Attorney embarks on survey to probe auto insurer practices

Is it just me?

That’s what personal injury attorney Daniel A. Faneuf began to wonder as he became increasingly concerned with a trend he had noticed: auto insurance companies — some worse than others — that seemed to be instructing their adjusters to frustrate the claims process to an unnecessary degree.

“Someone should do a survey,” he remembers thinking.

But the Boston lawyer resisted the idea that that someone should be him.

Finally, however, he could bear it no longer. A few months ago, Faneuf fired up his postage meter and mailed out a brief survey to nearly 3,000 Massachusetts lawyers.

The response rate so far — a little over 1 percent — has not been overwhelming, Faneuf acknowledges. Where the mailing does not have to do with a pending case, busy attorneys or their assistants may be setting it aside or sending it to the recycling bin, he figures.

Nonetheless, early responses confirm the trend he had been seeing, Faneuf reports.

The two questions at the heart of Faneuf’s survey are:

“In your professional opinion, which auto insurance company conducting business in Massachusetts do you believe is most likely to employ tactics that result in unnecessary lawsuits against their insured?”

“In your professional opinion, which auto insurance company conducting business in Massachusetts is most likely to employ bad faith or deception in their claims handling process?”

According to the early respondents to the survey, who spoke with Lawyers Weekly on the condition of anonymity, one disturbingly common tactic is lowballing reimbursements for medical expenses.

For example, there might be $20,000 in medical bills in a particular case that have not been paid by some other source that should be accounted for in a settlement offer.

An insurance company might say, “We’re only considering $5,000 because we think the hospital charged too much,” Faneuf says.

Were the case to go to trial, the insurer could bring forth an expert to whittle away at the medical bills and pay something less than 100 percent.

“But traditionally, insurance companies would include [an amount close to full payment of the medical bills], and there was not an issue,” Faneuf says.

One attorney says he has had an auto insurer draw the line at paying out for medical expenses at twice the Medicare reimbursement rate — even if the injured person is not on Medicare, and without consideration as to whether a provider would find such a payment acceptable.

That same attorney adds that there would seem to be no excuse for such a posture, given that it has been 15 years since the Supreme Judicial Court fleshed out the types of evidence that would be admissible to set the parameters of a “fair and reasonable charge” for medical services under G.L.c. 233, §79G, in the case Law v. Griffith.

Practitioners say that problematic practices are particularly prevalent in District Court, with damages below its $50,000 jurisdictional limit.

While in theory G.L.c. 176D and 93A can and have been used to try to address such practices, those tools are less effective in District Court, attorneys say.

“For a client whose case might be worth, realistically, around $5,000 to $10,000, they can’t [use 176D] because by the time you sue, you do the depositions, maybe you need an expert, … there’s no money left for them, and the insurance company knows this,” Faneuf says. “So, time is on their side.”

To beef up the data he’s collected so far, Faneuf hopes other attorneys will respond to his survey. An online version is available at honestlawoffice.com/survey.

Faneuf says he would want to see more survey results before making any definitive claims. But the early returns indicate that insureds have a far greater likelihood of getting sued if they have insurance policies with certain companies.

“That’s something I’d like to know about [when] purchasing insurance,” he says.