Any person dealing with a personal injury claim will likely come into contact with an insurance company that represents the individual or business responsible for the incident. While the world of insurance is exceedingly complex, having an appreciation for some of the basic principles behind how insurers operate can help you ensure that you receive the maximum recovery possible for your incident.
Insurance companies go to great lengths to make us believe that they are not only friendly and willing to look out for us but that they also represent our interests and needs. Many insurance advertisements mention how quick and easy it is to file a claim and repair your vehicle following an accident.
While insurance companies lure us in with promises of savings and quick resolutions to claims, they leave out important information, such as how they really make money or what lengths they will go to in order to protect their own interests rather than those of their customers. Here are some of the things that insurance companies hope you will never learn.
1) Why an Insurance Company Is Delaying a Claim: Insurance Companies Profit More From Investments Than Premiums
After your insurance company collects your premium, it will put your money to work in order to make additional profit. Investments represent the main source of income for most insurance companies, and this is why they are unwilling to part with large sums of money when it comes time to pay a claim.
Understanding how insurance companies actually make the majority of their profit helps reveal their motives and why they operate the way that they do. Most consumers believe that their premiums are the main source of their insurance company’s income, but this couldn’t be farther from the truth.
Anyone who has ever filed a claim knows that an insurance company is going to try to get away with giving you the smallest payment possible, but understanding that insurance companies rely on their holdings for profit explains why they go to every effort possible to deny claims or settle for less money than claims are worth. They are not considering the value of the money they are offering you: They’re considering its potential on the financial markets and the interest lost by no longer having access to it.
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2) What to Do if an Insurance Company Is Stalling: Insurance Companies Are More Likely to Settle With Those Who Have Hired Lawyers
Great lengths are taken throughout the claims process to dissuade customers from seeking legal advice. Insurance adjusters may make veiled or direct threats to anyone who mentions that they are seeking legal advice, and they are trained to discourage people from retaining counsel because those who are represented by attorneys have recovered more compensation historically than those who choose not to seek representation. If you are being represented by an attorney, your insurance company may attempt to settle the matter quickly in order to cut their losses and avoid incurring additional damages.
3) An Insurance Company Won’t Settle a Claim Because it’s More Lucrative to Stall
If your insurance company is aware that you have a solid case and have a great chance of success if the case is taken to court, the adjuster will do whatever they can to delay payment. Most people would think that insurance companies would seek quick resolutions to claims that they recognize as legitimate, but knowing that your money is being used to gain interest offers a perfect explanation for what is often referred to as the “delay and deny” tactic. If your insurance company can delay payment of your settlement, it will be able to profit from your money on the financial markets for a longer period before paying the claim.
In some cases, insurance adjusters will outright deny claims in order to force customers to initiate legal action if they know that the length of the legal process will justify the delay. If your claim has been denied initially, you may still have a legal right to recover compensation: The insurance company is simply forcing you to go through the lengthy recovery process while it uses your money to recoup the damages it will be required to pay you at a later time.
4) Everything You Say or Do During Negotiations Is Recorded
Not only are claims adjusters trained to be excellent negotiators, but they also record everything that you say so that they can find holes or inconsistencies in your claim. If you contradict yourself at any point, you’ve provided the insurance company with a way to reduce its liability or to challenge your claim entirely. For this reason, it is important never to negotiate or communicate with an insurance company without previously speaking with an attorney.
5) Quick Claims Are Not in Your Best Interest
The only reason that an insurance company will offer you an easy and quick resolution is if it is in the company’s best interest to do so, not yours. If the company can silence you quickly and take a much smaller hit when you accept its initial offer, the company wins and is happy to pay the much smaller claim rather than risk being forced to pay a much larger amount.
It is also important to understand that due to the manner in which insurance companies profit, if your adjuster offers you a quick settlement, that means that the insurance company has determined that it will make more money by settling early than by using the “delay and deny” tactic.
6) The Legal Claims Made by Adjusters Are Erroneous and Misleading
Claims adjusters try to scare people by making the claim that if an offer is not accepted or if a customer seeks representation from an attorney, there will be adverse legal implications. Most of the legal claims made by insurance adjusters are smokescreens, and you should take their claims with a grain of salt. They are purposefully trying to scare you into accepting their offer or dissuade you from taking legal action, and if they are doing this, it is because they know they are in a bad position.
7) Settling a Personal Injury Out of Court Is in the Insurance Company’s Best Interest
You will initially be treated as if your adjuster and insurance company do not care whether you take your case to court or not. While insurance companies do make money by delaying claims, they also lose money when required to pay court costs and other legal fees. If they know that you have a solid case, they will opt to settle your case at some point before it is allowed to go to trial because it is far more advantageous for them to do this than to risk losing in court and having to incur additional costs.
Insurance companies spend a fortune on advertising designed to dupe us into viewing them as our friends, but when it comes time to file a claim, it is important to remember that your insurance company is in business for itself and not for you.
Are You Having Difficulties With A Car Insurance Company? Let Our Attorneys Handle The Claims Process For You.
The Chicago personal injury attorneys at Rosenfeld Injury Lawyers will be happy to answer any questions that you have about how best to deal with insurance companies, and we are qualified to represent your interests. You can be certain that your insurance company will hire attorneys to represent its own interests: Contact us today for a free consultation to learn more about how we can help you.
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Our office regularly represents individuals and families in serious injury and wrongful death matters. Many of our current and prior cases involve nursing home abuse, auto accidents, bicycle accidents, motorcycle accidents, semi-truck accidents, premises liability, and medical negligence.