The Personal Injury Protection Guide for Providers

PIP

By Lauren E. Adler, Attorney at Law

If your patient is treating from a car collision, Personal Injury Protection Insurance (also known as PIP) is one way that your services are paid for.  We advise providers and patients alike to double check—and then triple check—that PIP is listed on the declaration page of their auto insurance policy.  If you don’t have it, add it.

PIP is great because it covers medical treatment more broadly than many health insurance policies.  To the extent of your patient’s PIP limits of at least $10,000 (the mandatory minimum that auto insurers in Washington must offer), there are fewer restrictions on what is covered, no in-network/out-of-network distinction between providers, no copays, no deductibles, and no annual visit limitations.  According to the Revised Code of Washington (RCW) 48.30.010 and the Washington Administrative Code (WAC) 284-30-395, the statute and rule which establish the legal standards for prompt, fair and equitable settlements by insurance companies for PIP claims, a bill submitted under PIP can only be denied if the treatment (1) is not reasonable, (2) is not necessary, (3) is not related to the collision, or (4) occurs after 3 years of the collision date.  WAC 284-30-395 provides, “These are the only grounds for denial, limitation, or termination of medical and hospital services,” under PIP.

PIP covers any person named on the auto policy, as well as household members.  Any passenger in the insured car is covered, as well as any pedestrian or cyclist involved in the collision.  Furthermore, a patient is not limited one layer of PIP coverage. If the patient has their own auto policy, that PIP comes in as a secondary layer.  Depending on the situation, there could be multiple layers of PIP available, depending on the patient’s own policy and their role in the collision – owner, driver, passenger, pedestrian or cyclist.  If you are unsure about a patient’s potential PIP coverages, we recommend the patient consult with an attorney.

If your patient is treating from a collision caused by someone else, save yourself the energy of sending bills to the at-fault driver’s insurance company.  The at-fault insurer is not responsible for a dime until the patient’s injury claim is ready for settlement.  PIP, on the other hand, pays medical bills on an ongoing basis.  So even if your patient is not at fault and it seems counterintuitive to send the bills to the patient’s own insurance company, all bills go to PIP.  When PIP runs out, the patient’s health insurance is next in line to pay.

All of this may sound well and good, but it often isn’t smooth PIP sailing.  Insurers are always cooking up creative ways to deny bills and to discourage drivers from obtaining, or increasing, PIP coverage.  While Washington state law requires insurers to offer PIP insurance, insurers make it very easy for drivers to “waive” their right to PIP by simply clicking a “rejected” box on the insurance application.

Below, we happily debunk some of the myths insurers would love you or your patients to believe about PIP.

  1. If you have health insurance, you don’t need PIP.

False.   PIP is not extraneous – it is protective.  As long as treatment is reasonable, necessary, and related to the collision, PIP must pay for the care.  Therapy visits are not limited per the terms of a PIP policy like they frequently are in health insurance policies.  Because PIP is more expansive in terms of medical treatment covered, often times it is absolutely necessary to have, especially for patients who could not otherwise afford to pay out of pocket for treatment that goes beyond their health insurance allowance.   Moreover, PIP insurance covers wage loss and household services expenses the patient may incur as a result of the collision.

  1. The adjuster is the final authority on whether your patient has PIP coverage available to them.

False.  Just because the adjuster tells your patient there is no PIP coverage on his or her auto policy, that isn’t necessarily the final word.   Under Washington state law, insurance contracts are interpreted in favor of the insured, not the insurance company, so the insurer has the burden to prove that they offered PIP but the patient rejected it.  The rejection must be signed in writing by the patient, so the adjuster simply saying that there is no PIP available is not good enough.  Your patient should demand a copy of the signed waiver.  If the insurer cannot produce it, the adjuster must open a PIP claim for a minimum of $10,000.

  1. PIP does not cover “palliative” care.

False. Whether treatment is “palliative,” i.e., will not ultimately cure the patient, is not relevant.  Under the law, what matters is whether the treatment is (1) reasonable to address the injuries, (2) necessary to treat the injuries, and (3) related to the collision.  If it is all three, PIP is obligated to pay.  RCW 48.30.010; WAC 284-30-395.

