Author: inswebkit

Self-Insuring Workers’ Compensation Plans May Produce Premium Savings

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Joining a workers’ compensation group self-insurance program may be a significant means for small and mid-sized employers to reduce operating costs. Such plans deliver savings by providing employers with considerable control over losses, medical care and rehabilitation, plus improving cash flow.

While some companies self-insure workers’ compensation programs individually, these are usually best suited for larger corporations with immense assets. For smaller and medium-sized businesses, a Group Self-Insurance (GSI) workers’ compensation plan is more suitable. A GSI is a non-profit association of employers formed for the specific purpose of providing workers’ compensation coverage. A GSI enables employers to assume a major portion of their risk and provides group purchasing power for excess insurance to cover individual losses or in the aggregate in excess of a specified amount.

Workers’ compensation is well suited for self-insurance plans because claims are typically of low severity but high frequency, which allows losses to be predicted with some accuracy. Further, payment for large claims can be spread over several years, which benefits a company’s cash flow. GSI programs enable companies to better manage safety programs and have more direct involvement in seeing that employees receive prompt medical care when injured, and employers are able to exercise closer monitoring of the return of the employee to work.

Requirements for joining or forming a GSI vary considerably from state to state. Some states do not allow GSIs and in other states, companies must meet certain solvency standards and provide financial and loss data to be considered. Also, if a company has operations in more than one state, GSIs must be setup in each state. A GSI in one state will not cover losses in another state.

Besides improved cash flow, the major benefits that come from joining or creating a GSI are enhanced loss experience through more effective loss prevention, loss control and managed care programs; reduced administrative costs, and interest income earned on premiums. GSIs in most states do not have to pay premium taxes and or be assessed for residual workers’ compensation market losses.

Members of a GSI pay a premium to the group based on their exposures, classification codes, payroll, experience modifications, and rates developed by a state’s workers’ compensation rate making bureau. At the end of the contract year, any surpluses from both the claims fund and the administrative expense fund can be returned as dividends to group members.

GSIs handle claims following guidelines of the state workers’ compensation laws. Often, third-party administrators handle loss prevention and control, case management, accounting, investment and actuarial services.

An agent can provide guidance to employers wanting to explore joining a GSI. An interested company should first seek management commitment as joining a GSI requires careful attention to the entire workers’ compensation program rather than shifting these responsibilities and duties to a private insurer. Also, an employer has to be willing to disclose detailed information regarding its finances, support systems and ongoing risks.

While GSIs offer important advantages, there are some disadvantages. Members of the group are usually jointly and severally liable for losses incurred by the entire membership. A bankruptcy or dissolution of a member does not release the remaining members from liability. If the GSI’s retention and excess insurance are exhausted by a catastrophic event, the group members must contribute their pro rata share of the total loss. And, if a GSI has a pattern of liberal underwriting for new members, it’s possible it will have financial deficiencies in the future.

If an employer understands the additional risks it assumes as well as the added reporting and administrative duties when it joins a GSI program, the end result could be a significant reduction in overall costs for workers’ compensation.

Save Your Life with a Carbon Monoxide Detector

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Carbon monoxide (CO) is a clear, odorless gas that is a by-product of combustion of fuels like natural gas, liquid propane (LP), coal, oil and wood.  It is poisonous to humans and pets.  Each year, more than 10,000 Americans are disabled by accidental exposure to carbon monoxide.  Between 1992 and 1996, the number of non-fire CO poisoning deaths (excluding death by motor vehicle exhaust) averaged about 544 per year.

The majority of CO poisoning deaths were connected with the use of household heating systems.1 Other consumer products that contribute to CO poisoning deaths include charcoal grills, gas water heaters, camping equipment, and gas ranges.   Between 1994 and 1998, approximately 10,600 people were treated in hospital for CO poisoning injuries associated only with consumer products.  Therefore, it is important to have heating systems and other gas appliances inspected annually not only for efficiency but more importantly for safety.

