Claims of pain can prove to be a pain

A reader asked me in a recent letter what exactly defines an automobile accident injury.

It may seem like a quarrelsome question, given horrific accidents that we often see on freeways. But in the bizarre world of automobile insurance, the answer is hardly obvious.

An accident may evoke mental images of bloodied drivers, broken arms or legs or perhaps serious cranial fractures that cause debilitating handicaps for a lifetime.

But an alternative example may be a person who walks away from a minor collision and then days or weeks or months later claims an injury and demands a large monetary settlement for pain and suffering.

Both of these cases represent definitions accepted by government officials who investigate accidents, compile statistics and make decisions about public policy. The insurance industry, meanwhile, operates with few direct rules that define injury.

The gentleman who wrote the letter to me said he had caused a collision, but it was at no more than 2 mph in a parking lot. Yet, it has cascaded into an injury claim against his insurer and a surcharge on his insurance policy that will cost $2,000 a year for at least the next three years.

The driver of the other vehicle, a Mercedes Benz, filed an insurance claim, saying he may have injured himself after the accident when he turned around to check on his daughter. He got a $350 settlement from the insurance company to go away. No medical examination ever took place and no police report was ever written.

How could this possibly be an injury accident, the letter writer wonders?

The National Highway Traffic Safety Administration reports that 3.03 million people were injured in highway accidents in 2001, though it is at the local level that those injury reports are taken, and every jurisdiction has its own standards.

An injury occurs when a person says he was injured, according to the policies of many departments. The California Highway Patrol, for example, has four classifications for injuries in its standardized accident forms: fatal, severe, visible and complaint of pain, said Lt. Steve Padilla. Pain is the only injury category in which police make no independent judgments.

“We don’t really try to assess whether that pain really exists,” Padilla says. “We don’t have the luxury of saying, ‘You’re faking it’ and walking away. We ask everybody if they would like medical assistance. You could be responsible if somebody were to keel over and die.”

Obviously, a lot of people are faking it, according to Candysse Miller, spokeswoman for the Insurance Information Network of California, a trade group.

Miller said she was involved in an accident last year that resulted in no apparent injuries.

The driver of the other car asked Miller out on a date and when she declined he mysteriously developed bruises and bumps. She is now paying a surcharge on her own insurance.

“It is a sorry state of affairs,” Miller said. “People get out of an accident and feel a little stiff and say they are injured. It is something the insurance industry is struggling with.”

Such claims are driving up the insurance rates of honest people by millions of dollars every year, she said. Nonetheless, an injury in the minds of the insurance industry, Miller said, occurs when a claim is paid out.

But how can an insurance company justify surcharging a policyholder for an injury claim when there is no evidence that an alleged injury was even treated by a doctor?

California Department of Insurance regulations allow each individual insurance company to establish its own practices, but the department will investigate consumer complaints of unjustified premium increases, said Carrie Beckstein.

Under state regulations, a person can file a claim against an insurer for a full year after an accident. The department does not attempt to define an injury claim, and it remains the fundamental right of an insurance company to settle claims made against it.

But Beckstein said the Department of Insurance does expect insurance companies to exercise diligence in making sure that injury claims are documented and justified if a policyholder is going to be surcharged for a settlement.

Beckstein said the 100% surcharge made against the writer of the letter seemed high and recommended he file a complaint with the department. The Department of Insurance’s hotline is at (800) 927-HELP.

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Write to Ralph Vartabedian at Your Wheels, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012; e-mail: ralph.vartabedian@latimes.com.