Last January my wife was in a minor car accident. She and her father had just left his house and were on their way to St. Petersburg to visit her brother, who was in the hospital. While sitting at a red light, they were rear ended by a woman in a small truck. 

Neither my wife or her father were hurt. Damage to her vehicle appeared relatively minor. The rear bumper had a severe indentation, and the headrests in her car “deployed” by opening up in a clamshell fashion; a safety feature apparently designed to prevent whiplash in just such an incident. It was a safety system we didn’t even know we had.

The woman who hit them was flustered, and stated she would just pay cash for the damage as she did not want to involve her insurance company, Travelers Insurance. They exchanged basic information, and in an admittedly colossal error, left without filing a police report.  

My wife and I discussed it that evening, and we decided the best course of action would be to handle it through our own insurance company, State Farm. They would take care of the damages and pursue recovery of both their expenses and our deductible from the responsible parties. We’ve always had excellent service from State Farm, and this wasn’t our first subrogation rodeo. About 15 years ago I was hit by a driver who, despite providing proof of insurance to police, was actually uninsured. It took well over 6 months, but I received a full refund of my deductible and rental replacement through State Farm.

As expected, State Farm took care of repairs for the vehicle promptly. The bumper needed replacement, and the headrests had to be reset. Total costs were just over $1,400. My wife has a very low deductible, just $100, so our out of pocket was minimal. 

In April, a representative of Travelers left a message asking my wife to call. I had her first clear it with State Farm before calling them back. She gave her account of what happened, and the Travelers representative said something to the effect of “Oh, that is different from what we have”. 

That should have been a clue.

Yesterday my wife received a letter from Travelers, informing her that her claim was being denied, as their investigation determined she was “100% liable” for the damages because she improperly backed into their insured.

I realize it is possible, even likely, that they received false information from their customer, the woman who for some reason did not want to use her insurance to begin with. But to call this an “investigation” seems very far fetched. No one spoke with my father in law, who was in the vehicle when it was hit. The body shop manager told my wife that the headrests are designed to deploy only in “significant” rear end collisions, similar to air bags. A sensor in the system “identifies a rear-end collision of defined impact severity,” and then “enables springs inside the head restraints which serve to move the head up and forward”. He said deployment of the restraints indicated they had taken a pretty good jolt. She would have to be backing up at a pretty impressive speed to make that happen.

And of course, someone should have probably questioned why one would decide to suddenly back up in such a dramatic fashion while waiting at a red light. 

The lack of a police report was undoubtedly a detriment here, and the denial itself is not a shock. But rather than indicate conflicting explanations and a lack of supporting documentation as the basis of a denial, they just simply declared my wife at fault, and in effect have accused her of a wrongdoing she did not commit.

Denying claims in the insurance industry is part of the normal course of business. It happens all the time, and often for good reason. Fabricating lies in support of a denial, or replicating those lies in the process, just serves to feed the negative image of the industry.

And it just pisses people off.

Personally, we have recourse in this case. We can sue the woman in small claims court, and that is our likely course of action. Although our insurance company absorbed the brunt of the loss, that amount should be recovered, as we (and they) were ultimately not responsible in this case. In court the real facts may be ascertained. My father in law, a board member and former Chairman of our county’s largest health care system (and second largest employer), should make a highly credible witness. It is in that environment where we will have the opportunity to establish the truth about where liability lay. It’s not about the money. Now it is about the principle.

Some will view this missive as an attack on Travelers. It isn’t. It is helpful advice for a company and an industry. We already are cast in a negative light by the nature of what we deal with. Products and services provided by the insurance industry usually come into play at the point of conflict and loss. There are winners and losers in that world, and negative impressions will be left. Let’s not make it worse on ourselves.

If you must deny a claim, be damn sure you are denying it for the right reasons, and then convey those reasons honestly. Conducting a sloppy and incomplete investigation, or intentionally hiding behind lies and fabrication does nothing for the image of your company or industry. 

Let’s not so willingly give people legitimate reasons to hate our industry.

Update from Bob: This morning Travelers reversed their decision and confirmed they will be issuing payment to State Farm for the loss. It turns out their insured did initially tell them my wife backed into her, but then stopped returning their phone calls. They also tell us she had two at fault incidents in 2014, so it is pretty clear why she did not want her insurance involved. My wife spoke to the adjuster this morning, and it appears there were some mistakes in the process. Apparently my wife’s statement in April was in the adjusters notes, but missed when the denial was determined. 

Also, the information on the headrests proved to be the key in this situation. I misspoke in the article when I indicated a body shop manager told my wife about the headrest features. It was a State Farm adjuster who told her Mercedes Benz headrests will only deploy in a rear end collision. The Travelers adjuster had not reviewed that, and upon confirming immediately reversed the denial.

This exchange and reversal was the result of my wife pursuing an explanation, not the existence of this article. My wife tells me the adjuster was very friendly and helpful, and I appreciate the fact that they extended that consideration to her. When a company quickly corrects an error, it speaks well for them, and I want to be certain to provide that credit.

I believe my initial point, however, that denials should be based on the known facts and not inaccurate assumptions, holds true. Properly delivering bad news is better than delivering bad news badly. All carriers should probably make sure they are doing what they can in that area.