  1. The patient must sign a release allowing the insurer unrestricted access to all medical records.

False. The patient does have a duty to cooperate with the PIP insurer, so they do need to allow the adjuster access to records for collision-treatment if it is requested.  However, the adjuster needs only enough to determine that treatment is reasonable, necessary, and related to the crash.  We recommend a careful review of any release your patient signs, especially if the patient has a long history of treatment, to ensure the insurer does not get full access to the patient’s entire history and file which could be used against them to cut off care.

  1. The adjuster can make their own medical determinations.

False.  Medical opinions, such as whether your patient’s injuries are from a prior condition, whether your patient is getting too much treatment, or whether your patient does not need further care, must be made by a medical practitioner.  If the adjuster decides to cut off your patient’s PIP, that decision must be supported with a medical opinion from a similarly licensed healthcare professional.  If the adjuster asks your patient for an exam, called an Insurance Medical Exam, is usually a sign that the insurer is gearing up to cut off your patient’s PIP.

  1. PIP coverage ends when the patient improves enough.

False.  PIP covers care until it is no longer reasonably necessary, or until coverage runs out. The insurer cannot close a PIP claim because a patient is able to go back to work, or is somewhat improved.

The attorney team at Adler Giersch is experienced at navigating PIP insurance issues. If your patient has been put on notice that they will need to attend an IME, or is getting the runaround from their PIP insurer, let us know and we are happy to advise.

 

The Emerging Privacy Invasion from the Insurance Industry

By Jacob W. Gent, Attorney at Law

The auto insurance industry have begun implementing programs to provide more personalized quotes based on the actual driving habits of consumers through the use of auto tracking devices.  And some insurance companies are offering consumers financial incentives in the form of discounts, as much as 30% off premiums, to entice customers to install these tracking devices on their vehicles.[1]  Before deciding to enroll in such a monitoring program, one should stop and consider the motivation and risk behind these offers.

The birth of tracking devices is the offspring of “telematics,” the merger of telecommunications and infomatics, enabling the insurance industry to move closer to a “Pay How You Drive” business model that can calculate premiums based the driving habits of the policyholder.[2]  These devices are installed in your car and records information such as vehicle speed, acceleration and braking rates, cornering, miles driven, vehicle location and route driven, time of day the vehicle is driven, and other vehicle operational information such as fuel consumption.[3]  Telematic systems may be linked through your smart phone, connected to a vehicle’s infotainment system, or plugged in to the On-Board Diagnostics (OBD) port.

While the allure of cheaper rates for car insurance is appealing, make no mistake: insurance companies are out to earn profits, huge profits.  No matter how neighborly, caring, or friendly their advertising scheme may be, auto insurers will be able to search the data collected through telematics to show you are a “risky driver” in order to raise your rates.  And with telematic tracking devices voluntarily installed in a customer’s vehicle, the easier it is for insurers to charge higher premiums.[4]

The criteria you must satisfy to receive any premium discount is determined exclusively by the insurance company and subject to change at any time.  Moreover, insurance companies do not guarantee any discount when you enroll in these monitoring programs.  According to Progressive’s Snapshot Common Questions FAQ:

“Most Snapshot customers earn a discount based on their safe driving; however, riskier driving based on [driving habits that] indicate a greater likelihood of being in an accident and may result in a higher rate at renewal.”[5]

This means that your premiums will be set based on a projection of a collision, not on data of an actual collision.  Progressive was the first auto insurer in the United States to start using a telematics tracking system.  Beginning in 1998, Progressive rolled-out the “Snapshot” program Copy of March 2017 Advocate Article to incentivize good driving habits by offering discounts to safe drivers.[6]  Initially, the data collected by Progressive was only used to determine whether a policyholder qualified for the advertised discounts.  But starting in 2013, Progressive began using telematics data to adjust and increase rates based on driving behavior.[7]

Progressive claims 80% of its policyholders would benefit from the Snapshot program, but interestingly only about 25% of their customers participate in the program.  Similarly, Allstate reported to the Wall Street Journal that approximately 30% of its customers participated in its Drivewise program.[8]  Apparently, not all drivers are eager to give insurance companies access to more of their personal information, such as where they drive and when.