Installing Your CO Detector

Homes with gas heating systems should have CO detectors, clear and simple.  A detector should be placed on each level of your home and especially near bedrooms or sleeping areas.  CO detectors can be mounted at any height and should be placed at least 20 feet away from any fuel burning appliances, and at least 10 feet away from kitchens and bathrooms.  If your CO alarm is triggered exit the house immediately and call emergency services.  Do not re-enter the home until a professional has completed a thorough inspection for the source of the excess CO.

Testing Your Carbon Monoxide Detector

It is now possible to determine if your CO detector is working by using a special testing device found at local hardware stores.  These devices simulate carbon monoxide by using a small tablet that when moistened releases a non-toxic gas.   If the detector is working properly the alarm will should go off.

With regular inspections of your gas burning appliances and heating systems and the installation of a carbon monoxide detector, death and injury from CO poisoning can be prevented.

1 Estimates of Non-fire CO Poisoning Deaths and Injuries; Executive Summary; U.S. Consumer Product Safety Commission; June 1999

Workers’ Comp Claims for Mental Illness May Be Difficult to Diagnose, But Are Real in Today’s Workplace

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When one thinks of workers’ compensation, images of workplace accidents and occupational diseases come to mind. Though the vast majority of workers’ compensation cases do involve claims for physical injuries and conditions, a small-but potentially growing-portion of workers’ compensation cases are based on mental or psychological claims, particularly related to stress experienced on the job.

Mental workers’ compensation cases fall into one of three categories: physical/mental, mental/physical, or mental/mental. A physical/mental claim involves a workplace physical injury that has progressed to a mental condition or disability; an example would be a back injury that lingers, and that results in the worker lapsing into clinical depression. A mental/physical claim involves a psychological condition arising out of the worker’s employment that has caused a physical illness; an example would be workplace-induced stress that causes ulcers. A mental/mental claim involves a psychological occurrence in the course of employment, which leads to a psychological injury or condition; an example would be an employee who witnesses a horrific workplace accident involving a co-worker, and who later develops a fear of operating the same equipment on which the co-worker was injured.

As with workers’ compensation claims that have only physical components, in order to be compensable, the claimed injury or condition must arise out of or occur during the course of employment. Some types of mental injuries are difficult to prove under this standard. For example, symptoms of physical ailments caused by stress (e.g., ulcers, heart attacks) may appear only after working in a stressful workplace for a long period of time. Furthermore, unlike claims based on a workplace accident, mental claims may not be linked to one particular incident, but rather to months or years of stressful working conditions.

Another example of the complexity of the cause-effect link in mental workers’ compensation claims is seen in claims based on post-traumatic stress disorder (PTSD). PTSD is a delayed psychological response to experiencing an extreme situation that overwhelms one’s usual ability to cope. Most commonly thought of in connection with soldiers and wartime, discussions of PTSD arose after the September 11 terrorist attacks. Though few would doubt the psychological impact of witnessing the devastation in New York or Washington first-hand, by definition, symptoms of PTSD do not appear for months or years after the event, making their connection to the workplace event difficult to assess.

Mental workers’ compensation claims represent a tiny percentage of all claims; estimates put claims with a mental component at about 1% of claims overall, although this figure varies by state. For a period of time in the 1980s and early 1990s, the incidence of claims with a mental component rose in some states, but stricter requirements imposed by state lawmakers, workers’ compensation boards, and courts stemmed this trend. In particular, mental/mental claims are least recognized.

Though workers’ compensation claims with a mental component represent only a small minority of claims today, the reality of the modern workplace should motivate all employers to be alert to their existence. White collar workers-who are most likely to claim an injury with a mental component-make up an ever-growing portion of the U.S. work force. Furthermore, today’s workplace puts great pressure on employees to be productive and cost-efficient. Many workers live with fear of job loss, as businesses continue to seek optimum competitiveness through “right-sizing.” All of these factors can breed stress.

