Why Is the Insurance Company Offering So Little for My Injuries?

The Dirty Truth About Insurance Companies and Unfair Settlement Offers

If you have been the victim of an accident and have been injured as the result of another person’s negligence or through no fault of your own, you may be in the midst of dealing and negotiating with an insurance company. As a victim of an accident you did not cause, you are likely entitled to obtain compensation for things like medical bills, property damage, lost wages, and pain and suffering.

Insurance companies often fail to make reasonable offers that clients find acceptable. There are many reasons for this, but at the end of the day, injured persons with legitimate claims for compensation scratch their heads at how and why the insurance company can get away with offering so little when they are clearly on the hook.

Why Is the Insurance Company Offering So Little?

The simple answer is that insurance companies are in business to make money. You probably think that an insurance company’s job is to protect its clients by negotiating, settling, and paying reasonable claims against their customers. These businesses like to project the image that “you’re in good hands” or “on your side,” which sounds wonderful as a marketing strategy.

The unfortunate truth is that as a for-profit business, an insurance company’s primary responsibility is to its shareholders. The insurance adjusters are expected to pay you less in order to save them more. This directive means that insurance adjusters are paid to find ways to wiggle out of paying you what you deserve by using a variety of techniques, such as:

  • Rushing you to make a recorded statement right after your crash when you’re likely confused and physically unable to think clearly
  • Manipulating these recorded statements to make it seem you are to blame or that you’re not really that hurt
  • Questioning the validity and severity of your injuries by claiming the forces of the impact couldn’t have caused your condition
  • Hiring private investigators to follow, photograph, and otherwise record you engaging in activities that might make your claim less credible
  • Asking your friends, family members, and coworkers to record statements about your activities and injuries in an attempt to catch you lying
  • Delaying their response to your claim application to frustrate you
  • Offering insultingly low settlements and telling you that you can’t do any better
  • Telling you that you don’t need an attorney to help you
  • Dragging out the negotiations in the hopes you’ll give up and take what they offer.

Remember, the insurance adjuster’s job is to get you to accept as little as possible or completely deny your claim. Think of it this way: If conducting 20 frustrating and fruitless phone calls with you can save them $20,000 (as a crude example), they will easily consider this a win.

When the Car Insurance Settlement Offer Is Too Low

The primary reason why your first and subsequent settlement offers from the insurance company are too low is simple: money. No matter how badly you are hurt, how clear the other driver’s liability is, or how high your bills are, the insurance company is only concerned about its bottom line. It exists and thrives as a business by decreasing the amount of money it pays out on any given claim.

Because the insurance company is beholden to its shareholders’ desires to turn a profit, the top-down directive says that adjusters can and should take full advantage of opportunities to “minimize losses.” This outweighs any questions about what is fair and reasonable to an accident victim. An insurance adjuster is paid to ignore what might be the morally right thing to do and, instead, minimize the amount of losses the insurance company will potentially stand to pay out.

The adjusters hope to wear you down and get you to close as fast as possible. Ultimately, their salary pays for them to spend time on the phone pushing back and misleading you about the details of your claim. Their performance is based on how much they can avoid giving you as a settlement.

How Do You Respond to a Low Settlement Offer?

An insurance company knows that the costs associated with taking your case to trial mean that a case has to be worth a certain amount for a lawyer to see it as economically viable. Even though most personal injury law firms offer a contingency fee structure, they must consider how much your settlement will likely be before they take the case. Contingency means they accept your case before they get paid and take their fees out of your final payment.

If you have already gotten a low initial offer from the insurance company, it’s worth your time to speak with a skilled car accident lawyer to review the offer. They can tell you if you could reasonably expect to push for more. They can give you their best advice, even if they don’t agree to take the case. When you are armed with that information, you have more power to negotiate for a fairer settlement from the insurer.

The insurance company knows that the out-of-pocket costs that a lawyer has to incur in order to take a case to trial may exceed the amount the attorney will be reasonably able to obtain in court.  In this case, it would be bad business for an attorney to take the case. Understanding whether you have a strong enough case to go to trial is part of the discussion during a free consultation.

Why Is the First Settlement Offer So Low?

Small cases often get the worst treatment from insurance providers. Suppose you have been injured in an accident and sustained minor injuries. In that case, the insurance company may be lowballing you because they know that your case isn’t worth enough for a lawyer to get involved and certainly not to take it all the way to trial. This is often the case when the injuries are minor and the property damage to your car is minimal.

In these situations, the injured party and attorney lose the leverage of threatening to go to trial, which is a level of risk and uncertainty that makes the insurance company have to put some money into the case. However, it’s still smart to take advantage of a free case review with a qualified auto accident attorney to understand what your best options are.

Why Do Insurance Companies Pay So Little?

Insurance companies work so hard to pay you so little because, again, they owe their allegiance to the shareholders, not injured victims. After an accident involving another driver, you can expect to be contacted by an insurance adjuster (yours and the at-fault driver’s). Many clients report that an adjuster for the other driver’s insurance called them mere hours after the accident to “check on them” and “make sure they are alright.”

While this may sound and feel like a caring gesture, they’re hoping to catch you before you’re aware of any serious injuries. They know that you are either still in shock and don’t know how badly you’re hurt or that you’re full of adrenaline and don’t feel any pain yet. They also bet on your thinking out loud and saying things that could damage your claim. This is why they want a recorded statement before you’ve had time to gather your thoughts or get a full medical evaluation.

