03/14/00
Mike's Musings: Advance Payments or as the carriers call it (PIA)
I recently read the posting regarding " Chances of getting insurer to advance costs
on surgery" by a member of the list. In a prior musing I dealt with the issue
of advance payments, but I could not locate where I saved it in my PC, so I thought I
might comment on the issue once again since it is a very important issue to consider.
Advance Payments or as the carriers call it (PIA) Payment in Advance is rarely offered and
rarely asked for , however it should be clearly noted that many carriers as part of their
claims standards will offer advance payments. So the question is how do you get it,
since many carriers just tell you. " It is not our policy to advance pay"
Some pointers:
1. Get a copy of this Montana case, Ridley v. Guarantee National Insurance Co. (1997), 286
Mont. 325, 951 P.2d 987. In Montana a carrier must advance pay medical expenses when
the other parties liability is reasonably clear and the expense is casually related to the
accident. The rational is that under their Unfair Claims Practices Act, note that most
states all have the same wording, Prohibits an insurer from refusing to settle claims
under one portion of a policy in order to leverage settlement under another portion of the
policy. My recollection is that the court ruled that when liability is reasonably
clear you owe the damages, that being medical bills, they did not comment on wage loss,
the settlement comes later but you owe damages now.
Now, that will not get you a lot in California or other states, they could care less about
Montana, but the logic may be of assistance.
What works in most cases but not all but it will build a record:
1. Call the adjuster and explain the issue over the phone, ask them if
they will consider it. If the answer is yes most likely you will have to give up
something, full access to medical records, possibly an IME, limitations on amounts of
medical and time they will pay.
2. If they say no, it is not our policy, say thank you then write them
a letter. Set forth in exact detail why your client needs it, the economic hardships
they will have without it, the chance for an injury that will only get worse, it is in the
best interests of both parties, the carrier will not be holding their economic interests
superior to that of your client. But make sure you ask them to respond in writing
quoting their policy, ask them to explain their policy, is it a company policy, is it the
branch claims office policy, is it the policy of the adjuster, is it their policy on this
case? Make sure you offer something to the adjuster for the advance pay, such as
full access to medical, you will provide an advance payment receipt.
3. Set a time deadline and remind the adjuster of their duties to
respond and respond in writing
4. Review the Montana case and use the language as I recall it
was good and it should apply to most states Unfair Claims Practices Act.
5. If the adjuster turns you down go to the claims supervisor he or she
reports to, same letter, then up the chain you go, at each stage ask for a response in
writing, getting the to state their policy and in writing , always be the nice guy, keep
the ball in their court, always explain the hardships faced by your client and the
economic plight of your client versus the economic might of the carrier.
6. Make sure you explain to them that the must not use their inherent
waiting and money power to further their superior economic interests. Also ask them
since it is their policy not to pay in advance to confirm in writing they have not done so
in the past in any case as a matter of policy.
7. Keep in mind when a covered loss occurs, the carriers obligation to
pay is triggered, there is nothing in their policy that states there is no obligation to
pay until your client is done treating, ask them to quote for you what part of their
policy they rely upon to deny payment in advance, this is in addition to their company
policy on payment in advance.
8. Always remind them each and every time that they should not place
their superior economic interests over that of your client whose life is now in economic
turmoil due to the negligence of their insured.
9. It is true that claims departments provide a service that is
imbued with a public trust, are they living up to that when they deny payment in advance?
10. The carrier also has a duty to solve the problems of their insured,
payment in advance can serve to mitigate larger damages by providing needed medical
services now. For example claims adjusters who make claimants wait
unnecessarily will encounter hardened attitudes and more difficult settlements later and
increased damages.
11. Try to involve the claims representative in most cases they are not
personally involved, paint a picture that will get them personally involved and if they do
not get involved explain to them the impact of their lack of involvement.
12. Always tell them that your client deserves prompt and accurate
answers and that claims departments exist to provide customer service and their insured
who is a customer deserves to have his loss exposure lowered
13. They may not buy this, they being the front line adjuster, but
claims departments and specifically claims adjusters are responsible for assisting people
in presenting their claims to the carrier
In balance the pat answer is we have no legal obligation to do what your ask. The
legal issue is not my area, but the issue is broader in scope from my perspective they
also have a clear duty to make your client whole within their policy limits and the
trucking case quoted will have at least a $1,000,000 policy.
The duty of the carrier also extends to consideration of a public interest they serve,
insurance is in place to assist in times like this, not to create problems. In balance in
my opinion payment in advance is an issue that should not be overlooked and in certain
cases it is well deserved and should be paid.
Mike Cerf
Expert Witness Insurance Claims
Sherwood, Oregon
503-925-1937
mcerf@teleport.com
