I wanted to share my insurance claim experience, regarding my bike accident. Hopefully it will provide some benefit to others who may be victims of a similar situation. I am not an attorney… nor to I play one on TV… I am simply sharing my personal experiences. I am not advocating my experience was the “right” or “wrong” way to settle a claim… rather it’s just the way I settled my claim.
Let me start with the end of the story first… approximately one year from my accident I was able to come to an agreement with the car insurance company who provided coverage for the young man who ran over me. I signed waivers saying I released the insurance company and the driver from further responsibility, and then they covered my outstanding medical bills and sent me a check for the balance. Going forward I’m responsible for any other costs associated with the accident (i.e. medical bills).
The simple answer would be to hire a personal injury attorney to help you with a settlement. For most people, this is probably the best route to follow. For me personally, I decided I wanted to attempt to settle it myself first. I did talk to a personal injury firm locally, and found out their rates were 35% of the claim, plus court costs. I also am fortunate enough to have a friend who is an attorney locally, who suggested that I consider working on the settlement on my own, with a backup plan of going to contingency based attorney only if I ran into an impasse. He recognized that I am extremely analytical (i.e. geeky) and that I would approach it unemotionally. In Iowa, you have two years to file a claim, so I had some time to work out a settlement. The driving factor on deciding to do this on my own wasn’t the contingency fee, but rather that I personally feel that as a society we collectively are to quick to hire a lawyer and file lawsuits. As a business leader, I have had a few of baseless suits filed on our business (that were dropped later), and have worked through workman’s comp claims. I have seen how time consuming and contentious these situations can be, and was hoping (maybe naively) that I could avoid some of these issues.
I was fortunate and did some things early on that helped me a lot with my negotiation strategy. My wife and I took a lot of pictures at the hospital. All of my injuries where photographed in detail. We took some video as well. I kept daily pain journals, detailing exactly what hurt, how bad (on a 10 scale), what I was able to do and not do, how it impacted my life, how well I slept, etc. I also made weekly videos showing my right hand/arm (lack of movement… here is an example) and general discussion on pain levels. Most of this was done on my iPhone. Pictures and videos are easy to make, and much of my original notes were taken using the voice conversion process, not requiring typing. I also got all my X-Rays and CT Scans in digital form from my doctor, all my medical reports, for reference. In retrospect, I could have even taken more pictures and videos… I don’t think you can have too much. This record helps you remember things in detail, and could be used in a trial if necessary.
About two weeks after the accident, I received a call from the claims adjuster for the car insurance company. They asked me some general questions about the accident, and asked if they could meet with me to discuss the accident. I agreed, and he came to my house about four weeks after my accident. He wanted to tape the recording, which I agreed to accept, if he provided me a copy of the recording. He agreed, and provided me a transcript a few weeks down the road. It was a fairly long conversation, maybe 45 minutes. In general, he asked questions about the accident itself (what I was doing, what I was wearing, time of the morning, sun position, what I remember, what damage I had incurred, how I was feeling, how much I exercised in the past, what I did for a living, etc.). In essence, he was trying to get general background information on the claim about me, the accident, and my likely damage.
I was prepared for the discussion, as I had done some research and established some negotiation positions early. I gave him copies of some of the photographs of my injuries… big 8 x 10″ color prints… and let him know I had a lot more. I gave him copies of photos of my broken bike. I had printouts of my Althlinks data showing that I had a history of triathlons and running that was now in jeopardy. I had a printout of my Garmin data, showing that I had gone from about 28 mph to 0 in 2 seconds when I was hit, and how my HR dropped down to 38 while my body went into shock.
It seemed that he often phrased questions to minimize the impact of the situation, for the recording. For example, he’d say something like, “Your leg is broken, but the expectation is that will heal and not present problems down the road.” I’d respond that “The doctor’s have not said that I won’t have future problems associated with my ankle, and there are many medical studies showing that breaks and even soft tissue damage are associated with a much higher frequency of future arthritis.”. He focused on whether I was visible … sort of implying I might have some responsibility for the accident or that his client wasn’t responsible. He started discussing sun glare, and I corrected him that since the driver was going North and the sun was rising in the East, sun glare was not an issue. He also discussed that my bike was grey, and helmet white, and I reminded him that my shirt was bright red. He also had some really detailed questions that would have been almost impossible to answer, had I not done a little research in advance. For example, he asked me how far I was away from the truck when I realized he was turning toward me, in feet. My response was, “well, according to my GPS data he hit me within 2 seconds when I tried to brake, and at 28 mph I would have been traveling at about 41 feet per second, so somewhere around 80 feet.” I also made sure along the way I explained how I was conscious of being hit and conscious as I was flopping around like a rag doll as the truck was running over me, as I wanted that captured in the recording.
