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 (vehicle) 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 (some you can probably guess), but at the end of the day, injured persons with legitimate claims for compensation scratch their head at how and why the insurance company can get away with offering so little when they are clearly on the hook.
Insurance Companies Are in Business to Make Money
It wouldn’t be unreasonable to think that an insurance company’s job is to protect its clients, by negotiating, settling and paying reasonable claims against their customers. Insurance agencies like to project the image that “you’re in good hands”, or “on your side”, which sounds wonderful as a marketing strategy, but the unfortunate truth is that as a for-profit business, their primary responsibility is to their shareholders.
An insurance company exists and thrives as a business by decreasing the amount of money they pay out on any given claim. This supersedes questions about what is fair, what is reasonable, and what is the right thing to do. At the end of the day, an insurance adjuster is paid to minimize the amount of losses the insurance company will potentially stand to pay out.
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” (i.e. 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 manipulating your recorded statements, questioning the validity and severity of your injuries, and flat out trying to wear you down so you’ll quietly go away. Think of it this way: If 20 frustrating and fruitless phone calls from you can save them $20,000 (as a crude example) they will easily consider this a win.
The Small Case Conundrum
If you have been injured in an accident and sustained minor injuries, 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.
An insurance company knows that the costs associated with taking your case to trial means that a case has to be worth a certain amount for a lawyer to see it as economically viable. 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. In these types of situations, the injured party and attorney loses 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 on the case. As they say, a bird in the hand is worth two in the bush.
Saying The Wrong Thing to an Adjuster
After an accident involving another driver, you can expect to be contacted by an insurance adjuster (yours and the at fault drivers). 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, in fact, they’re hoping that IF you did receive any serious injuries you may still be in shock and unaware of the extent of your injuries, or still have adrenaline pumping through your veins and literally are feeling no pain. In these cases, clients will unknowingly damage their case by simply responding honestly to the adjuster’s questions. If you tell them that you’re OK, 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 fact that your symptoms began 24-48 hours later (as they very often do for neck and back injuries) will be ignored if the adjuster chooses to play hardball and tell you that they have you on record stating that you’re “OK” 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.
Discussing Your Claim Before You Know the Full Extent Of Your Injuries
One of the problems I encounter involves clients having conversations with an adjuster about their injuries and their medical treatments before they know the full scope and severity of their injuries.
After an accident, people with injuries will typically be transported to the ER for evaluation and treatment. Although the Emergency Dept. staff are trained and able to help with common injuries, their main priority is to care for patients in life-threatening situations. If someone’s injury is not life-threatening, ER staff will likely discharge the patient and refer them to their family physician or a relevant specialist for follow up care.
Until there has been a more comprehensive workup by a physician using all the data available, one just cannot know the extent of their injuries, and how those injuries will affect them long term. If you spoke with an adjuster about the nature and severity of your injuries, before knowing the full magnitude of your injuries, this could explain why their offer seems low.
Handling 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, and so they will often discourage you from hiring one, or tell you that you don’t need to hire a lawyer.
Adjusters have been known to say things like “A lawyer will just take 35% of your money” as a means to dissuade an accident victim from hiring a lawyer who can fight for your rights. Without a lawyer, insurance companies don’t need to be fair. You are, in effect, bringing a knife to a gunfight, and they know this.
Not Hiring the Right Lawyer
Another common pitfall is hiring the wrong lawyer. By “wrong lawyer” I just mean, 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 great lawyers, but if they’re not focused on the particular landscape of personal injury law, it’s a safe bet that they will not be as effective in representing you in these matters, resulting in a lower or nonexistent settlement offer. The other thing to watch out for are “settlement mill” law firms. These firms are set up to run a case through their system as quick as possible, get whatever settlement offer they can get without putting any work or expense into it, pressure you to settle and then move on to the next client. To these firms, you are just a number, and it’s a very safe bet that their way of doing business is in their best interest, not yours. 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. When needed, a good personal injury lawyer will file a lawsuit or take your case to trial in order to get a settlement offer or jury verdict that you deserve.
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, how many cases they’ve taken to trial vs. settled, whether they have been disciplined by your state bar association, and other factors they can use in order to calculate how they can minimize their losses. If you hire an attorney with no trial experience and said the attorney is threatening the adjuster to file a lawsuit and “let a jury decide”, the adjuster will know at once what the likelihood and risk of that happening will be. So be sure to hire a lawyer who focuses their practice specifically on personal injury, and has a track record in court and doesn’t settle everything that comes across their desk.
Make sure you do your homework when hiring your lawyer. Read up on them on sites like avvo.com and justia.com which are designed to educate clients to help them make informed decisions. Don’t rely on slogans and billboards, ask questions and do some research so that you can be confident that you are in the right hands during a difficult time. If you need help, please feel free to call us for a free consultation.