I worked for a number of years as in-house counsel for a large national insurance company. My job was to work closely with the insurance company adjustors in defending lawsuits brought arising out of bodily injury claims. These claims included vehicle accidents, injury crashes, dog attacks, slip and falls, premises accidents and other insurance related incidents. This experience provided me a unique understanding and invaluable insight into how the insurance company handles claims and what they do not want you to know about how your injury and damage claim is evaluated, processed, assessed and valued for purposes of settlement.
INSIGHT #1: THE INSURANCE ADJUSTOR IS NOT LOOKING OUT FOR YOUR BEST INTEREST
The less the insurance company has to pay out on claims, the more profitable it is to their bottom line. Reserves or projections as to case values are set on each claim and if the adjustor can settle the claim under that amount, it works to his or her advantage when it comes time for review, bonus, raise or promotion. The insurance adjustor’s loyalties lie with the insurance company and not with the injured. Even if the claim is with your own insurance company and even if you are a longtime customer, don’t believe that they will put your interests above that of the company.
INSIGHT #2: THE INSURANCE ADJUSTOR WILL TAKE ADVANTAGE OF INJURED CLAIMANTS NOT REPRESENTED BY AN ATTORNEY
Studies like the one by the Insurance Research Council show that insurance companies pay more on claims where there is attorney representation. Many insurance companies have units of adjustors specially trained to handle claims brought by those not represented by counsel. Their goal is to settle your claim for as little as possible.
The insurance adjustor often times may lull you into a false sense of security in leading or allowing you to believe that they will make sure that you get the needed medical care and be properly compensated. You may be encouraged not to hire an attorney who will take a portion of your settlement. They will ask you to give a recorded statement wherein you may unknowingly compromise your claim by getting you talking and giving a narrative wherein you may not realize that you have made statements like, “I wasn’t really paying attention” or “I really wasn’t feeling much pain” or “the last time I had that injury” or “my back always hurts”. They won’t tell you how claims are evaluated and the importance of getting prompt, proper and consistent medical care and the need to document your economic damages and loss.
There are adjustors that take “strong arm” tactics with Claimants. They make “take it or leave it” offers and misrepresent what rights to recovery are available. For instance, the adjustor may take the position that a pre-existing injury does not have to be compensated. In fact, states such as California have case law that not only allows for compensation for re-injury or aggravation of injury, but calls for compensation where the injury would not have been suffered, but for the pre-existing condition.
Insurance adjustors are experienced and sophisticated negotiators. They handle 100s of claims at a time and are well trained in the law and in the psychology of negotiation. They may lead you to believe that they have no problem in taking the case to trial in order to get you to settle for less, but a properly brought claim will typically yield a reasonable settlement. Remember, the insurance company is concerned about its bottom line, and would like to avoid the cost of trial, though there are times the insurance company will pay more to fight the claim, then it would cost to settle, if it wants to make a point or set an example.
INSIGHT NO. 3: THE INSURANCE COMPANY DOESN’T PAY YOUR BILLS AS YOU INCUR THEM AND DOESN’T ADVANCE SUMS FOR SUCH THING AS NEEDED MEDICAL CARE.
Many are under the mistaken belief that the insurance company will arrange for medical care when you are hurt or injured or will immediately pay the bill or advance costs for needed treatment. The insurance company for the other party responsible for your injuries has no fiduciary duty to you. Any offers to pay your expenses do not typically come until after you have completed treatment and are ready to settle your entire claim. Personal injury claims are typically final with no provisions for ongoing treatment unless that projected sum was established as part of the settlement. In cases where you carry medical payment benefit coverage under your own policy, the insurance company will consider payment of the reasonable value of this treatment after it is received and billed and will many times conduct a medical review and reduce the payment and often has provisions in the policy entitling the insurance company to be reimbursed this payment should you collect from the other party’s insurance company. There is also limitations as to how much medical payment benefits will be paid based on the amount of extra premium coverage you have paid. Medical payment benefit coverage does not take into account or pay for pain and suffering.
INSIGHT NO. 4: MORE AND MORE INSURANCE COMPANIES ARE USING COMPUTER PROGRAMS TO EVALUATE CLAIMS AND DIAGNOSTIC CODES AND TERMINOLOGY ARE DETERMINING FACTORS IN THE EVALUATION OF YOUR CLAIM.
Many insurance adjustors evaluate claims utilizing specially designed computer programs that place values on diagnostic codes, medical diagnosis, prognosis, and other medical terminology. If your treating doctors are unfamiliar with this program and fail to provide medical reports containing this data, your claim will likely be greatly diminished in value. Proper medical treatment and documentation is a must. Settlement demand letters also need to contain the data which illicit greater values from the program.
INSIGHT NO. 5: CLAIMS OF ECONOMIC DAMAGES SUCH AS LOSS OF EARNINGS, LOSS OF EARNINGS CAPACITY AND FUTURE LOSS OF EARNINGS INCREASE THE VALUE OF YOUR CLAIM.
Losing time from work, loss of wages or earnings, using sick days or using vacation days as a result of your injuries are damages that you can be compensated for. Such claims need to be properly documented. If your injury is serious enough that it affects your ability to perform your job in the future, experts may need to be retained to evaluate and substantiate the loss.
INSIGHT NO. 6: INSURANCE COMPANIES DO NOT PUBLICIZE THAT THE VALUE OF THE CLAIM INCREASES WITH EVIDENCE OF HOW THE INJURIES SUFFERED ADVERSELY EFFECT DAY TO DAY LIVING.
Medical reports and demand letters reflecting how one’s injuries detrimentally effect the injured person’s day to day living, ability to perform such things as household chores, exercising, and perform other routines is a compensable part of the claim and increase its value.
INSIGHT NO. 7: ACT QUICKLY TO PRESERVE YOUR EVIDENCE AND MAKE YOUR CLAIM
Immediate steps should be taken to get the needed contact information of the responsible party and their insurance company. Photographs of the accident scene, and property damage should be taken. Witness information and witness statement should be obtained as soon as possible. Evidence should be gathered, documented and copied. If you send evidence to the insurance company, keep the originals and send copies. Call the police to the accident scene and insist that they make a report. Do not unintentionally sabotage your claim. Take steps to maximize your claim. Following your accident, don’t wait to contact a personal injury attorney, such as Frederick S. Schwartz, for a free evaluation and consultation before filing a claim and seriously consider retaining an attorney to assist you in making the claim. Do not give a statement to the insurance company until you have at least spoken with an attorney and then if you retain the attorney, do not give a statement until your attorney has determined whether you should and is present when you give the statement. The more time that passes, the more memories fade, important factors may be forgotten and the more likely witnesses will become less