Burdensome excessive injury claims
Garth A. Rattray, Contributor
There has been a noticeable increase in people (represented by individual lawyers and legal firms) making personal injury (PI) claims on insurance companies for motor vehicle crashes (MVCs). There was a time when doctors became involved in the management of their own patients that were victims of MVCs. With the recent groundswell of claims, some doctors (specifically chosen by lawyers) end up dedicating inordinate amounts of time to such cases.
Physicians cannot arbitrarily decide which patients they see. Consequently, for a while, like several other physicians, I, too, was seeing a wide variety of MVC victims. A few were my own patients, but the vast majority were patients that were being ushered through the medico-legal system by the rapidly growing MVC 'industry'.
There is nothing inherently unethical about how legal teams secure their (contingency fee) business. They utilise a very efficient network of personnel, including law-enforcement officers, emergency workers, auxiliary hospital staff and (private and public) medical personnel. They encourage and shunt crash victims into being examined, investigated, treated and a prognosis made with a view to seeking optimal treatment protocol and making a claim on insurance companies.
Obviously, we all want the very best treatment for injured patients. We want them returned to their former (pre-injury) physical and psychological state. However, the problem emerges whenever the process becomes a financially motivated one. Under those circumstances, the various players in the network become driven by enlightened self-interest.
Seeking handsome payouts
Consequently, whereas formerly, victims of fairly minor injuries would claim directly on the relevant insurance companies, now it appears as if most victims claim through their legal representatives (who, in turn, seek handsome remunerative costs for themselves and the entire medico-legal team).
Seeing the trend in rising PI claims, the Insurance Association of Jamaica recently completed analysing the statistics regarding premiums and PI claims. Between 2007 and 2011, insurance premiums written for motor vehicles increased by 29 per cent, while the total motor vehicle claims rose by 33 per cent (from $3.9 billion to $5.2 billion). However, on closer examination, from 2007 to 2010, premiums increased by 17 per cent but claims increased by 39 per cent.
From 2007 to 2011, PI claims rose by an astonishing 73 per cent (from $1.1 billion to $1.9 billion). Taken as a percentage of total claims, PI claims increased from 27 per cent in 2007 to 37 per cent in 2011. Obviously, PI claims are directly and significantly contributing to the recent rise in our insurance premiums.
I know that many people feel taken advantage of by insurance companies. The actuarial science behind the rates are beyond all but a very few of us. Although we get 'no-claim' (among other) discounts and accident forgiveness from some insurers, clients don't understand the 'excess' (deductible) that they must pay out of their claims. The long rigmarole involved in payouts is extremely irksome.
Consequently, many victims erroneously view insurance companies as adversarial, rich entities with inexhaustible resources. Some engage in 'compensation-itis' (feigning or embellishing symptoms for financial reward). However, in the long run, milking the system only makes us all suffer.
The current feeding frenzy is unsustainable. Already, the new national Budget has made owning and operating a motor vehicle even more expensive. Increasing insurance premiums will be burdensome and drive up inflation. That's the last thing that we need.
Insurance companies need to garner client confidence by simplifying and speeding up reimbursements and clear-cut PI claims. People with inconsequential injuries should avoid making unnecessary claims. Those with minor injuries should first claim directly on the insurers. Victims should only seek medico-legal intervention for moderate to serious injuries and/or in situations where the insurers fall short of their responsibilities.