What does a real tax cut mean for Americans?

money

Today is the day that we hear of the tax cuts envisioned by President Trump.   For months, the former business icon touted the benefits of reducing taxes.   He has used both JFK and Ronald Reagan as examples of what a tax cut can do for an economy.

Never before in history has there been a better chance to make America great again.   With 2 trillion dollars sitting on the sidelines overseas, no sensible business leader would think of bringing that cash back to America with a 35% repatriation cost.   But what if that cost were to drop to 6.5%, as some in Congress are urging.

What about our corporate income tax rate of 35%, the highest in the world?   Is there any wonder that America isn’t luring companies and jobs to our homeland.   What if that rate were to drop from the highest in the world to 15%, which is among the lowest?

Many on the left and in the mainstream media are saying that this is a tax cut for millionaires.   Let me tell you a story about a lady who owns a company and makes about eighty thousand dollars per year.   Her corporate income tax is done on a Schedule C and attached to her 1040 tax return.  You know, the tax return you, I and millions of other working Americans fill out.    This is how MOST corporations and LLC’s are run.   Most are owned by sole proprietors.   Most do their business income on their personal taxes. When the government seizes a disproportionate amount of this income it penalizes families who are struggling to simply get by.

The first thing that needs done is a reduction of the corporate tax rate to 15%.    I’d prefer to see 12%, as they have in Ireland, but 15% is a decent start.   We also need to reduce the number of tax brackets.   While I would prefer to see a total elimination of income tax with the FairTax being used in its place, the reality is that isn’t going to happen.   So how about we cap income tax at 25%.   There is no reason on God’s green earth that the government is deserving of anything more than that.   The next tax bracket should be 10%.  The lowest bracket should be zero.

The untold dirty secret in America is that we are over taxed.   In many states with exorbitant taxes such as California, NY, Massachusetts, Ohio and Connecticut, it is not uncommon that people pay nearly sixty percent of their income in the form of some type of tax; federal, state, local, property, utility, RITA, sales or other.   This is simply unfair.   After all, we are a nation that, until 1913, didn’t even have an income tax!

So now we come to what is fair and how should it be funded.   Fair is simple.   A straightforward reduction of corporate and personal tax rates as outlined above.   The highest rate will be reserved for individuals making over $1 million per year.   The second tier will be those making over $250,000 per year and those making less pay no federal income tax.  As it stands now, the top 20% of wage earners now pay 80% of all federal income taxes anyway.

How is the deficit made up?  Quite simply, we start running America like a business.   If a government agency is adding to the deficit, then eliminate it.   There are any number of federal agencies that are outmoded, outdated or just not needed any longer.   Others could be outsourced to a more efficient and accountable private sector.

We need to stop giving benefits to illegal aliens to the tune of more than 100 billion per year in free education, healthcare, welfare and funding  to sanctuary cities.   Wouldn’t it be better to divert that funding to we, the people?

We could stop paying for other nation’s military and military education.   In 2014, that figure was $35.4 billion dollars.   Let’s bring that money home, too.

Then there is the $2 trillion dollars waiting to be repatriated to our nation.   When this money comes back, we will regain our status as the biggest economy on earth.  We will see economic growth and wage reductions never before witnessed in history.

This activity will generate much more in tax revenues than we are seeing today, albeit at a much lower rate.   Factories will expand, R&D will lead us to new innovation that will transform the way we live.   Jobs will be created in record numbers.  Prosperity will trickle down from top to bottom, with everyone living a better life.

What we know is that tax cuts work.   JFK, a Democrat, and Reagan, a Republican, both proved it.   For sure, many on the left are afraid of this approach with the mistaken belief that they need an underclass to ensure re-election.  This is simply not true.   People, by and large, are very smart.   They look at candidates and if one candidate is going to lift them up and the other wants to keep them down, they will, when properly educated and informed, make a decision for a better life.

