Category: Claims

Manage Your Workers’ Compensation claims

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.

Remaining Under the Radar with Your Homeowner’s Coverage

If you contact your insurance company to verify coverage for a particular claim, it goes on your record.  Even if you call your agent directly, they might be obligated to inform the insurer of your inquiry.  Too many inquiries, even if you never file a claim, can jeopardize your policy.  Too many claims, regardless of their size, can result in non-renewal at the end of your policy’s term.

Here are several ways to stay under the radar with your insurance company:

  • Don’t file for small claims.  When property damage occurs, get estimates first before calling your insurer or agent.  Pay for small repairs yourself, if possible.
  • Consolidate coverage.  Have your homeowner’s and auto insurance with the same company.  The insurer might think twice about canceling if you’re likely to pull the other coverage and move elsewhere.
  • Increase your deductible.  If you heed the earlier advice and don’t intend to file for small claims, save the money you’re spending on a policy with a $250 deductible and raise it to $500 or even $1000.
  • Insure your home for its replacement cost, instead of the balance of the mortgage, and save money.  Approximately 25 percent of your mortgage represents the cost of the land.  If your home burns to the ground, you’ll still have the land.
  • Stay with the same insurer indefinitely.  You’ll build up a track record, and your insurer might refrain from canceling your policy if you do have a claim. 
  • If you purchase a house, check into a homeowner’s policy before your closing date.  Thanks to the Comprehensive Loss Underwriting Exchange (CLUE), there is a database of insurance claims that inform an insurer if a particular house has ever been subject to a claim.  If previous claims were paid on the house, you’ll have a hard time obtaining coverage, even if you’ve personally never filed a claim.  Furthermore, any insurance you’ll find will be more expensive than standard rates.

At the same time, if you’ve filed claims before and purchase a new home, you could be denied a policy, not because of the house, but because of your own claims history. 

Call your state’s insurance commission to ask about state regulations concerning non-renewal or cancellation.  A few states have laws that prevent an insurer from refusing to renew your policy for claims caused by acts of nature.

PIP and No-Fault-Is “Reform” the Wave of the Future?

More and more states are abandoning the PIP/No-Fault form of auto insurance in favor of a tort-based set of laws.  PIP/No Fault originated in the 1930s as an alternative to the often slow and expensive process of litigating claims.  The intent was to speed up the process by shifting the dispute resolution to the insurance companies rather than the courts.  In theory, this was supposed to reduce insurance rates, and initially rates did go down.  By the mid-70s, almost 20 states had some form of no-fault insurance laws.  However, over time, rates rose until “No-Fault” states had higher rates than tort-based states.  Beginning in 1980, states started repealing their no-fault laws, and now only nine states (Florida, Hawaii, Kansas, Massachusetts, Missouri, Minnesota, New York, North Dakota, and Utah) have mandatory no-fault laws. Eleven states plus the District of Columbia have hybrid laws (Arkansas, Delaware, Kentucky, Maryland, New Jersey, Oregon, South Carolina, South Dakota, Texas, and Virginia).

The pendulum seems to be swinging back to tort-based auto insurance. What does that mean for you as a policyholder?

The Good News

Tort-based systems, in theory, give you more choices for medical payments and could save you substantial amounts of money.  As an example, depending on the insurance company and coverages selected, insureds in Colorado (the most recent state to revert to a tort-based system) could see savings of 10%-30%, according to several recent Denver Post articles.

The Choices

PIP, or personal injury protection, is still available (in most cases), should you wish (or need) to pay for it.  If you choose to drop this coverage or are already under a tort-based system and don’t have this coverage, you can still purchase it, with most policies, for medical expenses.  However, this coverage will be limited, generally to no more than $50,000.  If the additional coverage is purchased, it will pay expenses incurred by you and your immediate family for injuries resulting from an auto accident when you or they are at fault.

Since many drivers are uninsured or underinsured, it is essential that you understand the ramifications and make an informed decision about the “Uninsured/Underinsured Motorists” coverage option.

What If?

What happens if you are at fault? Your auto policy should pay the other person’s claims.  Companies normally negotiate this with each other.  If you have insufficient coverage you may have to go to court—the tort aspect of the law. Either you or your health insurance company will normally pay medical expenses for you and your family once expenses exceed your auto policy coverages.

What if you are injured by another driver and that driver is at fault?  Generally the two auto insurance companies will work together to determine fault and pay benefits accordingly.  This resolves the problem in most cases.  If not, or if the amounts paid are insufficient, it may be necessary to resort to the court system to recover damages.

What if the other driver is at-fault and has no (or has inadequate) insurance?  Your insurance company normally covers your medical expenses.  This protection is provided under the uninsured/underinsured motorist coverage.  If you do not have this coverage, then your health insurance usually pays the bills, or you can sue the other party.  Which brings us to the final important considerations.

Consider the “Deductible Gap”

Generally, under a tort system, medical payments under your own policy are limited.  However, in most cases you can choose “additional medical payments” and “Uninsured/Underinsured Motorists” coverages as part of your auto insurance policy.  After years of rising rates, many people may choose to forgo any additional coverages.  This could be a problem if you have high-deductible health insurance, or no health insurance at all.  There is potentially a huge gap between the amount paid under a tort-based policy and your health insurance deductible.  If you have no insurance, the out-of-pocket costs could be staggering.  If you are not at fault in the accident, the tort-based system allows you to go to court to get compensated for these costs, as well as for pain and suffering, but there is a time factor and a lot of out-of pocket expenses involved.

What Does This Mean for Health Insurance Costs?

As more costs are shifted to the health insurance system, your costs are likely to rise.  Furthermore, not everyone has health insurance.

So, What Is Next?

This is a good time to look at your health insurance to make sure it covers you adequately if you drop PIP/No-Fault coverage.  It’s all about avoiding unpleasant surprises!

Your Roommate Wrecks Your Car – Who Pays What?

If your roommate borrows your car and causes an accident, who pays what? If you both have auto insurance, your insurance will pay first and you’ll be responsible for your deductible. Your auto insurance policy insures your vehicle plus you, any relative, and anyone else using your car if the use is reasonably believed to be with your permission.

On the other hand, if your roommate causes an accident that results in serious bodily injury and property damage to another person, the actual driver’s policy will cover the bodily injury liability and the car owner’s liability covers property damaged caused by his or her car. As owner of the car, your liability insurance also covers the cost of your legal fees in the event you are sued, but if your liability limits are exceeded, the courts can attach your personal assets, such as your home, to recover damages. Liability coverage will not pay for damages beyond the limit for which you are insured.

If you lend your car to a roommate who does not have insurance, you are opening yourself up for trouble. If the damages your friend causes exceed your insurance policy limits, the injured party can come after you for medical and property damage expenses.

What if your roommate drives your car without your permission? You’re likely not to be held responsible for the damages because your roommate borrowed you vehicle without your knowledge. In this case, your roommate’s insurance will kick in first. If your roommate isn’t covered, you will need to use your collision insurance to cover the damages to your vehicle, and your liability coverage will cover damage to other’s property. Unfortunately, the insurance company will assume your roommate has permission to use your car unless there are clear indications that you denied permission or there are extenuating circumstances, such as a drunk friend takes your car without your knowledge.

If your car is stolen and then involved in an accident, you will not be held responsible for damages done to other people and their property, but you will probably have to use your collision insurance to pay for the damage to your car. In the unlikely event the thief has auto insurance, his company will not pay for his criminal act.

Regardless of the scenario, it is wise to understand your insurance policy and exactly what it covers and when. Just as important, exercise common sense when loaning your car to roommates, friends, and relatives.