage gap may be an issue befitting the Loyal Order of the Blue Goose, come to think of it.)

Other aviation lawyers are having none of the “Act of God” spiel. By golly, there has got to be someone to blame! (Better still if they have liability insurance coverage.) I often quote the anonymous sage who once said, “Death is not the end; there remains … the litigation.”

When it comes to aviation mishaps, perhaps we can say the same about safe landings.

Two Insurers Make Business Week List of “Top 25 Service Champions”

Business Week just featured its annual ranking of the nation’s top 25 “Customer Service Champs.” (Number One: Amazon.com). What caught my eye though was that two insurance companies made the list.

Weighing in at #2 — in hot pursuit of Amazon, was USAA.

Coming in at #15 – Amica Insurance Company.

It is hard to tell how much claim service entered into these rankings. The commentary on USAA was that it handled 150,000 “cat” claims in 2008, twice its average. It enjoys a 96% retention rate, so it must be doing something good in the claims area.

Amica is lauded for investing in new technology to speed claim processing. It also notes Amica’s investment in staff and its employee turnover rate which is a measly 7% per year.

Claim service appears to be one path toward becoming a service champion!

Flo and Progressive’s Concierge Service Raises the Bar for Claims-Handling

“Flo” is the irrepressible salesgirl with the tricked-out name badge in Progressive’s TV commercials. I was struck recently by one that touts Progressive’s “concierge” claim service. Many insurance commercials spout vagaries and platitudes but not too many spotlight claim service as a competitive differentiator. I am happy to see this. It comes down to more than saving 15% in 15 minutes or less.

In Progressive’s commercial, the insured brings in his damaged car, rings a call bell and a team of attendants rush out to get him a new replacement loaner. Concierge service indeed!

Apparently Progressive has even patented the process of “concierge claim service.” That process involves the policyholder reporting a claim and then,
• Dropping the damaged car off at a Progressive concierge claim center
• Driving off in a rental car
• Progressive writes a repair estimate and engages a repair vendor to come get the car, fix it and return it
• The insured is notified to come back and pick up the repaired car, which has by then been quality inspected by Progressive

Disclosure: I am not a Progressive customer or shareholder. In fact, my car coverage is with one its direct-writing competitors. I also doubt that the process always works to inspire rave reviews by policyholders.

Nevertheless, I applaud any carrier’s effort to compete on something other than price, to compete on service – namely claim service! Maybe it can inspire other insurers to raise the bar to develop their own functional equivalents of concierge claim service.

Now, if only Progressive could get Flo to use a bit less eye-makeup!

Practice Checklists: If Surgeons Can Benefit, Why not Adjusters?

This week a number of articles emerged about how simple surgery checklists improve patient care, save lives and reduce adverse patient outcomes. (For starters, see http://www.time.com/time/health/article/0,8599,1871759,00.html)

The idea is that before surgery, the surgical team as a group completes a checklist that includes
• Verifying the patient’s identity
• Confirming the site and type of surgery to be performed
• Confirming availability of backup blood supply “just in case”
• Post-surgery – accounting for ALL sponges used during the procedure

A recent study published by the New England Journal of medicine shows that the use of such checklists can cut patient mortality rates nearly in half and complications by over one third.

This has implications not only for medical malpractice risk management and claim defense, but may have broader implications for claims handling and management across the board.

For example, if surgeons can improve their own risk management practices by using checklists, perhaps a claim offices can as well. Does your claim office have as resources checklists readily available for of the claim staff, checklists that are customized to handling all of the various types of claims that come across you were desks?

Yes, I can anticipate retorts that good claims handling amounts to much more than just working from a punch list were a checklist. I also anticipate surgeons arguing that good medicine involves much more than simply working one’s way down a punch list or a checklist.

Fair enough. Nevertheless, as a framework for surgical practice or adjusting practice, perhaps there is a kernel if not more than just a kernel of a sound idea here.

How many client lapses were botched assignments might have been averted had the adjuster had access to and used a thorough checklist that encompassed all of the major contours of claim handling?

If it works for surgeons, why not for claims adjusters?

IKEA Gets no Discount on This Jury Award

“You know what the word `IKEA’ really means when translated from Swedish?” asked comedian Jay Leno recently.

The answer: “Cheap particle board.”

Though the audience laughed, it is likely that few IKEA personnel are laughing over a recent jury hit that the retailer just took in the Washington D.C. area.

A Fairfax County (VA) woman was just awarded $3.2 million in damages for injuries she suffered in 2006 when a 350-lb. stack of countertops fell on her in one of IKEA’s Woodbridge, VA stores. The plaintiff, Xiaolie Zeng, suffered four fractures of her pelvis and alleged permanent injuries.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/14/AR2009041402882.html

Fairfax County, VA — which happens to be my home – is not known for having excessively liberal juries. From a defendant’s point of view, it is considered a fairly favorable jurisdiction. If you have a choice locally to be a defendant in Washington D.C. or Fairfax County, you definitely want your case in Fairfax County. This is no Robin Hood, “rob the rich to pay the poor” area.