This shouldn’t be a partisan issue, it should be an American issue.   We can fix so many ills in our society by simply lifting the masses just as a rising tide lifts all boats.   When people are working they have self esteem.   There is emphasis on improving schools and the money to do it.   There is less crime and fewer broken homes.   Cities like Chicago, Baltimore and Detroit could see a twenty first century renaissance.   This is the vision for America that can truly make us great again.

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Christopher Tidball is an executive claims consultant, author and speaker.  He is a former executive for a large multi-national corporation and has written many books including Kicked to the Curb: 20 Essential Rules For Coming Out On Top When Your Life Has Been Turned Upside Down and the recent thriller Swoop & Squat.  To learn more please visit http://www.christidball.com or email at chris@christidball.com

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April 26, 2017 at 8:12 am Leave a comment

Cleveland Rocks! Lessons learned from the 2016 Cavs

a cavSo they aren’t the ’97 Bulls, ’87 Lakers or ’86 Celtics.   But they are the world champions, knocking off the Golden State Warriors who own the distinction of having set the record for most regular season wins after going 73-9 this season.

The Cleveland Cavaliers are something different than the great teams of the past, with an amazingly balanced offense and a stifling defense.   But this team is more than just finesse.  They are the grit that is Cleveland.   When they were in a 3-1 hole in the NBA championships, most were in doubt of their ability to recover.   Count me in that camp.   Why?  Because no other team had ever done so.   After all, we are talking about Cleveland.   Remember “The Drive”?  Remember “The Shot”?   The last championship the city had ever seen in any sport was the 1964 Browns, well before many of us were even born.

As a Cleveland native, and Cleveland fan, this was no lost on me, or countless other fans along the North Coast, across the country and even the world.    There is an old saying that you can take the boy out of Cleveland but you cannot take the Cleveland out of the boy.   While we all love the city for what it is, what we have longed for is validation in the form of a world championship; in any sport.   C’mon, just give us a little something instead of the tease of the ’97 Indians.

This year’s NBA championship will not be forgotten.   It was marked by stunning comebacks starting with the Dub’s going down 3-1 to the Spurs and then defying the odds to win the series.  Who would have ever thought the finals would turn out the same way, but this time the Warriors were the ones to lose on their own home court as King James and the Cavs finally brought victory and validation home.

In our own organizations, we should look to the leadership of this team, both on and off the field to better understand their success.  It was perseverance with a focus on winning that ultimately ruled the day in a society where marginality has become socially acceptable and everyone gets ribbons just for participating.  There would be no ribbons for losers here, only champagne for the champions as they raised the trophy in Oracle Arena.

While the NBA season is over, our season is not.  It is a perpetual game of continuous process improvement in an increasingly difficult marketplace.   Doing things “good” isn’t good enough for those who truly want to gain a competitive advantage.

True success comes from looking across the business landscape.   Who does things well, marginally well or not well at all.  The Cavs were a decent basketball team during the regular season.  They could have settled for the status quo and made the playoffs as a #2 or #3 seed.   But they didn’t.  They recognized that to attain success they would have to improve upon what they were already doing well.   They had to build upon last year’s season that almost was.

This is true in any industry.   Most companies stay in business by doing things pretty well, and many adopt the status quo mentality by doing things “the way it has always been done”.   The ones who succeed do so by being superior in quality and service.  They look beyond their own four walls across the industry to better understand the competition.

In some organizations there is a propensity to focus on internal improvement by measuring against oneself.  This would be like the 2016 Philadelphia 76’s, who owned the worst record in the NBA,  saying they want to double their results next year, which would mean going from 10 wins to 20 wins, which is still an abysmal failure by any stretch.     As a historically successful organization, they won’t do that because their culture and leadership has defined them as winners.  They recognize that to win the big prize, they must get back to winning at least 50-55 games per season.    Having a winning attitude is the mindset that will enable them to do just that.   This is also the paradigm that businesses striving for success should seize upon.