The reluctance of many consumers to sign on to these insurance industry programs has something to do with well-founded privacy concerns.  Advertisers, and the data brokers who sell information to them, track consumers’ virtual footprints online while banks and credit card companies track when and where customers shop, and retailers monitor and market to consumer buying patterns.[9]  Monitoring when and where a person drives can feel especially intrusive to the American consumer, where the idea of the “open road” is synonymous with our general notion of freedom.

Even more concerning is the question of who else might gain access to this information.   According to Jeff Wright, Vice President of Usage Based Insurance at Liberty Mutual:

“Liberty Mutual values and respects our customers’ privacy.  We will not share personally identifiable usage data we collection with any third party except to service our customers’ auto policies, for research, or as required by law.”[10]

The assurance of protecting privacy in the first part of the sentence is voided by the phrase “except to service our customers’ auto policies, for research, or as required by law.”  That latter statement is vague enough to allow insurers to do what they want with the data.  For example, the phrase “required by law” means your personal data could be subject to subpoena by a court or provided to law enforcement agencies to comply with state or Federal laws, which may have nothing to do with an individual’s driving habits.[11]

Many theorize that it is only a matter of time before insurance companies require telematics devices be used on every vehicle before issuing a policy and that certainly appears to be the trend within the automobile manufacturing industry.  According to a white paper by IHS Technology published in 2011, it is predicted that “by the end of 2018, the percentage of new cars available for sale in the U.S. Market with embedded telematics will soar to 80 percent.”  A 2013 report by ABI Research stated “global insurance telematics subscriptions [are predicted] to grow at a compound annual rate of 81 percent from 5.5 million at the end of 2013 to 107 million in 2018.”[12]  Once the use of these tracking devices becomes mandatory, insurance companies’ profits will soar as they constantly monitor their customers’ behavior.  Until that time, be sure to read the fine print before voluntarily agreeing to participate in any insurance monitoring program to decide whether the possible savings is worth the privacy you are giving away.

Next time you think, “Why not? It may save me a few bucks…,” stop and consider the motivation and risk behind the offer.  The attorneys at Adler Giersch are as committed to advocacy for our clients as we are on staying abreast of developments in the insurance, legal, and medical worlds that impact all of us.


[1] Consumerist; https://consumerist.com/2016/01/11/some-drivers-dont-want-insurance-companies-tracking-them-even-if-it-means-discounts/

[2] Digital Trends; https://www.digitaltrends.com/cars/how-telematics-may-affect-your-auto-insurance-rates/

[3] Allstate.com; https://www.allstate.com/tools-and-resources/car-insurance/telematics-device.aspx

[4] Digital Trends.

[5] Progressive.com; https://www.progressive.com/auto/snapshot-common-questions/

[6] US News & World Report; https://cars.usnews.com/cars-trucks/best-cars-blog/2016/10/how-do-those-car-insurance-tracking-devices-work

[7] Id.

[8] Consumerist.

[9]  Id.

[10] Digital Trends.

[11] Id.

[12] Digital Trends.

Promising Developments for Survivors of Traumatic Brain Injury: New Studies Link Increased Physical Exercise with Enhanced Neuroplasticity

By Melissa D. Carter, Attorney at Law

 

“They thought that the brain was too sophisticated for its own good.  That during evolution it became so complex that it lost the ability to repair itself and to restore lost functions or to preserve itself.  They were wrong.  Because it turns out that its very sophistication can be the source of a unique kind of healing…the brain’s way of healing”

Doidge, Norman, MD, Introduction.  The Brain’s Way of Healing: Remarkable Discoveries and Recoveries from the Frontiers of Neuroplasticity.  James H. Silberman, New York, 2015.  Print.