It sounds as though liability here was pretty clear. The customer had been looking for a table, but did not find one that she liked Near the Exit, she stopped at the “As Is” section of leftover or bargain items but did not touch any of them. A stack of four particle-board counter tops and inside door collapsed on Ms. Zeng.

Given the clear liability, it is hard to see why IKEA did not settle the case and let it go to a jury. The article says the special damages were about $150,000. We do not know the plaintiff’s pretrial demand. Perhaps it was so high that IKEA felt that, even with a finding of liability, it stood a good chance of doing better than paying the demand.

That demand may be looking better now.

I Guess She Couldn’t Sue God

“Michigan Church Faces Second Trial Over Fall at Altar” reads the headline from the Associated Press. (For the full story, http://www.claimsjournal.com/news/midwest/2009/04/13/99550.htm). Apparently Judith Dadd of Lansing, MI is suing her place of worship, Mount Hope Church. The suit flows from a July 2002 accident when she was overcome by the holy spirit, fell backwards and hit her head on the floor.

Her theory of liability: the church should have had an usher positioned there to catch her fall. That leads to an interesting idea, where churches might engage one “spotter” for each celebrant who is overcome with the holy spirit. The pews and aisles might be packed that way.

As a footnote, Ms. Dadd has added a defamation claim, saying her pastor has been wrongful stating that her injury was faked. Imagine that!

If you are the adjuster assigned to this claim, maybe one red flag would be the list of itemized special damages including a hefty bill from a faith healer …

“Michael Clayton” and the Tao of Claim Defense

OK, so I’ll confess don’t get to the movie theaters much.

($11 a ticket PLUS $8 popcorn? Are you kidding?!) But the wife and I watch plenty of movies on DVD, courtesy of Netflix. I know that time-wise I’m behind the curve here but last night I finally got around to watching and enjoying “Michael Clayton.” I had not realized that the movie centered on a product liability case, a class action involving a weed-killer and a mythical Nebraska-based company called U-North.

Some highlights of the plotline which may interest those in the claims realm:

• Bad documents can sink your defense (though how did these stay suppressed and secret so long?)
• Lead defense counsel strips down to his underwear during one plaintiff’s deposition (lending a whole new meaning to the phrase, “legal briefs”). Also, why did the lead defense counsel in this role have to be played by Tom Wilkinson instead of, say, Charleze Theron, just to pick a name at random.
• Defense firm of Kenner, Bach & Ledeen dances a jig when it hits 30,000 billable hours on the defense of the carcinogenic weed-killer. Yippee!
• Product defendant plays hardball on a whole new level.

OK, it’s Hollywood. I get it.

Nevertheless, if you work in the vineyard of liability claims, you may get a hoot out of “Michael Clayton.”

Why Adjusters Matter!

Peter Crosa is the President of his own independent adjusting company and private investigation firm based in the Tampa, Florida area. Among other things, he writes a periodic blog titled, “An Adjuster is What an Adjuster Does.” Lots of good stuff in there! There are very few people in the industry that I read and then kick myself, saying, “Boy, I wish I had thought of that!”

Peter falls into that skill category.

Recently, Peter’s missive discussed why claims adjusters fulfill a positive societal role. It is one of the best — perhaps THE best – “Big Picture” perspective I have ever read on why claims people have reason to be proud and to hold their heads up high with regard to their chosen profession.

Too many times claims people have a permanent inferiority complex. I confess that I have often referred to claims as the Rodney Dangerfield’s of the insurance industry. I say that more as a description rather than legitimizing that sad state of affairs. Nobody entered the claims business for its prestige, high pay or cache during cocktail party introductions.

If as a claims adjuster you ever wonder whether you are making a difference by doing your job, please consider and ponder the following excellent articulation as to why adjusters matter. The following segment is reprinted with permission from Peter Crosa:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

What have you given back to society? Is your community better off because you’re in it? If you’re an adjuster, the answer is yes. Here’s why.

You are given the responsibility to investigate and adjudicate contractual obligations and torts between citizens. Every claim you resolve before a law suit is filed, saves the cost of a trial. The cost of a trial includes the cost of the courtroom facilities and utilities, salaries of the courtroom staff, attorneys, jurors, witnesses and experts. It saves the time, sometimes several days, of the lives of countless people that would have participated in the trial.

So, just in case you ever feel embittered, embattled and unappreciated; just in case you get the feeling your supervisor is ready to throw you under the bus at any moment; and just in case you feel like adjusters are the un-loved step-child of the insurance industry, remember what an adjuster does.

And don’t forget to pat yourself on the back every now and then for a job well done; for being equitable and ethical. You do make a difference in this world and so does the adjuster sitting next to you. Pat them on the back too. That’s what an adjuster does.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Well said, Peter and Amen!

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