All employers can take some basic steps to deal with increased stress levels in the workplace-

  • Be alert to signs of stress among employees, and solicit input from employees and managers on this issue. Be aware that certain events, such as layoffs, may trigger stress levels in employees beyond what is to be expected on a day-to-day basis.
  • Make employee assistance program (EAP) services available so that workers have ready access to help with dealing with stress.
  • In the event of a severe workplace trauma, arrange for on-site intervention and counseling services.

Though these steps will not make a business immune from the possibility of a workers’ compensation claim with a mental component, they will, at the least, help make stress recognition and prevention part of the workplace ethic.

Don’t Let Water Damage Drain Your Wallet

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Water leakage is the most common form of damage to the home.  With an average cost around $5,000 for water damage repairs, it’s definitely a problem worth a watchful eye.  Most of these damage claims are a result of a broken washing machine or hot-water heater.   While these appliances were once tucked away primarily in the basement, now they are conveniently located on main or upper floors.  When they malfunction the water leakage damages walls and ceilings causing extensive, time-consuming and costly repairs.

There are preventative measures you can take to reduce the chance of water damage in your home from a faulty appliance.  They involve the following:

  • An average water heater lasts about 10 years.   If you notice wet spots on the floor or rust forming on the tank it is a good idea to think about replacing it.
  • A worn out rubber or plastic hose is an accident waiting to happen.  Examine the hoses on your appliances and under sinks for leaks from water lines or drain pipes. Consider replacing them with stainless steel hoses which have a much longer lifespan.
  • If your air conditioning unit is located in the attic check it periodically and have it maintained by a professional.   Make sure that your service agreement includes inspecting and cleaning the unit annually.  A leak starting in the attic will do considerable damage.
  • Only run dishwashers and washing machines while you are home.  If the appliance should malfunction you can turn the water off in order to avoid a huge flood.  It is, of course, vital that you know where the main water shut off valve is located in your home.
  • For less than the cost of dinner you can purchase a water alarm.  They work much the same way as smoke alarms do and are simple to install.  They can be placed on the floor or wall mounted.  The alarm’s sensor will trigger if exposed to any level of moisture.

Some water damage is covered by homeowner’s insurance and some is not.  In some instances a policy will only cover damage if regular maintenance has been performed.  It is therefore essential that these areas are checked before you suffer losses that you can’t afford to cover.

Manage Your Workers’ Compensation claims

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How can managing your workers’ compensation claims process protect every employee?

The first step is to file the claim right away. To this end, have claim forms available to all supervisors. Some companies keep forms near the first aid kit alongside the OSHA log. Management must acknowledge the problem to correct it, so keep good records.

Keep any information regarding preferred doctors networks or nearest emergency care facility with the first aid kit. Maps to these facilities help in crisis management.

Because of the privacy laws, keeping records of employee health concerns (hypertension, diabetes, allergies to medicines) at the ready is tricky at best. Without making the records readily accessible by anyone, they need to be available to supervisors in an emergency.

The insurance company has a depth of claims experience that no insured can have. If not treated properly, some injuries worsen over time. The company has a right to investigate and guide treatment and rehabilitation. A delay in reporting that causes the situation to worsen may create coverage problems. Dutifully report all claims immediately.

Allow the insurance company to investigate the claim. Usually, if the claim results in only medical bills and no lost time, the company will not spend time finding causation; but your company management needs to understand the progression of events that leads to any loss.

Uncover the cause. Were safety appliances, equipment, and personal protection in place and used properly? When the employee was drug tested after the claim, was that an issue?

Use any claim as an opportunity to discuss safety at your next scheduled safety meeting. Discuss the following topics as collateral to the claim:

Assure employees the injury is covered by workers’ compensation and the injured will be cared for properly. If the injured is at work, have them report on the level of care.Discuss the results of the investigation regarding the cause of the loss in neutral terms, but no personal information about the employee. This discussion is about future avoidance, not humiliation.Remind employees of the drug testing policy and explain the policy aims to protect everyone.

If the insurance company investigation implies fraud, fake injury, review safety rules or regulations in a more generic form. Perhaps discuss slips, trips, and falls prevention as opposed to that specific incident.

