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  • Richard L. Duquette

Junk Science - Insurance

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.


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.



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