Changing your paradigm from “what we do right” to “where we can improve” is the foundation for long term success.   As discussed in the book Re-Adjusted, casting aside the mindset of “we’ve always done it this way” to “how can we do it better” becomes the springboard to take your organization from ordinary to extraordinary.   Looking at the best of breed rather than just one’s internal results, forces companies to change for the better.

Great leaders continually do this which brings about not only change in their own organizations, but the transformation of entire industries.   They force change internally and the ensuing ascent to success forces the competition to either change or falter.   As coaching legend John Wooden once said, “Failure is not fatal, but failure to change might be.”   The Cavaliers recognized this at a crucial time and went on to be world champions.

Christopher Tidball is an executive claims consultant and the author of multiple books including Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary and the recently released thriller Swoop & Squat.   He is an industry veteran who has served in various claims and leadership roles for multiple Top 10 P&C carriers.  To learn more please visit www.christidball.com or e-mail chris@christidball.com

 

June 20, 2016 at 2:24 am Leave a comment

Dude, where’s my car?

a- car thiefIf you don’t want to have your car ripped off, avoiding California is a good idea as seven out of the top 10 cities in the United States for auto theft are in the Golden State.    In one recent year, as many as nine California cities made this list!

Do you know the way to San Jose?   A lot of car thieves do as evidenced by the Bay Area  corridor leading the pack in auto thefts.    In fact, San Francisco leads the nation in auto thefts with over 29,000 vehicles ripped off in 2014.    During this same year, the only cities not in California were Seattle, Washington, Spokane, Washington,  and Odessa, Texas.

There is a silver lining in that auto theft is on the decline, and has been for a few years.   From 2012 to 2014, the FBI estimates that theft rates declined about 5.7% annually.    Theft rates have declined 42.8% since 2003.  This is largely the result of increased use of anti-theft devices and telematics systems.

According to the National Insurance Crime Bureau (NICB) here are the top 10 cities for auto theft with rates based upon population (2014 data):

  1. San Francisco-Oakland-Hayward, Calif. (29,093)
  2. Bakersfield, Calif. (5,211)
  3. Stockton-Lodi, Calif. (4,245)
  4. Odessa, Texas (886)
  5. Modesto, Calif. (3,047)
  6. Spokane-Spokane Valley, Wash. (3,032)
  7. Vallejo-Fairfield, Calif. (2,414)
  8. Seattle-Tacoma-Bellevue, Wash. (20,268)
  9. Fresno, Calif. (5,260)
  10. San Jose-Sunnyvale-Santa Clara, Calif. (10,531)

In addition to where you live, what you drive plays a big role in whether you may become a victim of auto theft.   Here is a list of the most frequently stolen automobiles:

  1. Honda Accord
  2. Honda Civic
  3. Ford F-Series
  4. Chevrolet Silverado
  5. Toyota Camry
  6. Dodge Caravan
  7. Dodge Ram
  8. Acura Integra
  9. Nissan Altima
  10. Nissan Maxima

As vehicle security continues to improve, one has to wonder what the crooks have up their sleeve.   For those who have read my insurance fraud thriller Swoop & Squat, one of the scams involved stealing and rebadging high dollar cars and shipping them to the Middle East and Asia to unsuspecting buyers.    But many scams aren’t that elaborate, focusing more on stealing a vehicle to strip it down and sell the parts.   In some instances, insurance fraud is involved as owners simply give their vehicles up for financial reasons.

In years passed, breaking into a vehicle was rather simple and could be accomplished with a jimmy or coat hanger.   I recall an old car that I once owned that could be hotwired in the event that I couldn’t find my keys.

Today, many vehicles have much more elaborate systems with remote entry and push button ignitions.   One can only imagine the potential as thieves hone their skills of hacking into master computer modules.   What will the future hold as manufactures develop self driving and eventually flying vehicles in the not too distant future.