The human brain consists of approximately 100 billion neural cells.  Until fairly recently, the prevailing wisdom was that people are born with a finite number of brain cells and that they will not regenerate once dead.  However, we now know that certain areas of the brain under very certain circumstance have the potential to generate new cells (called neurogenesis) and create new neural pathways, often referred to as “neuroplasticity.”  Neuroplasticity is the ability of the brain to change and adapt in response to experience.  This understanding has led to many exciting developments in brain science, and in particular, in relationship to brain injury recovery.  Current understanding is that there are two types of brain neuroplasticity:
  1. “functional”: which is the ability of the brain to move functions from a damaged area to undamaged areas; and
  2. “structural”: which is the brain’s ability to morph  its physical structure as a result of learning.

Neuroplasticity, if it occurs, can be an important piece of recovery following a traumatic brain injury, and can play a role in both cognitive and physical rehabilitation following brain injury. Part of brain rehabilitation is aimed at trying to rebuild connections among the nerve cells, or neurons. This “re-wiring” of the brain, according to theory and practice, may under certain circumstances, make it possible for part of a previously damaged function area to be assisted by another, undamaged area. The connections among the cells, at times, appear to be receptive to this type of change and expansion.

The brain’s plasticity is influenced by many variables, including diet, exercise, cognitive engagement, emotional state, sleep and stress level.  Evidence from both human and animal studies suggests that certain types and degrees of enhanced physical exercise can help facilitate neuroplasticity of certain brain structures, including enhanced cognitive function responses, as well as affective and behavioral responses. As researchers get closer to understanding neuroplasticity and brain injury, the developments may have far reaching impacts on brain injury recovery and rehabilitation.

A recently published special paper in the journal Neural Plasticity looked at multiple recent studies from the past 12 months and seemed to connect certain types of physical exercise with growth of new brain cells, increasing memory center, improving IQ scores and theorizing the possibility of preventing brain deterioration as one ages.  The paper cites 6 different international studies that used brain scans, EEG recordings, blood sampling and saliva sampling to investigate the exercise-induced brain activity and volume changes in different brain areas, including frontal and central regions of the brain, the hippocampus, cerebellum and motor cortex.  The studies looked at the impact of a variety of physical exercise, such as dancing, playing handball, walking or cycling.  The outcome variables referred to cognitive (memory consolidation) and motor performance measures.[1]   The results of the multiple studies suggest that physical exercise may play a role in triggering neuroplasticity and, thereby, could possibly enhance an individual’s capacity to respond to new demands with behavioral alterations.

Lifestyle strategies proven to promote neurogenesis include:

  • Interval training exercise;
  • Reducing overall calorie consumption;
  • Reducing carbohydrate consumption (especially grains and sugars);
  • Enough healthy fat consumption to eliminate insulin resistance; and
  • Enough high-quality omega-3 fats and eliminating damaged omega-6 fats (processed vegetable oils).[2]

Advances and developments in rehabilitation in the area of brain health are ongoing.  At Adler Giersch, we remain devoted in our drive to study, learn, and advance the understanding of traumatic brain injury, rehabilitation and treatment options so that we can provide the best legal representation to our clients.  If we can be of assistance, simply contact us via email or give us a call.


[1] https://www.hindawi.com/journals/np/2016/3643879/ Neural Plasticity, Volume 2016 (2016), Article ID 3643879, 3 pages “Neuroscience of Exercise: Neuroplasticity and Its Behavioral Consequences.” Henning Budde, Mirko Wegner, Hideaki Soya, Claudia Voelcker-Rehage, and Terry McMorris.
[2] http://articles.mercola.com/sites/articles/archive/2015/01/15/neuroplasticity-brain-health.aspx

The Power of Healing Sleep After a Traumatic Personal Injury

By Steven J. Anglés, Attorney at Law

People suffering from sudden injury following a traumatic event find themselves dealing with a host of issues from the injury, beyond obvious pain: stress, work problems, anxiety, household concerns, and burdened family obligations.  One common thread we hear over and again is that the person injured “just can’t sleep.”  A common consequence of a traumatic personal injury is the interruption of normal and restful sleep cycles.

