Junk Science:
No or low property damage = no injury
 The major premise of this paper is
that all insurance companies will use any excuse to keep insurance
premiums and profits.
1) State Farm’s use of
paper reviews to deny medical
payments claims [1]:
Dateline, a syndicated television show, on June 23, 2000, revealed
the results of a 15 month investigation of a paper review of
medical payments claims by State Farm. This one hour presentation
revealed that State Farm and all big automobile insurance companies
used paper review companies like Comprehensive Medical Review (CMR)
in San Diego, California that had produced 27,000 reports over the
past 15 years for State Farm and many of the nation’s the
leading insurance companies.
The investigation revealed that the reports were written by CMR
employees with no medical training who used 160 stock computer
paragraphs that were slanted to deny medical payments benefits to
State Farm insured’s. The doctor on staff would look at and
sign 50 medical reports in one hour, about 1 per minute. Also, that
State Farm adjusters would call CMR to help author the medical
reports to reduce the amount of money paid on the claim.
An economist hired by someone suing State Farm analyzed nearly 100
claims State Farm sent to CMR that proved how paper reviews profit
State Farm. He found that accident victims on average had about $
7,400 in medical bills. CMR’s paper review recommended
slashing those claims. In the end, State Farm paid on average only
$ 4,400, saving State Farm about $ 3,000 in medical bills every
time it used a paper review.
Based on the above information, if State Farm saved about $ 3,000
per medical payments claim by using CMR, then, 27,000 reports
during a 15 years period times $ 3,000 equals about $ 81,000,000.00
profit to State Farm by cutting medical payment benefit that were
owed to their insured’s.
2) Deliberate fraud by State Farm
in repair of insured’s vehicles [2]:
In 1999, an Illinois jury awarded a $ 456 million dollar judgment
against State Farm and the Judge Speroni added another $ 730
million dollars because the company deliberately defrauded
policyholders by requiring body shops to use inferior crash parts
to repair their wrecked vehicles. The combined award totaled $ 1.18
billion dollars.
During the trial, evidence proved that State Farm used inferior
crash parts for 11 years. State Farm testified that in 1997 alone,
such parts saved its customers $ 237 million dollars. If we
multiple $ 237 million times 11 years, State Farm defrauded its
customers and made a profit of 2.6 billion dollars by forcing body
shops to buy inferior crash parts instead of original equipment
manufactured parts to repair policyholder vehicles.
3) Junk science, no or low
property damage = no injury:
Background leading to
scam:
Prior to 1980, a minor collision could cost an insurance company
thousands of dollars to repair a 5 MPH rear-end property damage
loss. For a few vehicles, the cost to repair a vehicle in a 5 MPH
collision as of 2000 had not changed much. A series of studies by
the Insurance Institute of Highway Safety [3] reported in the year
2000, showed that many vehicles with the new energy absorption
bumpers showed no or less than $ 500 damage but a few had thousands
of dollars of property damage at 5 MPH. For example, a mid-size
utility Mitsubishi Montero had $ 2,609 in property damage in a low
speed crash rear-end crash at 5 MPH into a flat barrier.
To save billions of dollars in property damage repair costs in low
speed automobile collisions, the insurance lobby in Washington DC
was instrumental in persuading the National Highway Traffic
Administration (NTHSA) to implement the “No
damage” 5 MPH Bumper Standard Part 581 in 1980 [4]
forcing car manufacturers to design “No damage”
bumpers in low speed collisions. In 1983, the 5 MPH standard was
reduced to 2 ½ MPH. [5]
Birth of the
scam:
Between 1980 and 1990, the insurance industry saved billions of
dollars in repair costs because they influenced NTHSA to pass the
no damage bumper for low speed collisions. The industry knew that
low speed property repair costs were expensive and for some
vehicles cost thousands of dollars to repair prior to 1980.
As of 1990, the issue became how do we save money on claims of
whiplash injury in low speed collisions. Prior to 1980, photographs
of property damage would show substantial property damage in low
speed auto collision and evidence of property damage was consistent
with claims of whiplash injury. Some insurance claims person or
defense attorney realized that if a photograph of the rear bumper
or the car showed no/low property damage, we can argue
“No property damage, no injury.”
This is the basis of the scam. The industry knew that the amount of
force is the same in a low speed impact prior to 1980 and after the
implementation of the “No damage” bumper. The only
difference is that the property damage is virtually non-existent
after 1980.
Proof that “No property
damage, no injury” is a scam:
The insurance industry routinely hires defense bio-mechanical
experts to contest minor impact soft tissue injuries. (MIST) The
basis of this defense strategy is based on no/low property damage
to the vehicles.
The Brault study [6], a low speed human crash study, has refuted
every basis of the the defense strategy of no property damage, no
injury. Forty-two persons were exposed to rear-end impacts speed
changes of 2.5 mph and 5 mph. Objective clinical deficits were
consistent with whiplash associated disorders (WAD), were measured
in men and women at 2.5 mph and 5 mph. The test vehicles were hit
in the rear over one hundred times without any property damage.
After impact, with no braking, the force of the impacts caused the
vehicles to roll forward 3 meters into a gravel pit before
stopping. [7]
A study quoted in the Brault Study, Ryan and coworkers, found that
automobile occupants who were unaware of the impending collision
were 15 times more likely to have persisting WAD 6 months post
impact. The Brault study participants were hurt even though they
knew of the impending collision. If an injury victim is unaware,
his neck muscles are not tense, the impact causes a 10 lb head to
be snapped backwards within a tenth of a second at a force of 6.7
to 12'g’s of force. [6]. This necessarily means that a 10 lb
head is loaded with a force comparable to 67 lbs to 120 lbs within
a tenth of a second. This is why injury victims get hurt in a rear
end, no property damage collision.
Plaintiff attorneys throughout California are starting to file
motions in limine or making a request for a Kelly-Frye hearing to
exclude the defense bio-mechanical testimony based on junk science
that no property damage proves no injury. Courts throughout
California and our nation are routinely excluding this junk science
testimony.
Carl Berkovitz, Esq.
Mr. Berkovitz has been practicing law for 25 years and is a former
AllState Insurance Adjuster.
References:
1. The Paper Chase by Dateline NBC New, televised June 23,
2000.
2. Los Angeles Times news story, October 9, 1999.
3. Insurance Institute for Highway Safety crash tests reported May
24, 2000.
4. National Traffic Highway Safety Administration Standard Part
581, 1980.
5. National Traffic Highway Safety Administration Standard Part
581, 1983.
6. Clinical Response of Human Subjects to Rear-End Automobile
Collisions, 1998.
7. Head/neck Kinematic Response of Human Subjects in Low-Speed
Rear-End Collisions.
1997
This web site is
designed for general information only. The information
presented at this site should not be construed to be formal legal
advice
nor the formation of a lawyer/client relationship. Persons
accessing this
site are encouraged to seek independent counsel for advice
regarding
their individual legal issues.
|