Risk avoidance is your best measure against workers’ compensation injuries. Maintaining a safety culture with training, meetings, and management leadership keeps a workplace safer. Having proper paperwork and first aid readily available reduces the lost production effect of injuries.

The more prepared you are to handle an injury professionally, the more you protect your workforce. Manage ahead of the crisis with proper planning.

Coping with Dog Bite Liability

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You would have had to live underground with no radio, no TV, no phone, no Internet and no visitors for a couple of years not to know about the high-profile dog-bite trial in California.  A young woman was mauled and bitten to death by a dog bred for fighting.  That owner’s dogs had already exceeded the old every dog gets one bite standard.

In any case, even the one bite standard has disappeared along with the church social.  If your dog bites someone, even if you had no reason to expect it would, you can also expect to be sued.

Worse yet, it isn’t even all that unlikely your dog will bite someone.  According to the Centers for Disease Control, there are 4.7 million U.S. dog bites each year, resulting in costs equaling almost $1 billion.  The property/casualty industry paid out $310 million of that in 2001, up from $250 million five years earlier.

Insurance companies are not only wise to those figures; they are smarting from claims against homeowner’s and renter’s policies brought by the ranks of the dog-bitten.  As a result, some companies have eliminated coverage for dog bites; others demand proof that your dog is not a member of a particularly bite-prone breed.

Insurers sometimes institute these changes to a policy already in force, but they do communicate this to the policyholder.  Problem?  Most of us don’t bother to carefully read any communication after the initial policy, except bills.

So, if you own a dog, read your policy.  Even if it covers domestic pets and their damage, check with your agent to see if there have been changes since your policy went into effect.  And if so, make sure you’re still covered under that policy, or take additional action.

If your policy does cover actions by your dog, typically, it will provide between $100,000 and $300,000 in liability coverage.  If a claim exceeds your policy’s limits, you will be responsible for everything above that amount.

Once your dog has bitten someone, however, and a claim has been made, the dog poses an increased risk and your insurer may suggest finding the dog a new home.  Or, the insurer may charge a higher premium (which would be acceptable to most dog lovers, preferable, in fact, to losing the dog), or not renew the policy, or exclude the dog from coverage.  For the latter possibility, a dog owner may be able to add a separate policy specifically to cover the dog’s potential liability, although the cost, if you could find such a policy, might be prohibitive.  Many companies already ask policyholders to certify that they do not harbor a vicious animal.  Others won’t accept new business from any policyholder who has had a dog bite claim in the past three years, even if that pet is no longer in the home.

The twin issues of dog bites and liability/insurance have become so important there is a Web site devoted to helping consumers with their dog-bite issues; www.dogbitelaw.com.

Here, in brief, are some suggestions to be sure that your dog’s actions regarding humans are covered by insurance, and how to make the likelihood that your dog will bring liability problems upon you are minimized:

  • Have your dog spayed or neutered.  Studies show dogs are three times more likely to         bite if they are not neutered.
  • Socialize your dog to behave well around other people and animals.
  • Discourage children from bothering a dog that is eating or sleeping.
  • When you play with your dog, make it fun games such as fetch, not aggressive ones such as tug-of-war.
  • Avoid exposing your dog to situations that might cause it to be afraid or protective.
  • Have your dog obedience-not attack-trained.

If you don’t own a dog, you’ve probably stopped reading by now.  That would be a shame, because the statistics are on your side.

Professional Errors and Omissions: Protect Your Practice

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Professional liability insurance funds losses caused by errors or omissions in the rendering of services. What does this mean?

Professionals are human and errors do occur. In medicine and science, the client benefits from the best course of action suggested by an experienced practitioner at the time the service is rendered. The best course of action, though, has some risk of failure. It is wise to cover this potential.