What we do know is that thieves are on the prowl and cars provide lucrative targets.   Regardless of where you live or what you drive here are ten tips to protect your car from being ripped off:

  • Lock your car
  • Park in a residential garage
  • Lock the garage door
  • If no garage is available, park in a well-lit area
  • Utilize a vehicle alarm and location systems (you will likely get an insurance discount, too)
  • Don’t leave your vehicle unattended and running
  • Use a steering wheel locking device, such as a “Club”
  • Install a kill switch
  • Hide your valuables
  • Drive a stick (most Americans, including thieves, don’t know how to)

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Christopher Tidball is an insurance claims consultant and author of multiple books, including the insurance fraud thriller Swoop & Squat.    He is a veteran of the insurance industry, starting as an adjuster and working in various management, special investigation and leadership roles.  To learn more, please visit http://www.christidball.com.

May 17, 2016 at 1:57 pm Leave a comment

Erin Andrews: A lesson in comparative negligence

erin andrewsA jury has awarded Erin Andrews $55 million dollars in her lawsuit stemming from nude videos secretly taken by Michael Barrett, an insurance executive from suburban Chicago.    There were at least three known instances of Barrett secretly recording Andrews through peepholes bored in hotel walls after he made arrangements to occupy rooms next to Andrews.   According to the Huffington Post, there may have been as many as sixteen victims to Barrett’s deviant secret videos.

In 2011, Barrett was sentenced to 2 ½ years in prison.   At that time, Andrews had expressed displeasure with the sentence but had also indicated that she had no intention of filing a civil lawsuit.   Apparently something changed, as a lawsuit against Barrett and Marriott ensued, asking for $75 million dollars.   Marriott International was dismissed from the case after establishing that it was not legally responsible. However, the operators of the Nashville Marriott, in contrast, were deemed negligent in how they protected Andrews’s privacy. There is an area of law called hotel premises liability, under which hotels are expected to make reasonable efforts in guaranteeing the privacy of guests. Given the negligence of the operators,   it became clear that there was the potential to place some negligence on the hotel which would be the most viable means for recovery.

The case was ultimately presented to a jury and this week Ms. Andrews was awarded $55 million dollars.   The jury apportioned liability with 51% assessed against the perpetrator, Michael Barrett and 49% against the two companies, West End Hotel Partners and Windsor Capital Group, that owned and operated the Nashville Marriott at Vanderbilt University where the secret videos were taken in 2008.

The negligence against Barrett is clear.   There is no doubt that he committed the crime of interstate stalking, for which he was convicted and sent to prison.   The more challenging negligence argument is against the hotel which appears to have failed to take proper precautions of keeping Andrews personal information private and having appropriate on site security.

In a report by the Washington Post, Andrews alleges that Marriott workers helped facilitate Barrett’s videotaping by first revealing that she was a guest at the Nashville hotel, then disclosing her room number, and finally by agreeing to Barrett’s request to be placed in the room next door to the broadcaster. If there is sufficient evidence to prove this, as a jury seemed to believe there was, then clearly there is negligence against the hotel operator.   The bigger question is to what degree.

In my book, Re-Adjusted: 20 Essential Rules to Take Your Claims Organization from Ordinary to Extraordinary, we discuss the importance of negligence in many various situations. The reality is that claims organizations often miss the mark, as only around 3% of claims are assessed with comparative negligence.   This is a huge delta from jury research that indicates that juries assess comparative negligence in more than half of all claims. In the Andrews case, they did just that, apportioning liability.

When factoring in fault, it is important to understand not only the role of the primary tortfeasor, but also other indicators such as proximate cause, or in this case who set the ball in motion.   Had the hotel employees not revealed private information, it would have been much more difficult for the primary tortfeasor to obtain his secret videos.

