If so, then you are probably dealing with insurance companies right now. If you’re like most people, you are also clueless about whether or not they are offering you a fair settlement.
That’s a huge problem because insurance companies are not on your side.
Insurance companies are for-profit businesses that want to pay you as little as possible and get you to sign away your rights to future compensation. They have lots of experience and entire teams dedicated to this goal.
This is why insurance claims in personal injury lawsuits can be so frustrating and why you should know what you’re doing.
In this article you’ll learn:
- Why Insurance Companies Push for a Quick Settlement
- What’s the Real Value of Your Personal Injury Claim?
- How Having an Attorney Changes Everything
- The Insurance Company Tactics You Should Watch Out For
Why Insurance Companies Push for a Quick Settlement
Insurance adjusters often contact you within days (sometimes even hours) of an accident.
This is a strategy, not an act of kindness.
Insurance companies know that you are in pain and worried. And they use this to their advantage. Their main goal when you file a personal injury claim is to pay you as little as possible.
How do they do this? By offering quick settlements.
Think about it: right after an accident, you don’t know how serious your injuries are. You haven’t received all your medical bills. You aren’t aware of any long-term complications or losses of earning capacity.
The insurance company knows all this, though.
They want to get you to accept a lowball offer before you have a chance to understand the true value of your claim. Many experienced injury lawyers in Philadelphia see this every single day in their injury law practice.
They’re banking on you to:
- Need the money to pay for immediate expenses and losses of earning capacity
- Lack knowledge of your legal rights
- Not having spoken to an attorney yet
- Sign away your rights in exchange for some quick cash
And it works. Many accident victims accept these early settlement offers. Then they come back to their attorneys months later with regret when new injuries or medical complications arise.
What’s the Real Value of Your Personal Injury Claim?
Here’s something you may not know:
Approximately 95% of all cases end in a settlement before even going to trial. In other words, most people never even see a courtroom in their personal injury lawsuit.
But settling doesn’t mean you accept whatever the insurance company offers you first.
The true value of your claim is based on a number of factors, such as:
- Medical expenses (current and future)
- Lost wages and loss of earning capacity
- Pain and suffering
- Property damage
- Permanent disability or disfigurement
Insurance adjusters have formulas they use to calculate these damages. They will tally up your economic losses (think medical bills and lost income) and multiply by 1.5x – 5x depending on how severe your injuries are.
But here’s the rub…
Their first offer will be well below what your claim is worth. They are lowballing you to start the negotiation process from the bottom.
Most people take it.
How Having an Attorney Changes Everything
If you’re a betting man, put money on this fact:
Claimants who have attorneys receive almost three times higher payouts compared to those who don’t have representation. And 70% who held out for a better settlement offer received $30,700 more on average than the insurance company’s first offer.
Yup, a difference that big.
Why does having an attorney matter so much?
Because good personal injury attorneys know the insurance company’s tricks. They know the true value of your claim. And they are not afraid to take the case all the way to trial if the settlement offer is too low.
Insurance companies know that too. Once you have legal representation, they take your claim seriously. They know they can’t lowball you and expect you to accept it. And they know that going to trial will cost them much more money than offering a fair settlement.
It changes the negotiation dynamics completely.
The Insurance Company Tactics You Should Watch Out For
Now let me show you exactly what insurance companies do to minimize their payouts…
Fast Settlement Push
Insurance adjusters will contact you shortly after your accident. They will offer you a settlement that seems pretty good and pressure you to accept it as soon as possible.
Why? Because when you sign that release form, you are giving up all of your rights to seek additional compensation. Even if your injuries turn out to be worse than you first thought.
Recorded Statement Trap
They will request that you give them a recorded statement about the accident. Sounds harmless, doesn’t it?
Not so much.
These statements are designed to get you to say something that will be used against you later. They will twist your words and try to minimize their own liability or lower the value of your settlement.
Downplaying Your Injuries
Insurance adjusters will often try to convince you that your injuries are not that serious. They may try to talk you out of certain medical treatments. Or they may tell you that you will recover faster than your doctors think.
Don’t fall for it.
They are trying to make you think that your claim is worth less than it really is.
The Waiting Game
In some cases, insurance companies do the opposite. They will slow-walk your claim. Ask for endless amounts of documentation. And take months to get back to you with a decision.
This strategy works because it preys on people’s desperation. When you’re up to your eyeballs in medical bills and you can’t work, even a low settlement offer can seem appealing.
What You Should Do Instead
So what can you do to protect yourself against these tactics?
First: Don’t accept the first offer. It is almost never fair.
Second: Don’t give recorded statements without talking to legal counsel first. Remember, you have no obligation to do this and it can seriously harm your case.
Third:Â Get proper medical treatment and follow your doctors’ orders. This is not the time to skimp on your medical care. Your health comes first and good medical documentation strengthens your claim.
Fourth: Keep detailed records of everything. Hold on to all medical bills, receipts, pay stubs, and any communication with the insurance company.
Fifth:Â Consult with a personal injury attorney before making any decisions. Most offer free consultations and work on contingency (you don’t pay unless they win your case).
Insurance companies love confusing and frustrating people so that they will accept a lower settlement.
Timeline of Settlement: What to Expect
Exactly how long does the insurance claims process take?
It can vary from case to case. Simple cases with relatively minor injuries may settle within a few months. Complex cases with severe injuries can take a year or more.
The process usually involves the following steps:
- Initial claim filing
- Investigation and evidence gathering
- Medical treatment and recovery
- Demand letter and negotiation
- Settlement or trial
Don’t rush this process. It may be tempting to accept a quick settlement when bills start piling up. But trust me, it’s almost always better to wait until you have reached maximum medical improvement.
This is when your doctors can predict your long-term prognosis and future medical needs with reasonable accuracy. Only then can you truly understand what your claim is worth.
Wrapping This Up
Insurance claims in personal injury cases are tough. Insurance companies have teams of experts whose sole job is to pay you as little as possible.
They use tried-and-true tactics to:
- Get you to settle quickly
- Accept lowball offers
- Sign away your rights
Your best defense is knowledge and legal representation. By understanding these tactics, you put yourself in a much better position. And having an experienced personal injury attorney levels the playing field.
Don’t let insurance companies take advantage of you when you are at your most vulnerable. You got hurt, in pain, and deserve fair compensation for what you have been through.
Take your time, know your rights, and make informed decisions about your case.