Some examples of typical professional liability claims:

An attorney misses a filing date for a lawsuit and the client loses the right to sue a surgeon removes too little, too much, or the wrong tissueA hair stylist misuses chemicals and burns the client. A computer consultant provides incompatible software, causing damage

Some examples of actual, but unusual claims:

Although machinery is tagged as under repair, a building inspector is held responsible for a new system because they merely reported the tag-out rather than investigating the nature of the repair required.A real estate agent sold a home that the listing agent reported as located in the wrong school district. The selling agent did not correct the error although they were never asked to verify the information.A stockbroker advises a client to sell some stock and balance their portfolio. The client refuses and loses money. The client sues for mismanagement.

Most professional services contracts offer advice, design, expertise, politics, negotiations, or any skill associated with a particular profession. Beyond laws and regulations, professions self-govern by way of setting minimum performance and ethical standards.

When these performance standards are not met, either by an error occurring or an omission of an important service duty, a potential claim results. Expert witness testimony is often a feature of litigation in these claims to determine the definition and scope of the malpractice.

Doctors, lawyers, and certified public accountants (CPAs) spring to mind when discussing malpractice insurance, professional liability, or errors and omissions insurance. How about architects, engineers, office designers, barbers, dog groomers, bankers, clergy, web site designers, software producers, or computer consultants?

Any profession that provides a service instead of a product has a professional liability exposure. Almost any product includes some element of design. So, what separates a product from a service?

A service is defined by the acts of the professional, not by the finished product or outcome. Concrete contractors are covered by completed operations insurance; construction managers who select and supervise the concrete contractor fall under professional liability.

If you provide a professional service, advise clients, act on behalf of a client, or provide an outcome or consequence rather than a specified product or completed operation, you need professional liability insurance.

Professional liability policies define the acts, errors, and omissions covered both in general and specifically. Restrictions or exclusions are enumerated as well. Standard forms exist for many professions; however, different forms are used and it pays to have knowledgeable advice.

Reputation creates value in any professional practice. One major difference between standard business and professional liability is the professional’s right not to settle. The downside to this decision, however, is the policy limit of liability decreases for that claim to the accepted claim offer, including costs and legal fees, a very risky strategy.

Claimants and their legal counsel prefer to negotiate with an emotionally distraught practitioner than a dollars and cents experienced adjuster who knows the potential court outcome.

With reputation and time away from the practice already at risk, remove the strain of total financial ruin from the equation and obtain professional liability insurance.

Beyond Excess Policies

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Most people have heard of an umbrella policy, or an excess policy as it is sometimes called. If you have high enough limits on your car and home insurance, it is likely that you can protect yourself from any extraordinary liability claims with such a policy for just a few dollars, relatively speaking.

But what if you own some really fine objects that would kill you, at least financially, to replace?  An umbrella policy probably won’t handle those, and they are usually not covered sufficiently under your homeowner’s or renter’s policy, either. You can schedule valuables on those policies that is, add them separately for a slightly higher premium.  But if the objects are really valuable and truly unique, even scheduling them won’t bring you solace or sufficient bucks to replace them or to go to France to grieve if they are stolen, lost in a fire, or carried off in a flood.  You need something more than schedules.  But what?

Consider Mysterious Disappearance Coverage, or other interesting variations, such as pair and set replacement and breakage insurance. Several companies offer these sorts of insurance.

Here are some specifics to look for if you are considering getting some special coverage for pairs, sets or even singles of valuable, portable jewelry, collectibles or unique items in your home:

  • Will the items be covered if you ship them to someone else–to a dealer for sale, or even a relative as a gift?  One insurer, for example, will cover such items among the wide range of categories they insure if the items are sent by secure mail or other secure shipping method.  Others will, too.
  • Will the insurance transfer if you give your mother’s ruby earrings to your daughter, now living in Dusseldorf?  Some companies let you list the recipient as the policyholder when you request the policy on those items.  You can also have the bill and policy sent to you, however, so the surprise isn’t ruined.
  • What about loose gemstones?  Some people like shopping for unset emeralds when they travel to Colombia, or they’ve got some nice stones someone removed from their settings and never got around to putting back.  Look for companies that will cover these.
  • What if one member of a set goes missing?  Return the remaining piece of the set to your insurer, and you can often receive the full replacement cost of the set.  Several companies provide this sort of insurance.
  • What if you are going to inherit a nice pile of valuables, but you can’t quite predict when?  You want them covered the minute they are legally yours, but how can you arrange it?  With some companies, you have a 90-day window of coverage jewelry, fine arts or collectibles you might inherit or decide to purchase as long as your other portable assets are insured with them.
  • Suppose you have some valuables that suddenly catch fire in the public imagination, and appreciate far beyond what they were worth when you insured them?  Look for a company that offers insurance that can also fluctuate. One company will pay for a loss of up to 150% of the itemized amount if the market value just before your loss occurs is greater than that amount.
  • What about breakage?  Your gemstones might disappear, but they won’t break.  Your ancient Etruscan wine flask probably won’t disappear, but it certainly could break.  Check into breakage coverage, too, while you’re going beyond the excess policy.

Sidebar:

Who knows what valuables you own?

Many people don’t really know what they own.  Here’s a checklist of things of value you might have forgotten about completely, but which you might want to insure:

Rings, watches, necklaces of gold, silver or platinum with or without gemstones; garments made of sable, mink or fox; paintings and other artworks; art glass, antique glass; rare books; porcelain figurines; antique furniture and lamps; collections of small objects from baseball cards to pens; silver utensils, gold-plated tableware, antique pewter; crystal; vintage wine collections; antique firearms and swords; currencies; maps; rare plants.

Umbrella Liability Coverage: What Limit Saves my Assets?

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Insurance funds losses; it transfers risk from your company to the insurance company for a fee – premium. Deductibles are used to reduce the number of claims by having the business pay small amounts and only reporting larger issues.

The order in which claims are funded is: deductible, liability limits, and then company assets…and sometimes personal assets. Your company needs high liability limits to protect company assets.

Claims exceeding $1,000,000 in liability are infrequent, but not rare. Umbrella insurance covers above all other liability insurance in one million dollar layers. High liability limits become affordable this way.

Business nightmares like the $3,000,000 cup of coffee, the truck catching fire under a railroad bridge, or your vehicle colliding with a school bus unfortunately do occur. A million or two is just not sufficient coverage for most operations.

Asbestos and tobacco companies produced legal products for years before lawsuits started as the result of long-term exposure, and these very successful companies were brought to the brink of extinction. These companies kept tens of millions in umbrella layers. How much is enough?

Commercial liability insurance covers injuries to other people and damage to their property caused by your company, your employees, or you. The cause of loss may be vehicle, products, premises, operations, liable, slander, poor advice, or even aviation related.

The amount of liability and types of insurance depends upon your company’s exposure to risks.

Most companies face fleet risks, premises-operations risks, and employee injury risks; some add professional liability risks, aviation risks, common carrier and garage liability risks.

Insurance companies recognize these typical risk scenarios and respond by offering business automobile, truckers, garage, general, aviation and professional liability policies.

Purchasing sufficient liability limits for disastrous claims is costly when purchased one liability risk at a time. In fact, most companies simply could not afford purchasing insurance this way.

Insurance companies offer umbrella coverage to serve this need.

The company proscribes underlying, or first dollar coverage limits, over which umbrellas pay claims settling for more, or in excess, of these policies.

Since these claims are infrequent, premiums are affordable; and each added million dollar layer decreases in cost.

In addition, most umbrella forms add liability coverage by insuring more risks than the underlying policies. A relatively modest – $1000 to $10,000 – deductible is required, but then the umbrella limits cover unscheduled liabilities.

So, with an umbrella policy, the order in which claims are paid is: deductible or underlying liability limits, umbrella limits, and then company assets.

How much is enough combined liability limit? How well can you predict the future of litigation? Products, operations, and vehicle claims in excess of $3,000,000 are not rare.