As we got close to the end of the conversation, I asked about how much insurance they had and my concern that he’d have enough coverage to pay my claim. He quickly ended the interview and stopped the tape, seemingly to avoid having this as part of the transcript. He agreed to ask the insured if they could release the information to me, and said he thought it would be an adequate amount.
Overall, my suggestion is before actually doing the claims adjuster interview, make sure you have the accident clearly in your mind. What you were doing, what you saw, distance estimates, time of day, etc. It is also good to have an idea of long term consequences from the accident (i.e. limited motion, nerve damage, arthritis, etc.). Talk to your doctor about this before and do research on the web. It’s not a matter of being pessimistic, but rather being able to counter any positions that the adjuster may put out to minimize the damage. Remember that the interview is taped and could come back as part of a trial. Take your time with the answers.
If I would have done something differently, I would have liked to have read the actual accident report prior to the interview. I received a copy of the report just after the interview, and found that the insured admitted to the police that he had seen me up the road, and then implied he lost sight of me in traffic. Basic geometry could prove that this couldn’t be true, plus I could see him as he made the turn into me. Admitting he had seen me would have been great to bring up in the interview, and would have ended all the questions about the sun, my clothing color, etc. I was able to obtain a copy of the accident report at the local police station. They also confirmed that he was fined for the accident.
After the initial interview, the claims adjuster would periodically call me for an update. I would tell him about my recovery, pain levels, new broken bones they found, etc. I kept things analytical, as I knew he would have access to all my medical information anyway. He was given approval to talk about what the insured had for coverage (amount & type). They had a single limit maximum, which meant that they had a fixed dollar figure that was used to pay pay out for my medical bills, property damage, pain and suffering.
I methodically kept daily records of my pain level, how much work I was missing, my impact at work (not being able to type with two hands), how much rehab I was doing, impact on home life, and impact on my sleep. It was time consuming, but I felt it would be necessary to have the details if it went to court.
After about 3 months I brought up settling my property claim, and he agreed. I took my bike to a local bike shop to have them evaluate it. Basically my front Zipp wheel was crushed, my rear wheel was cracked, my front forks were crushed, the aerobars were crushed (which were actually crushed into my left leg), seat scraped, pedals scraped, etc. The bike shop basically said the bike was totaled, as it wouldn’t be worth replacing parts as they were unsure if the main frame was cracked. I sent this report, along with all my pictures of the bike, plus a spreadsheet showing costs of a new bike, new Zipp wheels, new Edge 500 (which died on impact… my 900 XT survived), new saddle, shoes, clothes, etc. He informed me that they only had to pay depreciated cost, not replacement. It’s hard to estimate a depreciated cost of the bike, so we started at new. I told him there would be value in having the old bike, as I could use it to set up my new bike without having to get refitted. He agreed, but he reduced the claim amount to compensate for the scrap value of the bike and also for depreciation. We agreed on something about $500 less than what I had submitted. I felt this was reasonable overall, as I was initially concerned when he started talking about depreciated costs he’d offer me half of what a new bike was worth… which would have been a big problem.
Fortunately I was then able to buy a Cervelo P3 at a local bike shop that was 2 years old and had never sold. I sent my old Zipps back to Wheel Builder, who “rebuilt” them at just over half the cost of new wheels. Rebuilt meant scrapping everything, reusing my existing power meter, and giving me new Firecrest Zipps. I talked to Garmin about exchanging my Edge 500 under their refurbished program. I explained it wasn’t a fault of there equipment, but rather I had been in an accident, and they traded my Edge 500 at no cost. I decided to keep my old P2C as a trainer bike exclusively for the basement, and ordered forks and aerobars on Ebay. I thought that if the main frame is cracked and fails, I’ll be stationary when it happens. I reused my old scraped up seat, wheels and pedals. In the end, for what I received on the property claim, I ended up with a new P3 dedicated to outdoors and racing and my old P2C as a dedicated indoor training bike. I really appreciate everyone’s help from Bike World, Wheel Builder, and Garmin.
The property claim is fairly straight forward and was relatively easy to negotiate, and clearly was a small part of the overall claim amount. My medical bills continued to climb as I continued to go to the doctor and rehab. First… a little background on medical bills. I was very fortunate as my health insurance company paid all of my medical bills initially. Often health insurance companies balk about this, once they realize it was caused by an accident. They want the insured’s car insurance company to pay the bills instead. Of course the insured’s car insurance company will not pay anything, until they resolve the final settlement. This can be used as a strategy to try to speed up the settlement process, if you are being squeezed with high medical bills. Being covered by your own health insurance keeps this from being an issue. The other reason it is important that the bills are run through your own health insurance is because of the negotiated discounts the insurance companies have with the health care providers. For example, my hospital bills for about 6 days in the hospital as about $80,000. The negotiated rate that my health insurance company actually paid was about $9,000. My total medical bills added up to about $120,000, and the actual reimbursed amounts were about $33,000. Since this was a single policy limit claim, if these wouldn’t have gone through my health insurance company, the car insurance company would have reimbursed the hospitals and doctors and un-discounted rates… costing me the difference… about $83,000 of my eventual settlement amount. Of course my medical insurance company had no intention of not being reimbursed for their payments, so they hired a law firm to subrogate (make a claim) against me personally and the car insurance company, against the amount owed.
