Automotive Insurance Industry Reform


You may think that the following problems within the insurance community do not affect you, but you will be wrong.  Please continue to read and then please send a copy of this White Paper to your Congressional representative. 



In November of 2016 there was an auto accident in Pima County, Arizona.  The accident was reported to the respective insurance companies {Infinity and Farmers} and since no one reported any injuries, and no citations were given by the Pima County authorities one would have thought that was it; the claim would have been paid and vehicles repaired.


The Circumstances:

Driver One was exiting a Walmart Neighborhood parking lot.  He was in the Left Turn lane and stopped at the lot’s Stop sign waiting for traffic to clear.  It did, and the only vehicle on his Eastbound side of the highway was just turning onto the highway from a cross road some 500 or more feet to the West.  Driver One checked the center isle Westbound Left turn lane and found that it was empty, no vehicles were in the turn lane or signaling to be in the turn lane.  Driver One therefore exited the Walmart lot and got to the third lane of the five possible lanes when Driver Two, a young man in a Black Jeep with Tan Roof cut from the westbound fast lane into the path of Driver One.  Driver One swerved to the right and braked to a stop, Driver Two continued into the Walmart lot.


Driver One looked for traffic and not seeing any moved to the left about five feet, only to then see Driver Three the vehicle that had turned at the cross street.  Driver Three was not paying attention to situation and at the last second braked and slammed into the front of Driver One’s vehicle.  Driver Three then backed up and tried to leave the scene by passing to the left in front of Driver One.   Driver One immediately jumped out of his vehicle and started taking pictures, this forced Driver Three to stop. 


Driver One and Driver Three then exited the highway to a vacant lot, and Driver Three called the Pima County authorities.  Driver Three had a young man, about college age in her vehicle and he immediately claimed he had hit his head on the windshield.  The Pima County police arrived and the reports were taken.  Everyone claimed to have been wearing a seatbelt, and no one claimed to be injured. {Remember Driver One had photos of the accident that happened at less than 5 MPH}.  Driver One waited to see if the passenger was going to call for Medical Help, he did not. 



First failure was that the Pima County policeman ‘refused’ to record Driver One’s accounting of the accident, i.e., the cause, which was Driver Two’s illegal turn, or Driver Three’s failure to yield to traffic that was already in the intersection and had the right of way, i.e. Driver One.


Second, the Pima County policeman failed to issue citations to any of the drivers, and failed to seek out the Black Jeep’s driver.  He also put the accident on the report at 30 MPH when in fact it was at 5 MPH. 


Insurance Company Failures:

Driver One called his Farmers insurance agent to report the accident and was told to call Driver Three’s insurance, i.e. Infinity and report it to them.  This was a mistake and it gave Infinity a chance to deny the claim, before Farmers even had a chance to make a claim.


Farmers additionally sent Driver One to a distant authorized repair facility that refused to do the estimate without hearing directly from Farmers.  Driver One returned home and contacted Farmers for the authorization, and then returned to the repair facility.  The repair facility did not put the vehicle on the rack to look at underneath damages.  They only took some pictures and called it a day. 


Meanwhile the Farmers claims representative rushed to judgment the claim put in by Driver Three’s insurance, Infinity, and came to the conclusion that Driver One was at fault. 


The authorized repair facility then changed their estimate adding hundreds to the repair cost.  Driver One then sought out another Farmers authorized repair shop and found one three miles from his home.  It was now January and the vehicle was still not repaired.  This repair facility totally refused to estimate the vehicle when it was brought in, and said they would ‘call’ within two days, the call never came.  Driver One then looked up Driver Three’s repair shop, 5-Star Collision and they got the job with a true and complete estimate that included putting the vehicle on the lift and checking the frame, which was bent.  Farmers initially refused to accept the estimate, but changed their mind and finally did.  The vehicle was repaired; it was now February 2017.


Premium Increase:

Farmers immediately following the return of the vehicle raised the monthly premium by nearly 100%.  Driver One had two vehicles insured for about $165 per month, and now could only insure one of the two for the same $165.  Driver One put in a formal complaint and was told that Farmers would NEVER reverse a judgment.  {Right or wrong}. Driver One over the next 12 months wrote and spoke to several Farmers representatives about the accident, and even took video and drew complex traffic patterns of the situation that lead up to the accident, only to be told he violated several laws and then that the ‘Black Jeep’ was a ‘Phantom’, i.e. a fantasy of his imagination, i.e. lie. 



The passenger that claimed he hit his head to Driver One, but never to the Pima County authorities went home and called an attorney, he is 17 months later still claiming head injuries to the tune of thousands of dollars.  It is now, as of this writing 18 months and the case is still not settled. 



