Doing the right thing is not how insurance companies make money. That’s why adjusters try to reduce your settlement.
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You can expect problems in trying to settle a personal injury claim on your own because insurance companies make money from collecting premiums, not by paying claims.
That’s why they can produce all those funny TV commercials and build gigantic skyscrapers for their headquarters to attract you to purchase their policies.
Why Do Adjusters Have To Reduce Your Settlement?
Giant insurance companies are all too happy to take advantage of you when you’re in trouble. You pay insurance premiums for years, trusting in the promise that you, or someone you accidentally harm, will be taken care of when something goes wrong. That is how insurance is supposed to work.
Oftentimes, Despite the presence and proof of significant life-changing injuries, insurance companies will still go into battle with their regular crew of doctors, adjusters, and attorneys. Some of the insurance-hired doctors literally make over a million dollars a year just performing court-ordered or compulsory medical examinations. These hired doctors are not treating physicians but professional testifiers who are just predictable, well-paid witnesses with medical backgrounds.
Insurers turn a profit by collecting more in premiums than they pay out in settlements. The less they pay out, the more they get to keep and the greater their earnings. And you can bet they’ll do everything they can to reduce your settlement and avoid paying a claim when someone has been hurt by their policyholder in an accident.
1. Using an Attorney
The claims representative may use an attorney to write an opinion letter stating that the claim is worth very little. This may happen when the claims representative has not submitted all the known facts to the attorney for the opinion letter to reduce your settlement. The adjuster can then share this letter with you to encourage you to accept the adjuster’s offer.
2. It’s Your Fault
The claims representative may hold you responsible for consequential damages, stating that you did not protect your property after the accident. If your damaged vehicle left at the scene of the accident was vandalized or personal property was stolen from it after you left the scene (perhaps by ambulance), the claims representative will argue that this is an independent act and not related to the accident.
3. Slow Mitigation Efforts
The claims representative may hold you responsible for not quickly mitigating your damages to reduce your settlement. An example would be if you did not seek medical attention fast enough, in the opinion of the claims representative. Hence, you aggravated your own medical problems, and the insurance company will not pay.
4. Keeping Premiums Down
The claims representative might explain to you that the settlement of the claim must be kept down in order to keep premiums from going up.
5. Tax Benefits
Another technique is for the claims representative to tell you that your claim is being reduced since the general damages that are being paid are tax free. The claims representative is taking credit for that percentage of taxes that you usually pay when earning money.
6. Attorney Leverage
If the claims representative can determine that you dislike using attorneys, then he can offer an unreasonably low settlement. The adjuster knows that you will have no other alternative but to accept his low offer.
7. False Settlement Authority
A claims representative may go to his claims supervisor and secure a memo that states that only X dollars will be paid to you, all the while knowing the case to be worth more.
8. Excessive Depreciation
The use of excessive depreciation tables or depreciation tables which do not have any reasonable relationship to your case is a tactic employed by some claims representatives to reduce your settlement.
A claims representative may refuse to volunteer damages owed to you. He may not offer to pay for your rental vehicle while your vehicle is under repair. Rather, the claims representative will tell you to get a friend to drive you to work.
Likewise, the claims representative may not offer to pay lost wages you have incurred. Rather, the claims representative will explain that you can use sick leave or vacation time.
The claims representative may also not offer to pay your medical bills. He may tell you to use your own auto medical pay or your employer’s accident and health policy.
Wages you lost due to having to take time off from work to secure estimates of damage for the vehicle, delivering the vehicle to a body shop for repairs, and picking up the vehicle after repairs have been completed. These are proximate cause damages and should be considered by an insur- ance company acting in good faith.
10. Professional Time Defense
If the claims representative learns that you are a doctor, dentist, lawyer, accountant, or small-business person, he may surmise that these categories of people probably can’t afford the time to go to trial and reduce your settlement because most of the people in the above categories cannot afford to shut down their businesses for enough time to litigate damages. Their time is too valuable, and therefore, they may accept a lesser sum of money for their claim.
11. Hardship Defense
A claims representative may want to determine whether you have been or are unemployed. Usually, a lower settlement amount will be accepted if there is an immediate need for money.
12. Internal Policy
The claims representative informs you that the insurance company’s internal policy is that certain damages will not be considered. The following examples highlight some of the damages that the claims representative may insist are not covered.
Choosing The Right Attorney To Fight For You
Winning the battle with big insurance companies requires choosing the right attorney. There are a lot of attorneys who claim to handle personal injury cases. But how they approach cases will make all the difference in the world to your outcome.
Often, the big firms with massive ad budgets simply do not have or take the time to thoroughly prepare your case (or any case) or fight for the maximum compensation you deserve. “Doing it right” requires time, patience, thought, top-notch trial preparation skills, and meticulous preparation. These are luxuries huge law firms cannot afford to employ.
They must churn out a huge number of cases to pay for their massive marketing campaign, even if it means convincing their clients to settle for less than they should. You and your case may become just another number in a sea of faceless claims. They might get you a little more than you could on your own, but odds are you will still get a lot less than you deserve.
I got many calls from people who were rejected by their “settlement mill” law firm when they would not accept the insurer’s low-ball offer.
That’s not how I approach a personal injury claim. If I take on a case, it’s because I believe in the victim and their claim. I am willing to take their case to trial, and I prepare it from day one as if we are going to do exactly that. Insurers know the attorneys that hate to go to trial, and they offer their clients a lot less for their claims.
Get a Free Case Consultation
Before you negotiate or sign anything, learn your rights and how to protect yourself and your family. A personal injury lawyer can talk to you about your legal options, how to avoid common mistakes, and how to maximize your claim.