Whether the apportionment is right is highly subjective.   As a long time adjuster, my sense is that Barrett should have been hit with more and the hotel operator less, but certainly each has some responsibility.   The next issue to resolve is the $55 million dollar verdict which, on the surface, appears to be quite excessive for someone who did not suffer any physical injuries, especially when considering the average verdict for wrongful death of a female in the United States is just over $3 million dollars.

There is no question that Andrews suffered mental anguish from this situation and is entitled to compensation.   The reality is that she will likely collect nothing from Barrett.   At the time of his conviction he had lost his job and, according to his lawyer, his life savings.   In the world of claims, we refer to such people as judgment proof as they likely don’t have the assets to pay even a portion of this verdict.   Andrews best hope is on the owners of the hotel.   Based upon a $55 million dollar verdict, the 49% liability translates into their owing about $27 million dollars.

However, this may prove to be a long and arduous path.   As private companies, the financial statements of West End Hotel Partners and Windsor capital are not publicly available.   While they are in a very lucrative industry, it is unknown if they have the means to pay this judgment.   There is most likely some insurance money available, but the extent is unknown.   There is also the possibility that these companies may file bankruptcy.   While those proceedings generally won’t discharge the monies owed, they could put up a serious roadblock to how quickly she gets paid and at the end of the day it is up to the bankruptcy court to determine which creditors get paid, and in what order.

Another big hurdle is the venue.   Tennessee courts, including the Supreme Court, have limited joint and several liability. If there were joint and several liability, any of the parties could potentially be liable for the entire verdict.   Without joint and several, the parties are responsible for their own share, in this case 49% or $27 million dollars.

It is almost certain that the hotel companies will appear the jury award on the grounds that it is excessive.   While there is no doubt that Andrews suffered emotionally, there is also no doubt that her television career has, and continues to, thrive.   This may have a detrimental impact on the extent of the mental anguish that she is claiming.

Another roadblock will be the Tennessee Civil Justice Act that limits lawsuits filed after 2011 to $750,000 in many situations.   While there is significant litigation that has left this tort reform unsettled, it will likely be fodder for additional settlement discussions that are certain to take place during the appeals process.

Whether Andrews holds out, or accepts a lesser sum, remains to be seen.   This is a matter that the public has been following and an opportunity to share with those outside of our industry who the insurance and litigation process work, with both lessons in comparative negligence, as well as the litigation and appeals process.

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Chris Tidball is a claim consultant and the author of several insurance based books including Re-Adjusted, Blocking & Tackling and the recently released thriller Swoop & Squat.   To learn more visit www.christidball.com.

 

March 8, 2016 at 9:52 am Leave a comment

Driving Consistency in Claims Outcomes

crashcar1.jpgAs I speak with claims executives at various insurance companies their concerns are often quite similar with the commonality being lack of organizational consistency.   They lament that giving the same claim to different adjusters can result in markedly different outcomes.   This is true, as adjusters often perform claim related tasks very differently.

In any business there is a spectrum upon which employees perform ranging from outstanding to not so good.    This is part of the reason that we go through the annual exercise of performance reviews, so that those who exceed expectations can be rewarded, while those with opportunity for improvement can be counseled.

In the book Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary, it is suggested that there are A, B and C employees.   “A” employees are your future leaders.  These are the outstanding performers of today that consistently deliver over the top results.    At the other end of the spectrum are the “C” performers, where inconsistency and excuses find a home.    “A” players typically make up about 20% of an organization as do “C” players.   In the middle are the “B” players, typically 60% of an organization,  who do a solid job but need the occasional guidance and reinforcement to produce an “A” level product.

The most successful of organizations get stellar results by emulating “A” team behavior across the organization.    Think about it for a second.  Imagine the potential for improvement if all employees could perform just like the top performers.  What would that do to results?  How would that impact your claims handling strategy?

There are many challenges to replicating a behavior across an organization, most notably that of longevity.   As we often see in our organizations, “fire drills” tend to immediately yield results, but they are not sustainable.

