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Apr 08, 1998
Consumer Group Says Insurers Wrongly Blame Their Own Insureds for Auto Accidents In Order to Raise Their Rates
Calls on Consumers to Send in ComplaintsIn what may be the least exposed form of insurer abuse, insurance companies often wrongly determine their own policyholders to be "at-fault" in car accidents in order to boost the premium charged to the policyholder. This is the conclusion reached by consumer advocate Harvey Rosenfield and his Proposition 103 Enforcement Project ("Project"), a consumer advocacy group dedicated to insurance reform. Over the years, the Project has received numerous, angry complaints from consumers about how they were unjustifiably found to be "at-fault" for an accident by their own insurer without due consideration of all the facts.
"What most people don't realize is that insurance companies are highly motivated to find their own policyholders 'at-fault' for a collision," stated Sabrina Kim, staff attorney for the Project. "For example, if a claim is likely to cost more to defend than it is worth, the insurer may just pay the claim without much investigation, because in the end, the insurer can more than recoup this amount by simply raising the rates of its policyholder over a three-year period," explained Kim. While this nets savings for the insurer, it means much higher auto insurance rates for the insured over the next three years as a result of "fault points" being attributed to her driving safety record and/or the loss of her Good Driver Discount.
Insurers basically follow three mandates when their policyholder is involved in an accident: first, deny the claim by the other party in its entirety; second, deny any bodily injury claim by the other party; and third, find their own policyholder to be at-fault. "It's a classic 'heads I win, tails you lose' situation between insurers and their own insured," stated Sabrina Kim. "If the insurer can't get the other party to pay for the accident, the insurer will collect the amount (and then some) from its own insured in the form of higher rates. This pits the interests of the insurer against that of its own insured, which explains why 'at-fault' determinations are so often based on minimal facts, poor follow-up of witnesses, and gross misstatements of the law, such as "the driver who rear-ends another is at fault in the collision."
Common consumer complaints received by the Project include the following:
Consumer should send a copy of the "at-fault" notice they received from their insurance company, along with any correspondence between them, their insurer and/or the California Department of Insurance to:
1750 Ocean Park Boulevard, Suite 200
Santa Monica, CA 90405
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