Farmers reported the accident as being the fault of Driver One and therefore, Driver One has to pay an increased premium fee for three years from the date of the accident, and he cannot obtain insurance from any other insurance company at a better rate due to Farmers report being distributed within the vehicle insurance industry.



Insurance Reform Needed



The purpose of this request for Insurance Industry Reform is to bring to your attention the dire need for a law changes that will provide tens of millions with more efficient automotive insurance than what the industry currently provides.


This brings us to the point of requesting insurance reform that actually protects those clients, the insured that are unfortunate enough to be involved in an accident.


01-01 Reporting:

Driver One asked for the insurance company’s written file on how they came to the conclusion that he was solely at fault; and how they came to the conclusion he broke two or more laws.  They refused and will only release this information under subpoena if taken to court. 


Reform Needed:

This has to change; if a person is accused of causing an accident or of a crime, then he or she has a right to see the accuser’s reasons, and the right to then dispute this. 


01-02 Reporting:

Driver One asked Farmers for a copy of the statement about the accident by Driver Three, i.e., her version of what happened.  This information was either not collected by Farmers, or if it was they refused to submit a copy to Driver One.  


Reform Needed:

This has to change; if a person is accused of causing an accident or of a crime, then he or she has a right to see the accuser’s reasons, and the right to then dispute this.


01-03 Reporting:

Driver One asked Farmers for the name of the reporting agency they used to file the claim that resulted in Driver One not being allowed to obtain reasonable priced insurance from a competitive company.  Farmers denied this request, and one of their representatives even stated that there was no such reporting agency.  Independent insurance sales agencies claim otherwise. 


Reform Needed:

This has to change; if a person is accused of causing an accident or of a crime, then he or she has a right to know to whom the accident is reported.


01-04 Reporting:

Driver One asked Farmers for a copy of the report they submitted to the reporting agency they used to file the claim that resulted in Driver One not being allowed to obtain insurance from a competitive company. 


Reform Needed:

This has to change; if a person is accused of causing an accident or of a crime, then he or she has a right to see the accuser’s reasons, and the right to then dispute this and to enter into the reporting agencies files a ‘rebuttal’ of the charges.


02-01 Cameras:

At the time of the accident there were parking lot cameras at Walmart and there were Traffic light and lane cameras at the crossroad some 500 feet distant.  One would have expected Farmers to have requested or subpoenaed the videos from one or both as a simple protection to Farmers and their client, Driver One.  They did not, and when asked about it by Driver One, Driver One was told that they would look into it.  They did, and they found that the Walmart camera was not focused on the parking lot exit to the highway.  They then said the traffic camera video was too old and probably erased. 


This failure to do due diligence harmed their client Driver One as if they had done their job at the time of the accident the accounting by Driver One would have shown that he did NOT violate any laws, the Driver Two and Driver Three both did.  By not doing this, the insured and the insurer are now fighting an injury claim that can result in costing tens of thousands, rather than a ‘fender bender’ claim that cost fewer than three thousand.


Reform Needed:

Therefore, it should be made mandatory, no matter how bad the accident that the insurance companies immediately seek local camera and obtain the videos for future reference and settlements of claims.


02-02 – Videos:

Farmers claimed that the DOT {Department of Transportation} did not have a video of the accident, even though there was more than one camera at the intersection about 500 feet distant.  Some 18 months later Farmers representative told Driver One that they, Farmers, would be contacting the DOT to get a copy of the video that day so that the Black Jeep and the remainder of the story could be verified. 


Reform Needed:

All accidents that are on DOT camera video should not only be recorded and kept for a minimum of three years, but it should be mandatory for the video to be distributed to each of the accident participants and their respective insurance companies within one to three days of the accident.


02-03 – Camera at Exits:

There was a dispute with the Farmers Insurance Company over the legality of a Stop Sign and Left Hand Turn lane at private property vs. public property.  In this instance there are two identical Left Turn Intersections, one on Walmart’s property at the exit and one a block away on a public street. For some reason Farmers considers it all right to enter the highway from the public road rather than from the Walmart exit.  


Reform Needed:

Private companies that have Stop Signs and Lane Markings {Right or Left or Both exit lanes marked} should be required to have at a minimum one camera aimed at the exit.  And if the local county, state, city, or town okay’s the exit markings, then it should be a legal exit with the same rules as that of a public markings.


03-01 Breaking the Law:

Driver One has been accused by Farmers of breaking two laws, one of not stopping at a Stop sign and the second of entering a highway without yielding to traffic.  These two laws are what were used to justify the rate increases for three years. 