The cost effective answer depends on the amount of assets you’re protecting, the cost of the coverage, company profit from which to expense the premium, your risk tolerance, and the availability of umbrella coverage.

Three more factors are worth considering:

Products claims may take years to discover. Claim inflation requires high limits at the time the claim is paid.Large liability claims take time to settle. Claim inflation is rampant. Even though an event occurs today, you may be settling at the going rate three years from now. Million dollar claims were rare twenty years ago; not so much now.Courts have been chipping away at the corporate liability shield for smaller businesses. Personal assets may be at risk. Now consider how far that erosion of corporate protection might progress by the time you get your day in court.

Umbrella liability limits should be high enough that business assets are not at risk. Business survivability is at risk with a too low limit. Your current limits can be assessed and reviewed by your broker and/or attorney for adequacy.

Accident Without Injuries Etiquette

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Your teenage daughter misjudges the space when she goes around a turning vehicle, and just taps the car’s right rear bumper.  The other driver, an older woman, appears unhurt. She says, It’s Easter time, and I’m fine.  Let’s just forget about it.

You were riding with your daughter and you think that’s a reasonable attitude, and agree.  So you all go home to the Peeps and the chocolate eggs and have a nice life.

A few weeks later, however, your insurance company informs you that the woman is suing them and you for lost wages (although she had already been on disability for paranoid schizophrenia) and neck injuries (you’ve seen her in the shop where you work without a cervical collar) and pain and suffering.

Where did you go wrong?  The so-called accident was only a tiny tap that barely scratched paint.  There couldn’t have been an injury, as your terrified daughter tells your insurance company’s attorney prior to trial.

Prior to trial!  Holy cow.

No one can guarantee what might happen when bumpers kiss.  But there are steps you can take to avoid fender-benders becoming the event of the decade.

Your first thought might be to call the police.  But in some jurisdictions, the police will not respond unless there are injuries. In many states, an accident without injuries and less than $500 damage means you don’t need to call the police to the scene; you can file a report later.  Know the laws in your state.  Then, by taking the steps below even without the police present you can protect yourself from false claims and help your insurance company reach the best decisions:

First, follow the law.  Virtually every jurisdiction requires drivers to carry their license, registration and insurance information.  Be sure it is with all family drivers at all times.

Second, take pictures.  Keep a disposable camera in the glove compartment and, in the event of a fender bender, use it.  Photos can later help show whether any repair estimates were inflated, or whether the force of contact was likely to cause injuries that might later be claimed by the other driver or passengers.

Also, take pictures of all the occupants of the other car, preferably while they are still in the car or at least while they are all still at the scene.  Why?  There’s a fraud scheme called jump ins. In an attempt to get a bigger settlement, people known to the claimant come forward and say they were also in the car and also suffered injuries.

Take pictures of the site of the accident.  Having photos of the cars on location can help you make your own case to the claims adjuster.  Write down the specifics of the location as well, for example:  The NW approach to the intersection of Locust Lane and Route 26, about 2 car-lengths before the speed limit sign.

Third, if there are witnesses, get their names and addresses. Some may be reluctant; be persistent within reason.

Fourth, exchange information with the other driver.  This information includes name, address, phone number, driver’s license number, name of the other driver’s insurance company, policy number, and license plate number.  If the driver is not the person named on the insurance card, find out and write down what the relationship is between the driver and that person; family, friend, employee.  Write down the policyholder’s name, address and phone information, as well.  Finally, write down a complete description of the other car, including year, make, model and color.

Fifth, keep your mouth shut. Under no circumstances tell the other driver, It was all my fault,even if you think it was.  Remember, there are people who stage accidents for the payoff, and you could have been positioned so that there was nothing else you could do.  Even if it was a bona fide accident, let the experts determine blame or no blame when they work out the insurance compensation.  Some of us feel so badly about any incident, especially if the other driver appears to have come unglued, that we are likely to accept blame when none is due.

  1. Now you can go home and have a nice life and drive even more carefully in the future to avoid the possibility of having to perform this tricky and sometimes frightening scene again.