Disturbed sleep can of course be from the inability to get comfortable due to pain, or it can result from the inability to calm one’s mind after experiencing the event, resulting in conditions such as post traumatic stress disorder (PTSD). This can also disrupt the body’s regular and predictable rhythm sleep cycles, making it more difficult to recover from the initial injury. A recent study helps answer the question of whether sleep within 24 hours after a traumatic event actually helps in the mental processing of stress and trauma, or, instead solidifies emotional reactions and memories of the traumatic event, leading to what is known as “intrusive emotional memory formation”.[1]

THE STAGES OF SLEEP

First, it is important to revisit the various stages of the sleep cycle[2]. In healthy adults, sleep typically begins with what is known as “NREM” sleep, or non-rapid-eye-movement sleep. NREM sleep can be broken down into three distinct stages: N1, N2, and N3. The N1 stage often lasts just one to seven minutes, with the N2 stage lasting 10 to 25 minutes, while the N3 stage generally lasts 20 to 40 minutes, and is referred to as “slow-wave” or “deep” sleep. As these stages progress, brain waves slow down, become more synchronized, and eyes remain still. Finally, the typical sleep cycle results in REM, or rapid-eye-movement sleep, which comprises about 20 to 25% of total sleep in typical healthy adults.

THE STUDY

Researchers at the Department of Psychology at the University of Zürich and the Psychiatric University Hospital Zürich performed an interesting study, published in December 2016[3]. 65 healthy participants were asked to view several pieces of film in a laboratory setting: one which was considered “neutral”, and one considered to be “traumatic”. The study participants were then randomly assigned to either a group that slept after the film viewing or a second group that remained awake instead. A portion of the participants in the sleep group were fitted with electroencephalograms (an electrophysiological monitoring method to record electrical activity of the brain, commonly known as an “EEG”). The participants were then asked to record the images that troubled them for several days in a diary, causing them to see the trauma in their mind’s eye, reawakening unpleasant feelings and thoughts. The quality of these memories were thought to resemble those of patients suffering traumatic injury, such as patients who experience PTSD.

Although all of the study participants reported experiencing intrusive memories in the week after viewing the traumatic film, the group that slept within 24 hours of the distressing film experienced fewer and less severe levels of traumatic memories compared to the group that did not sleep. As the week following the viewing went on, the effects became more pronounced. The group that slept spent longer in the N2 stage of sleep, as opposed to just the N1 stage. This group also showed a lower number of fast parietal sleep spindles[4] on EEG, and more rapid eye movement.

WHAT DOES THIS STUDY POSSIBLY MEAN?

The study’s results suggest that patients who sleep soon after trauma may experience fewer and less distressing recurring emotional memories than those who do not sleep. As a result, sleep may have a protective effect in the aftermath of traumatic experiences by weakening emotions connected to an existing memory, providing context for traumatic recollections, and help processing the information before it is stored in long-term memory. These important implications can help offer an early, less-invasive alternative to minimize traumatic memories following the injury.   People suffering from impaired sleep or traumatic memories following such an event should always seek help from a medical professional.

WHAT CAN BE DONE TO IMPROVE SLEEP?

Changes in behavior and environment are the first line to treating sleep difficulties. Here are some tips for changes related to the daytime and nighttime.

Daytime Suggestions

  • Set an alarm to try to wake up at the same time every day.
  • Include meaningful activities in your daily schedule.
  • Get off the couch and limit TV watching.
  • Light aerobic exercise every day, as able. People with TBI who exercise regularly report fewer sleep problems.
  • Try to get outdoors for some sunlight during the daytime. If you live in an area with less sun in the wintertime, consider trying light box therapy.
  • Don’t nap more than 20 minutes during the day.

Nighttime Suggestions

  • Try to go to bed at the same time every night and set your alarm for the next day.
  • Follow a bedtime routine. For example, put out your clothes for morning, brush your teeth and then read or listen to relaxing music for 10 minutes before turning out the light.
  • Avoid caffeine, nicotine, alcohol and sugar for five hours before bedtime.
  • Avoid eating prior to sleep to allow time to digest, but also do not go to bed hungry, as this can also wake you from sleep.
  • Do not exercise within two hours of bedtime but stretching or meditation may help with sleep.
  • Do not eat, read or watch TV while in bed.
  • Keep stress out of the bedroom. For example, do not work or pay bills there.
  • Create a restful atmosphere in the bedroom, protected from distractions, noise, extreme temperatures and light.
  • If you don’t fall asleep in 30 minutes, get out of bed and do something relaxing or boring until you feel sleepy.

