Equality on the Road Less Traveled | Do Black Lives Matter to Insurance Companies?
In this #metoo and Black Lives Matter culture, it has come to light that so many of the day-to-day activities that we are blindly engaged in, were and are filled with oppressive stereotypes, profiling, and just plain racism. A lot of the spotlight though has been shined specifically on the disparate treatment of African Americans by law enforcement personnel and on the immigration laws targeting the Hispanic community. However, there are other devious and systemic racist measures hidden in plain sight that are equally as destructive to our surface-level message of inclusion and tolerance.
One such example of these divisive and industry-wide racist measures can be found in the automobile insurance claims process, where everyday individuals of ethnic, non-Caucasian descent are forced to accept and/or deal with reduced claim valuations for simply just being from a diverse ethnic background!
Before we delve into that issue though, some background into the claims process is warranted. Typically, after an accident, the parties involved will file claims with their own insurance company and with the insurance companies of the other drivers. Those insurance companies, through assigned adjusters, will then investigate the claims, gather evidence, communicate with the involved drivers and witnesses, if any, review documentary evidence, such as police reports and written statements, then ultimately discuss the matter amongst themselves to determine which driver is liable for the accident, or in the alternative, discuss how to apportion fault between the drivers (such as 50% liability to each driver if both were determined to be equally at fault). After liability has been determined, the parties will negotiate property damage claims, and, if an injury has occurred, they will also negotiate compensation based on bodily injuries sustained, including medical expenses and lost wages, as applicable. All of these negotiations require a substantial amount of communication between the parties, i.e., the drivers, the witnesses, if any, the insurance adjusters, the body shop representatives, the medical service providers, etc.
In order to facilitate the valuation of claims, insurance companies have been using automated claims valuation software programs such as Colossus, Decision Point, and Claims IQ since the 1990’s. The problem with these programs is that their accuracy is predicated on the accuracy of the inputs submitted into the program. What this means to us, the consumer public and the potential victims of negligent driving, is that claim’s valuations may be modified and altered by including any number of incorrect, assumptive, and purposefully harmful data. It doesn’t end there though. After the valuation software generates a base claim value, the adjuster then has the ability to add in their own subjective thoughts, feelings, and opinions about the claimant – including potentially stereotypical and racist assumptions about said claimant – to further modify the claim in a downward direction (meaning they can reduce the valuation). Why would adjusters do that? Well their motivation is simple, to save their insurance company money, which is their primary task and a significant work element for which they will be reviewed on at a later date in their employment cycle.
In my seventeen years as an attorney, and in my current practice as a personal injury attorney, I have always let empirical data drive my decision-making. Even as I write this article now, I have some hesitation that I may be jumping the gun — maybe I need more data, perhaps more cases need to be reviewed, or maybe I should just let a few years pass and see if things change. Whatever my reactions are to writing this article, the truth is that I, as well as many others in the industry, have long known that insurance companies routinely give lower valuations on claims submitted by ethnic, non-Caucasian drivers involved in motor vehicle accidents. I don’t make that statement lightly. I honestly wish that I didn’t have the basis to make such a statement, but facts just don’t lie. Looking at our own law firm data, we have discovered that in accident claims where the only significant difference is the ethnicity of the claimant, the shocking reality is that there is a valuation disparity negatively affecting those individuals of non-Caucasian descent. How much is this disparity? Among hundreds of cases that we have compared, just in rear-end accidents alone, where there were primarily soft-tissue injuries to the driver/claimant of the front vehicle (meaning that there were no broken bones and injuries were primarily to muscles, tendons and ligaments), we see those non-Caucasian claimants had on average more than a thirty percent (30%) lower initial case valuation from the relevant insurance company than did a driver/claimant of European ancestry.
The lower case valuation was consistent across many of the major auto insurance companies, including State Farm, GEICO, Mercury, Allstate, Progressive, Farmers, Infinity, and Access General, to name just a few. What this seems to indicate is that the level of prejudice against drivers of non-Caucasian ethnicities has reached systemic proportions, in that it is now being built into the foundation of the auto insurance claims industry to intentionally harm claims from entire ethnic groups. This is not something we as a community should tolerate and just accept. It harms us in every portion of the country, and even more so in areas where driving is part of everyday life – such as in Southern California. We need to begin this discussion and spread the message that our culturally diverse community will not be marginalized by the insurance industry and its leading commercial entities; we will not remain quiet and accept the daily oppression while being marked as “more likely to commit fraud in the process of an accident claim,” or “less likely to fight a reduced claim valuation,” or “more scared of the process,” or “more likely to be intimidated by the court system,” or the really insidious label of being “less of a credible witness due to lack of English proficiency.” It’s time we contact our elected officials, political leaders, and anyone holding relevant influence to ensure that all claimants, regardless of race or national origin, get a fair shake during the auto insurance claims process.