“Like a good neighbor, State Farm is there.”
“You’re in Good Hands with Allstate.”
“Farmers. Gets you back where you belong.”
As a victim of a collision, the insurance company is not your friend
These slogans engender a feeling that the insurance company is there to help you. In the normal personal injury claim, you will be making a claim against the responsible party’s insurance company. If they don’t have insurance, your case just got more difficult. You then might have to deal with your insurance company seeking uninsured motorist benefits from your own policy, assuming you have that coverage. But even if it is your insurance company, they are not your friend. They have a job to do. And that job usually does not involve your best interest. It is an adversarial relationship. The goal of an insurance company is to collect policy premiums and pay out as little as possible in claims. That is how they make their profit. As one insurance company CEO explained, the goal of his company is to provide profit to shareholders.
There is nothing wrong with making a profit. Raised in my grandparent’s cleaners and laundry business, I watched them struggle to make it in this world as small business owners. While they earned a decent living, they never did it at the expense of a customer or employee. They treated everyone fairly and with dignity. This country was founded on these same principles of hard work and the ability to get ahead if you worked hard. Profits are good. Companies need to make profits, or they go out of business. However, when the quest for profits is at the expense of people, then problems begin. In the case of some insurance companies, they seek to ensure profits by denying or delaying the payment of legitimate claims of individuals.
Delay, Deny and Defend
The insurance industry is skilled at what some call the three Ds—delay, deny, and defend. DELAY paying your claim as long as possible, DENY you were hurt or their insured is liable for your injuries, and DEFEND against any claim you make. The mouthpiece for such behavior starts with the insurance adjuster.
Insurance Adjusters
Rest assured the insurance adjuster who just called is not your friend, is really not there to help you, and is not just trying to gather some information to help resolve the case, despite all assurances otherwise. That adjuster’s single goal is to pay as little as possible to you no matter how badly you have been injured. And also rest assured, everything you say to the insurance company can and will be used against you.
Insurance adjusters are trained professionals. They are trained in taking statements, trained to ask questions in a particular way to get the information they want, and trained to start building a case so their insured does not have to pay any money or the least amount possible.
Adjusters are also trained in negotiations. They are skilled in “lowballing” your claim. That is, undervaluing your claim. Adjusters are trained to negotiate for less than your claim is worth. Their bosses give them a range of authority to negotiate your claim and they will always start at the low-end of this “authority” level in hopes you will settle for the least amount of money.
Adjusters would much rather deal with you than an attorney. Why? Because it gives them the upper hand. In addition to their training, they have lawyers at their disposal to assist them in defending your claim. They hope they can settle your case before you contact an attorney. The reason is simple—to save money. The deck is stacked against you. A study by the Insurance Research Council revealed that injured victims receive an average of 40 percent more money just by consulting a lawyer to learn their rights. Further, injured victims receive an average of 3 ½ times more money before legal fees when they hire a lawyer to defend their rights.
Swoop and Settle
The "swoop and settle" scheme is prevalent in Texas. In this situation, the adjuster calls the injured person right after a collision and offers that person a small amount of money to settle their claim. They will get the person to enter into a verbal release on a recorded telephone call. The problem is that in the days following a collision, most people do not have an understanding of the extent of their injuries. And then they fall for the swoop and settle technique and find out later that they are injured much worse and have no ability to recover for their injuries as they have settled their case for a small amount.
When involved in a collision, be wary of settling your case immediately following the wreck. If injured, see a doctor and determine the extent of your injuries. And before you agree to any settlement, consult an experienced personal injury attorney. Don’t be a victim of a collision and then a victim of these insurance tactics.