Consider a scenario in which the latest mandate is to improve comparative negligence.    Adjusters will suddenly start assessing comparative negligence in many more files.  But are they applying it?    Consider mandates to improve subrogation referrals.   Suddenly the subrogation department gets inundated with new referrals, the majority of which are not collectible.

Herein lies the challenge.   Do we focus on the soup du jour, or claims item of the week, or do we try to fundamentally transform our organization from ordinary to extraordinary?   Achieving the latter can certainly be done.

The key is to adopt a process by which all aspects of claims best practices are identified and replicated across the entire claims organization.    Effective deployment of decision support tools, such as ClaimIQ, can not only accomplish this, but set the stage for markedly different outcomes based upon fundamental execution of basics.

Once the sought after claims behaviors are effectively modeled and deployed, they become institutionalized in the claims organization.   Longevity is also assured as claims based reporting will provide key details as to any outliers, which can trigger more effective claims audits.  By focusing on such outliers, the underlying issues can be more effectively remediated.

By focusing on the fundamental execution of claims, instilling the proper behaviors, leveraging proven tools and reporting, carriers will see a dramatic improvement in claims quality, consistency and outcomes.

 

Christopher Tidball is a casualty claims consultant and the author of multiple books including Re-Adjusted: 20 Essential Rules To Take You Claims Organization From Ordinary to Extraordinary and the recently released claims investigation thriller Swoop & Squat.   He has spent more then twenty five years in property and casualty industry as an adjuster, manager and claims executive.   To learn more, please visit www.christidball.com 

December 14, 2015 at 9:03 am Leave a comment

So you think you are dealing with a staged accident; now what?

staged accidentStaged accidents come in all shapes and sizes; the “drive-down”, the “sideswipe” and the “swoop & squat” being a few examples. They key to successfully uncovering these, and other types of scams is a prompt and thorough investigation.

As adjusters, our primary duty is that of a fiduciary for our insured. We owe them the obligation to protect and defend, which includes identifying potential fraud. We have a general duty to pay what is owed.   Not what the attorney demands, but what is reasonably owed for the claim that is being presented.

There are three main components that determine this amount.   Liability, specials and general damages. We must determine who is at fault and to what degree.   We must review the medical specials and other economic damages to determine what was reasonably related to the claim being presented. We must also make a consideration for generals, or pain and suffering.

As we have discussed in prior articles, there are a number of tools to assist adjusters on this front, ranging from Mitchell ClaimIQ for liability and generals to DecisionPoint for both pricing and identification of deceptive billing practices.

But there are times when a case lands on a claim professional’s desk and they just scratch there head. Something just seems amiss.   Generally speaking, if something doesn’t seem right, it probably isn’t.   The key to resolving such types of claims is to dig for answers. After all, that is what adjusters do.

The first step is to speak with all parties to the accident. This includes the insured, the claimant, the guest passengers and witnesses.   Look for inconsistencies in their statements.   When meeting claimants in person, look for evidence of a “script”.   This is a document that a “capper” will provide when orchestrating the loss. Often notes written on a piece of paper, it will tell the claim parties what they are to say to the insurance company.   Typically, when a script is taken away, the claim parties will not be able to answer even the most rudimentary questions about a claim, such as the location or the description of the vehicles involved.

Under most insurance policies, the insured has an obligation to submit to an Examination Under Oath.   It is tougher to get claimants who are attorney represented to submit to statements, although they would be compelled during the discovery process in the event of litigation.

Talking to each of the claimants is critical to making a final determination about the veracity of suspected staged accidents.   They should be asked not only about the location and the description of the vehicles, but about their medical treatment. I always found it helpful to ask them to describe the clinic, the doctor and to provide directions to the medical facility from their home or office.   These are very basic questions that a person legitimately involved in a car crash is able to answer without hesitation.