I also talked to my own car insurance company about the accident. Even though I was not driving a motor vehicle, I had some additional coverage. I had a $10,000 medical coverage, and $250,000 of underinsured motorist coverage. After describing the situation, they opened claims for me on both, just in case I needed either medical coverage (not covered by my health insurance) or if the total coverage the insured’s car insurance didn’t cover my overall costs.
I continued to keep my spreadsheets up on a daily basis. Eight months after the accident (February), I had a pretty good handle on my long term impact. In a nutshell, I would have some permanent damage to my right arm/hand, including nerve damage, limited motion, lower strength, and pain. I would likely have arthritis in my hand, and may have it in other joints as well. Down the road the doctor expected to fuse my right wrist, and may need to operate on my left wrist to repair it as well. By that time I had completed all my therapy, and only had very infrequent follow up appointments. Physically my fitness was starting to come back. I had been able to compete in a couple of indoor triathlons. I decided to start working on a settlement offer.
I spent about 2 weeks putting together a letter to the insured’s car insurance company.
I included a summary of the accident, details of my injuries, expected limitations, copies of photos, copies of my spreadsheets, and medical references off the web supporting my claims. Basically converted all the spreadsheet into impact on my time (lost time at work, lost efficiency at work, lost time at home, lost time sleeping, lost time due to fitness loss, etc.), which I then converted to dollars based on an hourly wage rate. The letter was 46 pages long, and filled with data… yes, I am a geek.
My adjuster let me know he received the letter, and then said he needed to talk to their attorneys, due to the size of the claim. Then they said they needed copies of my tax returns for three years. I argued against this, as I had already given them W-2’s as part of my settlement letter (to substantiate my hourly rate used in my claim).
They gave me a very low offer, saying they wouldn’t offer more without my tax returns. I eventually gave them my tax returns, as they explained they would be part of any trial if we did have to go to trial. They came back with a larger offer, but still substantially below what I was expecting. I asked for justification for their number, based on data. The answer I got was… “this is based on experience based on jury awards, not on data.”
So, my economic justification based on lost time was out the window. Of course it would be used in a trial, but I realized that it was complicated, and wasn’t sure a jury would follow (or have the patience to follow) all of my supporting data. I had served on a jury for a personal injury claim about 10 years ago, and had a feel for how unpredictable a jury could be. My next approach was then to create a model of how much it would cost them if we went to court, assuming a max payout by the car insurance company plus court costs. I also reminded them I had underinsurance coverage, so the incentive to go to court was the full policy limit plus my auto insurance’s underinsurance policy (that would create a larger incentive for a personal injury attorney to get involved). I based the cost estimates on a legal cost study I had found on the internet, and provided the supporting references. They came back with another counter offer… closer, but not to where I felt was fair. I felt we could negotiate back and forth forever, and simply said… “let’s split the difference, and move on.” The adjuster called back and agreed.
In the end, I think it was a reasonable settlement. I really had no interest in going to court, and reliving everything again. My case is complex, my justifications based on a lot of data, and juries can go either way. I don’t think they wanted to go to court either, with all the data, photos, journals, etc. I had kept. In the end, I ended up around where I would have been after attorney’s fees… assuming a maximum payout by both the insured’s auto insurance and my own auto insurance (underinsurance), without having to go though attorneys and a trial.
They paid my outstanding medical bills first. My auto policy had covered some of my therapy not covered by my health insurance (there was a limit on how much therapy I was allowed), so the insured’s insurance company had to pay off both my auto insurance company and my health insurance company (actually my health insurance company’s legal firm). They obtained releases from them, and then from me. They sent me a final check, and we all moved on. All in all, it was an educational experience for me, and although it was a long and drawn out process, I was glad I decided to settle the claim on my own.
I’ve had a series of specific questions on my settlement, and have decided to share a folder that contains copies of my two claim / settlement letters to the insurance company (removing specific personal information) and a copy of a key email message sent later near the end of the negotiation phase. Hopefully this helps to clarify the approach I used and also demonstrates that it does take a lot of time and research to effectively establish your position to begin negotiations. I’ve also included some of the research documents, and some additional links are shown at the end of the email document.
The folder is located here.