WHAT IF THE SLEEP DIFFICULTIES CONTINUE?

If your sleep problems persist, talk to your doctor to explore safe and effective solutions. Evaluation of sleep problems should include a thorough history of such problems, medication review, an assessment of your bedtime routines, and a comprehensive medical evaluation. Before recommending any action, your physician will explore with you a variety of possible causes for your sleep problems, including pain, post-traumatic stress, anxiety or depression. If necessary, he or she may recommend a polysomnographic evaluation (also known as a sleep lab). Based on your symptoms, medical history and specific needs, your doctor will be able to make a personalized treatment plan to help you achieve restful sleep, including non-medication, medication, and even natural remedies.

If sleep problems are related to a traumatic injury, then a consultation with an experienced personal injury attorney may reduce stress by answering questions and providing guidance in a sometimes difficult and confusing legal and insurance process.

 


[1] http://neurosciencenews.com/sleep-trauma-psychology-5732/

[2] http://healthysleep.med.harvard.edu/healthy/science/what/sleep-patterns-rem-nrem

[3] “Effects of Sleep after Experimental Trauma on Intrusive Emotional Memories” by Birgit Kleim, PhD; Julia Wysokowsky, MSc; Nuria Schmid, MSc; Erich Seifritz, MD; and Björn Rasch, PhD in Sleep. Published online December 2016 doi:10.5665/sleep.6310

[4] A sleep spindle is a burst of brain activity that occurs during stage to sleep. It is considered to be a period where the brain is inhibiting processing to keep the sleeper in a more tranquil state.

Insurance Premiums and the Myth of Liability Insurance “Crises”

By Jacob W. Gent, Attorney at Law

Imagine an industry that sold a product so important that each and every person and business in America needed it.  A product so important that the industry could threaten a state’s economy by pulling it from the market.  An industry not accountable to any federal agency, regulated only by often powerless state agencies, and exempt from anti-trust laws that police price-fixing and collusion with competitors. Add to this: this industry is legally permitted to keep its financials secret from regulators, law makers and the public; allowing it to advance its own political and legislative agenda at the expense of the American public.

This industry exists.  It is the property/casualty insurance industry which provides auto and homeowners insurance for individual consumers, medical malpractice insurance for physicians, and liability insurance for businesses and local governments.

Over the last four decades, the insurance industry has manufactured so-called “liability insurance crises” to drastically raise premium rates making insurance unaffordable or unavailable for many individuals, businesses, and professions.  During each of these “crises,” the insurance industry blamed a ‘litigation explosion/runaway jury award epidemic’  to justify rate hikes and called upon lawmakers to enact ‘tort reform’ laws which strip away victims’ rights and impose unjustified and crippling caps on damages juries can award to victims. These reforms, they argued, were the only way to reduce escalating premiums.

Yet studies have shown that there is no evidence to support the “litigation explosion/runaway jury award” argument.[1] Nor is there any evidence to prove that the passage of tort reform laws has reduced insurance premiums.[2]

For example, tort reform measures enacted in the mid-1980’s failed entirely to lower insurance rates in the following years, despite the promises to legislature and the voting public that it would.[3]  Indeed, states with little or no tort law restrictions saw similar changes in insurance premiums as compared with states that had not imposed significant restrictions on victims’ rights.[4]

Contrary to the industry’s justification; it is not a ‘litigation explosion’ which caused rate increases but the industry’s own “boom and bust” economic cycle at the root of the alleged “liability insurance crises.”  Due to anti-competitive (yet entirely legal) underwriting practices and the relatively unchecked power in setting premium rates and establishing reserves for future claims payments,[5] insurance companies  undergo a self-made cycle of “hard” and “soft” markets.[6]

