Getting Employees on Board
cident is the right thing to do, you can see
huge gains in performance.
Fortunately, there is a higher purpose
in assigning comparative negligence, and
not just for the reasons that you might
think. We all know that every dollar reduced from the payout or collected in
subrogation goes straight to your bottom
line. When you overpay a claim, the company loses money. You can start a project
for that reason and get good results. You
can only get great results if you can communicate all three reasons why settling
claims with comparative negligence is the
right thing to do:
E You have a contractual obligation to do
E People’s lives are at stake.
E It is true—you are giving your company’s
Let’s start with the last thing first: you
are giving your company’s money away.
Remember that about one third of all
cases have shared responsibility. However, industry data suggests that significantly less than 10 percent of all cases
are settled recognizing the causation
of both parties. The same study shows
that for the average insurance company,
every case that is not settled with comparative negligence costs over $1200 in
claim payments that should have been
avoided. If there were 6 million crashes
in 2005, over $1.2 billion in incorrect
payments were made to parties whose
comparative negligence was not considered in the overall settlement.
So, if the average insurance adjuster
handles 50 claims per month— 20 of
which are property damage, 20 of which
are first party collision in a pure comparative state, and 10 are bodily injury—each
adjuster could correct costs over $50,000
by settling just 12 percent more of the
cases with comparative negligence.
Instead of building profits, surplus, and
the company as a whole, where does that
money go? What is noteworthy is that it
is not going to the claimant. For the most
part, the overpayments you are making
in liability go to the profits and surplus of
the claimant’s insurance carrier.
The claimant’s carrier, however, is also
your competition. Giving the company
this money is like giving your girlfriend
$100, and her using the money to buy her
other boyfriend dinner. It is about way