I’ve got to hand it to the auto insurance industry. The ideas they come up with to limit what they have to pay to injured victims can be quite brilliant. It’s no wonder their profits are so high.
The Low Velocity Impact Program is one of the most effective of the policies I have seen used by the auto insurance industry. If their policy strategists were paid according to the effectiveness of their ideas, I expect that the one who came up with this doozy would be wearing gold-gilded underwear.
The program applies to injuries caused in crashes where the speed change is less than 8 kms per hour. If you are injured in such a crash, your claim for pain and suffering and certain other losses will be flatly denied unless, in the view of the insurance people considering the claim, the injury was plausible.
When I say flatly denied, I mean it. It doesn’t matter how great a negotiator you may be. It’s a policy and they follow it.
Imagine your son or daughter complaining to you about headaches, neck pain and stiffness after being involved in a lower speed crash. Imagine sitting across a desk from an insurance adjuster who is telling you that the insurance company will not even consider your son’s or daughter’s claim for compensation because it doesn’t seem plausible that your son or daughter suffered an injury.
Of course there was an injury that was caused by the crash. Your son or daughter didn’t have headaches or neck pain before the crash, and those symptoms occurred within hours after the crash. Your son or daughter was able to participate in gym class before the crash, but not after the crash.
Is your son or daughter making it all up because there are no visible muscle spasms, no broken bones, no visible bruising, and he or she was previously healthy with no medical conditions that would make an injury in a lower speed crash more likely?
Is it fair to deny a claim on the basis of such arbitrary criteria?
Now there’s a loaded question! I’ve said several times in my postings to date that there is no obligation on insurance adjusters to be fair when negotiating pain and suffering claims. To the contrary, their duty is to pay as little compensation as possible.
Being unfair by trying to convince injured claimants to accept less compensation than they are legally entitled to is one thing. This policy is about a flat denial of the claim. It’s about not even entering into the negotiation.
This type of policy was first instituted in British Columbia on August 10, 1992. From then until April 22, 2003, it applied not only to pain and suffering claims, but also to the very basic treatment benefits that everyone injured in a crash should be entitled to.
Due to complaints of unfairness, the office of the British Columbia Ombudsman investigated the policy. The conclusion of the investigation was that:
“ICBC acted in an arbitrary and unfair manner in creating and maintaining a Program from 1992 until 2003 that erected unfair barriers to recognizing claims stemming from a large number of motor vehicle accidents.”
Was an investigation really necessary to reach the conclusion that such an arbitrary policy would be unfair?
The investigation did produce some tangible results for crash victims. The Ombudsman s office referred a number of claims back to ICBC for review, and that led to payments of over $1.2 million to crash victims whose claims had been unfairly denied. Of course, the Ombudsman’s office looked only at cases that had been brought to their attention. Regretfully, ICBC refused the recommendation of the Ombudsman’s office that they review additional cases of unfair denial of claims that might later be brought to their attention.
The investigation also led to ICBC making changes to the policy, effective April 22, 2003. The policy no longer applies to the very basic treatment and disability benefits that are available regardless of who is at fault in the crash, though it still applies to the typically much more substantial pain and suffering and other claims of innocent victims. The criteria of when the policy applies was also changed, but in my view not significantly. The 8 kms per hour threshold remained, and having the insurance people use their own sense of plausibility as to whether an injury occurred is a recipe for unfairness, particularly since these types of injuries are usually invisible.
What recourse do car crash victims have when their claim is arbitrarily denied? It’s the same recourse they have to avoid the unfairly low settlements that come from negotiating their claims without legal assistance. Unfortunately, these types of cases are less attractive to most lawyers, who get paid a percentage of the claim, as the size of these claims is generally lower and if ICBC holds to its policy guns right through a trial, these are expensive cases to take on.
It is these types of cases that have given me the most satisfaction in my career. There is something beautiful about taking an outright denial from a huge insurance corporation and turning it into reasonable compensation for a deserving client.
The special report of Howard Kushner, the then Ombudsman, can be found through the following link: www.ombudsman.bc.ca.
Published March 4, 2007 in the Kelowna Capital News
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