If they can get you to say you aren’t that badly hurt or you’re not in pain, they will consider that written in stone and use it against you. If you come back with more severe injuries after being seen by your doctor, they will claim you hurt yourself some other way that doesn’t have to do with the accident. They know the insurance industry laws and their policies and will count on your being untrained and honest.

What You Say Can Hurt Your Claim

While you should definitely be honest in your conversations with the insurance adjusters, that doesn’t mean you have to tell them everything right away. Remember, you could have serious injuries that haven’t shown up in the few hours after your crash. You can easily and unknowingly damage your case by simply responding honestly to the adjuster’s questions.

If you tell them that you’re okay or that you don’t think you were hurt badly, they have (for their purposes) a recording of you stating that you were uninjured in the crash that they will use against you when the rubber meets the road. The symptoms of severe medical conditions, such as neck, back, and head injuries, often don’t begin until 24-48 hours after the accident.

Developing these conditions and needing treatment for them will be ignored if the adjuster chooses to play hardball. They will tell you that they have you on record stating that you’re “okay” following the accident. This is a cheap trick, but it works much of the time and is one of the tactics they use to get you to drop the claim and walk away.

Why You Shouldn’t Discuss Your Claim Before You Know the Full Extent of Your Injuries

One of the more common problems our car accident attorneys encounter is when clients have conversations with an adjuster about their injuries and their medical treatments before they know the full scope and severity of their injuries. Part of securing the full compensation you deserve from an insurance claim involves getting you accurately and completely diagnosed by medical experts.

We also need to understand how long it will take for you to recover and whether you can fully heal. All this takes time, which the insurance company doesn’t want to give you. After an accident, people with injuries will typically be transported to the ER for evaluation and treatment. ER staff are trained to make caring for patients in life-threatening situations their main priority.

If your injuries aren’t life-threatening, the ER staff will likely discharge you and refer you to your family physician or a relevant specialist. If you didn’t go to the hospital but were discharged by paramedics, you still should see your doctor for an evaluation before recording a statement for the insurance company.

Should You Try to Handle Your Case Without A Lawyer?

People often assume that they’ll be treated fairly by an insurance company, even if they don’t have a lawyer. Insurance companies do not want you to secure a lawyer because they know it will be harder to take advantage of you if you have legal representation, so they will often discourage you from hiring one or tell you that you don’t need to hire a lawyer.

They are banking on your unfamiliarity with the law and insurance policies. They know if they can catch you before you fully realize the extent of your injuries, they can probably get you to take a lower offer. Having an attorney negotiate for you ruins their plans, because your lawyer will have you get a comprehensive workup by a physician to quantify how badly you are hurt. In addition, your attorney will ensure you get an accurate estimate for any property damage you suffered.

Adjusters have been known to say things like “A lawyer will just take 35% of your money” as a means of dissuading an accident victim from hiring a lawyer who can fight for your rights. If you don’t have a lawyer, insurance companies don’t need to be fair. You are, in effect, bringing a knife to a gunfight, and they know this.

How Do You Find the Right Lawyer for Your Case?

Another common pitfall that can derail your car insurance case is hiring the wrong lawyer. This means a lawyer whose practice is not solely focused on personal injury law. Often, in the aftermath of a crash, friends and family will recommend attorneys who may be wonderful people and even skilled attorneys, but these professionals might not focus on personal injury law.

Without specific experience in insurance negotiations, settlements, and the statutes around car accidents, it’s a safe bet that they will not be as effective in representing you in these matters. You could end up with an even lower offer or none at all. A good personal injury attorney will take the time to listen to you, investigate your case, and do the legwork to make sure you’re not leaving any money on the table.

Not only will they push back hard for the settlement you need, but an experienced personal injury lawyer knows when it’s time to walk away from the table and prepare for court. They will put together a strong case for you and then handle all the paperwork to file a lawsuit. Often, the insurance company will come back with a better offer rather than face the time and expense of a trial.

Watch Out for “Settlement Mills”

Another situation to watch out for is “settlement mill” law firms. These firms are set up to run a case through their system as quickly as possible and get whatever settlement offer they can get without putting any work or expense into it. They’ll pressure you to settle and then move on to the next client. To these firms, you are just a number, and their way of doing business is in their best interests, not yours.

Insurance companies keep “baseball card” type stats on attorneys so that when they receive a claim associated with an attorney, they can look up things like:

  • How many cases have they handled
  • Their success rate
  • How many cases they’ve taken to trial vs. settled
  • Whether they have been disciplined by your state bar association
  • Other factors they can use in order to calculate how they can minimize their losses.

Insurance companies use these stats to judge how much of a risk a certain attorney will be to their case. So, make sure you do your homework when hiring your lawyer. Don’t rely on slogans and billboards.

Ask questions and do some research so that you can be confident you are in the right hands during a difficult time. If you need help, please feel free to call us at 828-333-5996 or use our online contact form to schedule your free consultation.

Attorney Lakota Denton

Attorney Lakota DentonLakota Denton has been practicing in his own firm since 2013, focusing solely on personal injury. He is a member of the American Association of Justice, the North Carolina Advocates for Justice, the North Carolina Bar association, the American Bar Association, the National Trial Lawyers, and was awarded Top 100 Trial Lawyers by the National Trial Lawyers, the 2014 Top 40 Lawyers under 40, and the Avvo clients choice award. [ Attorney Bio ]



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