We must also look at, and document, the damages.   In some staged accidents, the vehicles are actually rammed together.   The capper will pick a location, such as a vacant parking lot, and the insured and claimant will ram the cars together to create the appearance of a legitimate accident.   In such cases the damage will match, but will be rather insignificant so as to not actually inflict injuries.   In other cars, two previously damaged cars will make the claim. In these situations, the damage often does not match.   Look for telltale clues such as inconsistent paint transfers.   A red car hitting a white car will not leave a blue paint transfer. Also look for evidence of old damage, such as rust.  Take measurements and document them with clear pictures of the damage.  Of course, when these suspicions are confirmed, it is best to refer to SIU or defense counsel for assistance with proper resolution of the claim.

In many instances proving a staged accident may be difficult.   In those situations where the accident cannot be refuted, a BI evaluation will have to be completed.   When reviewing the demand from the attorney, it is very important that all medical records are provided.   I always like to ask for a medical authorization up front, which attorneys may or may not provide.   The key is to asking, as it shows an aggressive good faith willingness to assist in the investigation of the claim and the gathering of documents.

When the medical records come in, it is highly beneficial to run them through proven bill review software, such as DecisionPoint or Smart Advisor, which can identify not only reasonable benchmark pricing for the jurisdiction, and duration based upon the diagnosis, but can provide flags for deceptive billing practices, such as upcoding, unbundling and modifier abuse.

It is always critical to look for prior claims, or prior medical treatment.   While injuries can happen in car crashes, there must be a mechanism for the claimed injury.   It is estimated that more than 85% of Americans will suffer from back problems at some point in their life.   Often this is simply part of the aging process, and there will be evidence of degenerative disk issues that aren’t related to the accident in question.

The medical lien must also be factored in.   Don’t lose site of the common practice of plaintiff attorney’s contacting the provider after settling with the insurance carrier to negotiate down the medical bills.   This should be factored into the negotiations, as only amounts reasonably related to the accident are owed.

When negotiating with the attorney, it is important to focus on the facts.   Who was at fault, and to what degree.   Improving comparative negligence recognition is low hanging fruit that can have a profound impact on the bottom line.   What specials are owed?   What the duration reasonable and the treatment necessary? Is pain and suffering owed, and how much.   Focusing on these aspects of the claim and evaluating each independently can provide an improved framework for negotiations, resulting in better outcomes that gives carriers a competitive advantage in the marketplace.

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Christopher Tidball is an author, speaker and casualty claims consultant. He has spent more than twenty five years in the P&C industry, starting as an adjuster and eventually moving into management and executive roles.   He is the author of multiple books including the recently released insurance fraud thriller Swoop & Squat and the ever popular claims improvement book Re-Adjusted: 20 Essential Rules to Take Your Claims Organization from Ordinary to Extraordinary! To learn more, please visit www.christidball.com.

November 3, 2015 at 9:03 am Leave a comment

What Coverage’s should you have on your vehicle?

What Coverage’s should you have on your vehicle?

The coverage’s that an individual needs is highly dependent upon their personal and financial situation.   The key to getting the right coverage’s is to understand them and to make an informed decision.   Most states have minimal requirements for liability coverage, and a few have requirements for personal injury protection.   Let’s examine each coverage and its applicability.

Bodily Injury Liability or BI coverage will provide protection to your or anyone meeting the definition of an insured under your policy.  It is important to read the policy definitions to understand who will be covered while driving your vehicle.   BI coverage is typically provided on a per person and a per occurrence basis, such as $25,000 per person and $50,000 per accident.  This means that the most the insurer will pay is $25,000 per person but not more than $50,000 in totality.   Policies can also be purchased as a combined single limit, such as $300,000CSL.   This means that the insurer will pay up to $300,000 in total, irrespective of the parties involved with no individual limit up the purchased amount of coverage.