Reform Needed:

There must be ‘proof’ of wrongdoing, either by the police report and associated citations, or by video that absolutely shows the circumstances of the accident.  Without either of these items, there should be, and cannot be, any conclusion based on some Insurance Adjusters ‘guess’. 


Reform Needed:

If the insured disputes the report of the local authorities, i.e., police report, then the insured insurance company must within 48 hours contact the police officer that did the report and investigation and present the insured’s version of the accident.  Omissions or discrepancies from the police report must be questioned and properly answered.


04-01 Medical Claims:

Driver Three’s passenger waited until after the accident report written by the Pima County officer to make a medical claim.  {Remember he told Driver One he had ‘hit his head on the windshield’}  No one at the time of the Pima County officer taking notes claimed to be injured and everyone claimed to have been wearing a seat belt.  The vehicle was a late model Chrysler 200 and if one checked, he or she would have found that it would be impossible to hit one’s head on the windshield when wearing a seatbelt. 


Was this a scam?  Well, it could very well be, as no one knows for sure if the passenger was injured, or if injured was it from before the accident, or was it after the accident, i.e. staged?


Reform Needed:

The insurance company should be required to do some investigating of the situation and not just take one’s word about an injury, especially if it is a ‘hidden’ injury as in this instance.  The claimant’s past history, both legal and medical, should be investigated to see if there are prior claims and to what extent each was verified and settled.  The claimant’s neighbors should be interviewed to see if the claimant is ‘faking’ the injury.  If it is found that the claimant is ‘faking’, which is ‘Fraud’, then he or she should be charged with a crime and fined or jailed and those that knowingly allowed this should also be charged.


Reform Needed:

If a person is making a claim for injuries, then both the claimant’s and the insured party’s insurance companies must have the right to have the claimant examined by their respective medical doctors or qualified medical personnel.  This should be done within 24 hours of the claimant making the injury claim, and should be part of the insurance records.


Reform Needed:

If ‘Fraud’ is found then the person {In this instance Driver One} should be exonerated of any liability, all increases in his or her insurance premiums should be reimbursed, and any adverse reporting should be purged or otherwise nullified.  {Especially to and in the files of the reporting agencies}


05-01 Made Whole:

Prior to the accident Driver One’s vehicle, a 2005 Hyundai, was worth approximately $4,500 on the open market.  This was due to its excellent shape and the fact that it only had 58,000 miles on it. {In 2017}.


After the accident the value dropped to approximately $2,500, the value of the repairs, and it now is more difficult to sell or trade due to having been involved in an accident.


There is on record another accident case where her insurance company only reimbursed the person not causing the accident for 2/3 the value of the damaged {Totaled} vehicle.  She ended up having to take a second mortgage on her home in order to replace the totaled vehicle with one of like kind and mileage.


Reform Needed:

If a person is not the person causing the accident, then the insurance company of the person causing the accident should be 100% libel for making the non-causing person ‘Whole’.  This should include the cost of the damages, cost of lost wages, cost of medical required, cost of loss of use, cost of a rental, and the cost of the lost of value of the property {Diminished Value}, i.e., damaged or totaled vehicle and its contents.


06-01 Timing:

Driver One’s vehicle was in limbo for nearly four months due to the inaction of Farmers.


Reform Needed:

Regardless of fault, the damaged vehicles should be estimated, approved, repaired, and warranted for up to a year, all within 30 days of the accident.


07-01 Loss of Use:

The accident caused the front right passenger door to be jammed in the closed position, thus preventing the use of the passenger seat for the months between the accident and when the vehicle was repaired.


Reform Needed:

The insured should be compensated for the loss of use of his or her vehicle, including partial use such as doors being jammed shut and thus, adjacent seating not available to passengers, or for other entry.


08-01 – Fees {Premiums}:

The driver of a vehicle that is accused of causing an accident will normally have his or her premiums increased, for one to three years {Farmers does this for three years}.  The combination of the person’s deductible along with the fee increases many times will exceed the actual cost of the claim or repair of the vehicles involved. 


A person pays insurance so that he or she is covered in the event of an accident.  He or she has for days to years been paying premiums with the expectation that if he or she has an accident the cost will be deducted from the total amount already paid in premiums


Reform Needed:

One should not therefore have to ‘pay’ again for the privilege of being protected.  And one definitely should not have to pay increased premiums where the increase premium’s total exceeds the total cost of the claim; thus allowing the insurance company to profit from the accident at the insured’s expense.