To understand this boom and bust cycle, one must first understand that insurance companies make the most of their money from investment income by investing premium dollars received from policyholders in the stock market.  Specifically, they invest the “float” that occurs in the time between when premium dollars are received by the insurer and when losses are paid out by the insurer.[7]  Insurers engage in fierce competition for market share and premium dollars to invest, resulting in the underpricing of policies during periods when the market is strong, high interest rates are present, and/or insurers’ profit margins are robust.  This is called a “soft market.”  When the stock market plummets, interest rates drop, and/or cumulative prices cuts cause profits to fall, insurers begin increasing premiums and reducing coverage, creating a “hard market” and a corresponding “liability insurance crises” for policyholders.[8]

These boom/bust cycles occur nationwide, regardless of a state’s particular tort law regime.  Each time such a crisis occurs, insurers routinely blame state tort laws as the root cause.  Lawmakers, under pressure from the insurance industry, respond to the insurance “crises” as if the carriers were the victims, rather than the creators of the problem.  These “tort reform” laws passed in response to the self-created insurance crises are designed to increase insurance company profits, and restrict an injured party’s access to justice, or place limitations on damages to compensate injured victims.[9]   Lawmakers have passed these measures based on incomplete and/or inaccurate information provided by the insurance industry and its lobbyists, as federal and state laws do not require insurance companies to reveal information that could be used to fairly examine the actual financial health of the industry.[10]  Moreover, under state law, insurance companies are permitted to conceal important information that would inform lawmakers about the claims insurers raise during times of alleged crises to justify drastic rate hikes.  Such withheld data includes the amount of reserves held by insurers to pay future claims, the amount paid for different types of claims, actual sums paid to victims, and the amount insurers pay in cases involving multiple defendants.[11]

What can be done to remedy this situation?  To start,

  1. Congress and state legislatures should require insurance companies to disclose substantially more meaningful data regarding their actual financial well-being which justify the industry’s huge premium increases and limitations on coverage during hard markets.
  1. States should pass laws and regulations requiring insurers to provide information on premium and investment income, reserves held, and actual claim payouts and expenses incurred.
  1. Congress should also repeal the federal anti-trust exemption under the McCarran-Ferguson Act to ensure all domestic and foreign insurers and reinsurers comply with federal anti-trust prohibitions applicable to other industries. By prohibiting price fixing and monopolies, the resulting competition in the insurance marketplace would yield lower premiums and expanded availability of coverage to consumers.
  1. At the state level, legislators should enact stronger regulation and oversight of the insurance industry.
  1. States should repeal anti-competitive laws and provide increased resources to underfunded and understaffed insurance compliance departments so they can be pro-active in investigating, reviewing, and approving any proposed premium increases. States should also repeal anti-rebate and anti-group laws which prohibit insurance agents from offering discounts to policyholders and the formation of groups to negotiate favorable premiums based to economies of scale.[12]

Part of the mission of Adler ♦ Giersch ps is to promote public awareness of insurance and legal issues affecting those who have been injured by the negligence of others or by insurers that do not act in good faith in handling personal injury claims.  Our consultations are complimentary and confidential.


[1] See e.g.: Adler Giersch, ps-The Advocate, Civil Litigation by the Numbers: The Truth Insurance Companies Don’t Want You to Know About of “Runaway Juries” and “Frivolous Lawsuits” (June 2016).

[2] See Center for Justice & Democracy, Premium Deceit: The Failure of “Tort Reform” to Cut Insurance Prices (1999).

[3] See Americans for Insurance Reform, Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America (December 2011).

[4] See Americans for Insurance Reform, Stable Losses/Unstable Rates 2016 (November 2016).

[5] The McCarran-Ferguson Act of 1944 exempts the insurance industry from anti-trust laws, allowing it to on components of insurance prices and prohibits any federal regulation or Federal Trade Commission scrutiny of the insurance industry.

[6] See Americans for Insurance Reform, Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America (December 2011).

[7]Id. For example, there is about a 15 month lag in auto insurance claims, while in medical malpractice, the lag is anywhere between 5 and 10 years.

[8] See Americans for Insurance Reform, Premium Deceit 2016: The Failure of “Tort Reform” to Cut Insurance Prices (November 2016).

[9] Id.

[10] Id.

[11] See Americans for Insurance Reform, Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America (December 2011).

[12] Id.