Property Damage or PD coverage will provide protection in the event that you or anyone meeting the definition of an insured under your policy.   Most states have a requirement for a minimum amount of property damage coverage.   This coverage is provided on a per occurrence basis, such as $10,000 per accident.   It is important to note with the rising prices of vehicles, state minimums are often insufficient, so it is recommended that you consult with an agent to secure the appropriate amount of coverage.

Uninsured Motorist Coverage protects you or others as defined in your policy in the event that an uninsured driver causes an accident resulting in injury to you or other covered parties.   Like liability, this coverage will generally have split limits on a per person and per occurrence basis, although some carriers also offer combined single limits.   In some states this coverage can be offered as stacked versus non stacked.  Stacked means that your UM coverage can be multiplied by the number of vehicles on the policy.   For example, if you had $25,000/$50,000 UM stacked on four insured vehicles your coverage would be $100,000/$200,000.    Non stacked means that your coverage’s are what you purchased and the other insured vehicles would not come into consideration.

Under-insured Motorist coverage or UIM protects you or others as defined in your policy in the event that someone with limited liability coverage causes an accident resulting in injury.  Consider a situation where a person has minimal limits of $25,000/$50,000 but your injury is far more severe.   If you had UIM coverage of $100,000/$300,000, it would kick in to cover portions above the underlying at fault party coverage.   In some states you would be entitled to the full amount of your coverage, in others there may be an offset for underlying liability coverage.

Uninsured Motorist PD and Under-insured motorist PD, or UMPD/UIMPD, provides coverage to your vehicle in the event that an uninsured or under insured motorist causes property damage.    These coverage’s vary by state and availability should be determined through a local agent.

Collision provides insurance to your vehicle in the event of an accident, irrespective of fault.   This coverage typically has a deductible that is applied in the event of a crash.    If you have a $2000 dollar estimate for damages and your deductible is $500, your net proceeds from the insurer would be $1500 dollars.

Comprehensive provides insurance to your vehicle for damages other than collision such as theft, vandalism or floods.   Filing a claim under comprehensive is not considered a chargeable accident.   There is typically a deductible.   Some carriers provide specified perils only coverage as opposed to comp, so it is important to understand what those specified perils cover.

Personal Injury Protection or PIP provides coverage to the insured and others as defined in the insurance policy for medical expenses and related costs as the result of an accident.   It will coverage reasonable medical expenses and in some cases things like lost income, replacement or substitute services.   Only 13 states require PIP coverage.  In other states it is optional.  The coverage limits vary by state.

Medical Payments Coverage provides coverage to the insured an others as defined in the insurance policy for medical costs associated with an auto accident.   Medpay is available in most jurisdictions and can be purchased in some PIP states to coverage out of pocket deductible and copays.

Aftermarket Equipment provides coverage for non factory add ons to your vehicle such as new rims, a high end stereo or vehicle customization.    It is important to understand that an insurer is covering only what comes out of the factory in most situations.   If you have add on equipment, you will need to consider adding this coverage.

Rental coverage provides a daily amount, typically reimbursable, for rental charges incurred when your vehicle has been involved in an accident.  In some situations, there may be rental available through your carrier when the insured vehicle is inoperable.   This should be verified with your agent or insurer.

Towing Coverage will provide reasonable reimbursement in the event of a vehicle breakdown.   Coverage’s and limitations will vary by policy.

Roadside Assistance may also be available depending on the insurance carrier.

The big question now is how much coverage is needed and that depends on your individual situation.   It is recommended that you speak with a licensed agent or direct seller of insurance to determine exactly what is needed to protect your assets.   As a final disclaimer, the content of this blog should not be construed as legal advice.  If you have a legal question, please consult with an attorney.

ee insurance carrier.

The big question now is how much coverage is needed and that depends on your individual situation.   It is recommended that you speak with a licensed agent or direct seller of insurance to determine exactly what is needed to protect your assets.

August 21, 2015 at 9:15 am Leave a comment

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

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