Potholes Cost Insurers, Consumers $27B

March 12, 2015

As you may have found out the hard way, hitting a pothole could damage your tires, wheels, shocks, or struts. Repairing that damage can be expensive. According to AAA, repair costs can range from $50 for a simple wheel alignment to $500 or more for replacing a top-of-the-line alloy wheel. Over the life of a car, insurance agents say that a driver can pay up to $2,000 or more in repair costs due to damage from poor road conditions

Poor road conditions have cost consumers and the insurance industry at least $27 billion over a five year period, according to a 2014 survey commissioned by Trusted Choice and the Independent Insurance Agents & Brokers of America.

The survey also reveals that from 2009 to 2014 half of car owners experienced damage to their vehicles as a result of potholes.

“The snow, ice and freezing rain during the rough winter months left their mark on the country’s roads,” says Robert Rusbuldt, Trusted Choice president and Big “I” president & CEO. “Severe potholes have led to accidents which may impact insurance rates, as premiums are determined by past claims, accidents and driving violations. Potholes and poor road conditions aren’t just an inconvenience, they are an expensive and dangerous result of harsh winters.”

The pothole survey also found that 31 percent of car owners who reported pothole damage to their vehicles filed a claim with their insurance company. A surprising 65 percent of respondents who needed repairs said they (or a third party) paid out of pocket for the vehicle to be fixed. Only about 3 percent said local authorities stepped in to foot the bill. For about 40 percent of respondents, that bill was more than $500.

The Auto Black Box

Could you cars black box be used against you in court or by your insurance company?Did you know that your car, if it is a 2005 or newer car has a 64 percent chance that it has an onboard black box just like an airplane that is recording everything you do?

                                                             

   Recordedstatement.net

Recordedstatement.net is a growing digital destination
for insurance claims professionals. We serve as a guide
to enhance the investigative quality of the recorded statement
process. We seek to provide the content, process improvement
and skill enhancement in this area.

HOW TO ELICIT RESPONSES
Wait at least 20-30 seconds for responses. Silence is acceptable
during a Recorded interview to allow interviewee time to think about
the question and their response. The more time you give interviewee
to think the higher level answers you will receive. There will be increased
interviewee participation.

Ask clearly worded questions and speak clearly when you ask them.
Only ask one question at a time.
Rephrase a question only after the wait time.
Don't answer your own questions.
Remember - pauses and silence is not a bad thing if properly placed
Ask open-ended, not just close-ended questions.
Ask divergent as well as convergent questions
Repeat the question, paraphrasing it
Ask probing questions
Ask for detailed descriptive information
Ask the question and then shut up
Don't ask leading questions
Know when to ask yes or no questions
Feedback then feed forward for clarity
Be prepared to answer why you asked the question
Know what is considered a inappropriate question
Use questions to establish rapport
Don't interrupt the interviewee

Policy Fraud Checklist

Loss within first year of cover Loss shortly before renewal/expiry of cover Loss shortly after increase in cover Notification of claim after policy lapse/cancellation Existence of multiple policies covering same loss Premium payment abnormalities Pre-loss enquiry re cover/claims circumstances Non-disclosure/misrepresentation Frequent changes of insurer Gaps in previous insurance history Evidence of significant over insurance/under insurance Policy arranged via agent far away from insured's home Poor claims history Claimant appears to be different from policyholder Questionable use of property/occupation at time of loss Evidence of pre-loss business/personal and/or financial problems

THOSE LITTLE TERMSby Robert Carper
SIU, SUBRO, BI, IA, RAC, CP, BOP, ARB are some terms we as insurance professionals use on a regular basis. We are familiar with this lingo and it is commonly an efficient way to communicate.

However, sometimes the customer, insured and claimants and others typically are confused and put-off by such terminology. As we all seek to enhance and improve the customer experience, we should try to eliminate these or minimize these terms in our customer communication. Many of these terms aren’t understood by the customer. As we verbalize such terms we may find in some cases the customer will find someone who does understand them which could mean the retention of an attorney, public adjuster or others who will possibly perplex the claim path to resolution. Often times plain English works best.

Remember, unless you have educated the customer in this area, acronyms privy to the insurance industry sometimes results in puzzlement for our customers.

SIU - Special investigations unit
SUBRO - Subrogation
BI - Bodily injury
PD - Physical damage
IA - Independent appraiser
RAC - Report of accident claim
CP - Commercial Property
BOP - Business Owners Policy
ARB - Arbitration

How is your insurance claims knowledge?
Try this 10 question self-grading test and you will know

(UN) Fair Claims Practices Act

Fair claims practices represents ultimate oversight
over the claims process. Bad faith is of concern when
handling claims but of equal concern is the fair/unfair
claims practices act. So just what is it?

The Unfair Claims Practices Act, also known as the
Unfair Claims Settlement Practices Act is legislation designed
to protect consumers from inappropriate conduct of insurance
companies.

The act permits insurance regulatory authorities to take legal
action against an insurance company that engages in certain unfair
claim settlement practices with such frequency that it amounts to
a general business practice. The eight core fair claims practices
components (depending on the state in which you handle claims)
are as follows:

You must acknowledge the claim
You must process claimant/Insured claim promptly
You can't misrepresent your policy
You can't influence other policy settlements
You can't force claimant/Insured to settle for less
You can't force the claimant/Insured to travel
You can't appeal excessive amounts of claims
You Can't refuse or delay claims without a plausible reason