I was reading an article last week about how to handle a claim. The writer talked about showing compassion and empathy, which I agree with completely. The advice that struck me was the bit about not adding insult to injury.
If you are familiar with liability claims, you know that is almost impossible. It has nothing to do with the handling of the claim; it has to do with how the law is written. As an example, a claim I handled some years back.
My insured had gotten lost in a very bad neighborhood. While she was on the phone with her husband trying to get directions, she made a left turn, on a green light, and was hit from behind by another driver. The other driver hit her back quarter panel and completely bent her back axle. In the police report, he admits he saw her, but could not slow down in time. He was summons for careless driving and having an unregistered vehicle. My insured was summons for a cell phone violation.
Now my insured had a busted axle which technically could have been totaled and gotten her a new car; however, the company – one of the new car replacement companies mind you – said no. Therefore, her car was in the shop for a month. She also sustained an injury to her shoulder and her neck which caused her to incur a substantial amount of medical bills.
Now upset she wants to know if she will get her deductible – a $1000 deductible – back in her pocket. Given what state your insured resides in, this could go four different ways.
Pure Comparative Fault:
This type of settlement is derived from the share of negligence between parties. In states like Louisiana, Kentucky, Missouri and Alaska, my insured’s amount of negligence will offset the other driver’s liability.
If my insured is found at all at fault in any way, then she may not get the full judgment. In other words, if the other driver sues her, he can still recover damages from her for his own damages. Pure comparative allows this under the law.
Modified Comparative Fault:
There is two type of settlements under Modified Comparative Fault. This system says each party is held responsible for damages in amount to their own percentage of fault. That is not where it ends.
In states like Arkansas, Georgia, and Maine, if the percentage of fault reaches 50% that person receives nothing for their damages. If they are 49% or less than they can recover damages. Although like the Pure Comparative, the damages are reduced by the degree of fault.
In other states, the rules are the same; however the fault percentage there is 51%. Of course, if they are 50% or less than they can recover damages. The majority of the United States is the Modified Comparative Fault at 51%.
Slight/Gross Negligence Comparative Fault:
There is only one state that follows this system – South Dakota. This system is a trade-off between the traditional comparative system and the more conservative contributory system.
In South Dakota, since my insured had ‘slight’ negligence and the other driver had ‘gross’ negligence and she may have gotten a return; however, if anything other than that, her suit would have been thrown out and she would have been denied recovery.
One can only assume ‘slight’ and ‘gross’ are defined in the law as some a ‘reasonable and prudent’ person would deem as ‘slight’ and ‘gross’. Otherwise, it does not appear to be exact.
Pure Contributory Negligence Fault:
In states like Alabama, Maryland, North Carolina, and Virginia, if my insured contributed to the accident and is found even 1% at fault then my insured can recover nothing.
The accident, my insured and the other driver all were located in a Pure Contributory Negligence state. Since my insured’s negligence was at least 1% – defendant’s counsel citing the cell phone violation – the company was also not able to refund her $1000 deductible.
Was this insult to injury, it sure was. Was there anything myself or the adjuster could do about it, probably not. What saved the business? I told her up front what to expect and about what rules were in place for her state. Not only that, but the company sent her a letter explaining their decision at my behest and also gave her a brochure on Pure Contributory Negligence.
I am certainly not a lawyer, but knowing the facts saved a nice piece of business. Make sure your insured is on board if they have an accident. The hand holding goes a long way.
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