Insurance companies use many different tactics to try to get out of paying claims promptly and fully. The tactics they use often depend on the type of claim in question.
There are two different types of claims in Michigan:
- Personal Injury Protection (PIP) Claims, and
- Bodily Injury and Pain and Suffering Claims.
Personal Injury Protection (PIP) Claims are claims for medical bills, lost wages, household services, attendant care, medical mileage, and various other expenses.
To try to get out of paying PIP claims, common “defenses” used by insurance companies include:
- Priority. This defense asks whether the particular insurance company in question is the actual company that is supposed to be paying for the claimant’s claims and services. It is usually raised by insurance companies in cases where the injured person is a passenger in a vehicle without an insurance policy that covers them. It is less viable when the claimant was in an accident in their own vehicle, or a vehicle in which they have coverage.
- Coordination. This defense is used in cases where the claimant has coordinated their auto insurance policy with their health insurance policy. Many if not most of the auto insurance carriers in Michigan offer a discount for coordinating health insurance policies with auto insurance policies, so many people agree to that coordination.
Unfortunately, what many people don’t realize about coordinating their health insurance and their auto insurance policies is that often times, when it comes to an auto accident, your health insurance will be considered “primary.”
What this means is that your health insurance is considered the primary source that should be consulted for claims. This gets complicated in auto accident cases due to the fact that some health insurance policies have auto accident exclusions—that is, they do not cover medical costs from auto accidents.
In a case with coordinated auto and health insurance, in which the health insurance policy is considered primary but also has an auto accident exclusion, the burden is shifted back onto the auto carrier. However, the auto carrier will often raise many issues and oppositions when this happens, often refusing to make any payments until these issues are fleshed out or “resolved.”
- Fraud. Fraud is another major defense used by auto insurance companies. Most often, they use this defense in cases where people make claims with the state of Michigan, when they don’t have their own insurance policy or an insurance policy that covers them otherwise through their home or spouse.
Insurance companies carefully examine the initial application that a claimant filled out for the state to assign them a carrier for their claims. If there is anything omitted on the application, or if there’s anything that can later on be deemed to be a misrepresentation of the truth, it could be used by the insurance company to negatively impact the claimant’s ability to receive benefits.
Fraud is sometimes also used as a defense by insurance companies in cases where a claimant does have their own coverage. There are several ways that insurance companies do this. One is by alleging that you were fraudulent in your initial application for your insurance policy.
A lot of times, insurance companies don’t initially double check or fact check what you put on your application for an insurance policy, even if they approve you. Once you get into an accident and make a claim, they start looking back at your initial application, searching for potential “fraud”, or areas that could be deemed misrepresentation of truth.
Many things can be considered “fraud” in this instance. Some examples include omitting people who are living in your household, or omitting people you were allowing to use the insured car. One of the biggest potential sources of fraud here in Michigan is when a person says they are living in one city (and shows proof to that effect at the time), but in reality are living in another city. In some cases, people misrepresent their address because insurance rates are given based on location, and they were trying to get a lower rate. If the insurance company finds evidence of fraud in any of these ways, they may be able to rescind your policy, deny coverage, and get your lawsuit dismissed.
Another part of fraud, which can apply whether you have your own policy or a state policy, is making a false claim for reimbursement. This could be reimbursement for anything you claim, whether it’s with the wage loss or someone helping you around the house or the cost of medical services. If the documentation that you submit to the insurance company has misrepresentations in it, many carriers use those misrepresentations to claim fraud and dismiss lawsuits once they have been filed.
Claims for Non-Economic Damages in Michigan are claims that are specific to bodily injury and pain and suffering. They can be pursued so long as you are under 50% at fault for the accident and otherwise qualify.
Insurance companies issue many similar defenses to get out of paying claims in these cases as they do in PIP cases. However, some differ and some play out slightly differently than they do in PIP cases. They include:
- Causation. This is the main defense insurance companies use in these cases. In this defense, insurance companies try to argue that the accident didn’t actually cause the injuries in question. To prove this, they do deep dives into the claimant’s past medical history. Usually, the “cleaner” your medical history, the harder it is for insurance companies to use this defense. They have less of a chance to say that you were actually suffering from your injuries prior to the accident if you never reported those sorts of symptoms or injuries.
- Threshold. Another defense often used by insurance companies in these cases has to do with the way the injuries affect your everyday life. In Michigan, when suing for bodily injury damages, the injury must meet the “threshold” of being a serious impairment of an important body function that is objectively manifested and impacts your ability to live your normal life. The main element that insurance companies usually focus on is whether the injury is objectively manifested, meaning documented and observable in a way that is objective rather than subjective.
For example, let’s say you have neck and back pain from your injury. If you go to a doctor and complain of neck and back pain but get no documented proof of an injury (such as test results that show you have back spasms, or MRI results that show the injury), then that can help the insurance company can argue that there is no objective manifestation of the injury.
Insurance companies also question the impact that the injury had on your life as a defense. They will discuss things you did before the accident and things you did after the accident. If there is no discernable difference in your lifestyle, and/or difference between the things you were able to do before and the things you were able to do after, they will argue that the injury did not have a serious impact on your everyday life. They will use that argument to diminish your potential recovery or argue that you have not reached the threshold in Michigan and therefore you are not entitled to pain and suffering damages at all.
For more information on Insurance Tactics To Diminish, Delay Or Deny Claims, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (248) 266-7600 today.