Insurance companies can and will take advantage of injured accident victims before they hire a personal injury lawyer. In fact, for years, a major insurer tried to convince victims not to speak with an attorney before settling a claim. They advised victims that using an attorney would only mean less recovery for the victim due to the attorney’s fee, thus discouraging the victim from getting legal advice. This advice was given despite the Insurance Research Council study showing that personal injury victims who have an attorney averaged more than three and a half times more in recovery than injury victims without a lawyer.
While it is true that an attorney may not be needed in every small case, nobody should settle a case without understanding many things that the insurance adjuster will not tell you about your settlement. For instance, the adjuster might not tell you that after you accept a settlement check and release the defendant and its insurer, you may be required to turn around and pay most or all of it to your health insurer (read more about this in the later chapter on medical liens). The adjuster’s only goal is to obtain a release as cheaply as possible. What you find out later is of no concern to him.
You may encounter some of the following other tactics used by insurers to frustrate you into settling cheaply:
- Delaying a reasonable offer -The insurer knows that medical and pharmaceutical bills and co-pays can add up and cause financial strain. On top of that, you may not be working due to your injury. The longer this goes on, the more pressured you may feel to give in and settle cheaply. The insurer, of course, is fully aware of this.
- Befriending you and stringing you along – Some insurance adjusters are blatantly adversarial. However, the best ones will attempt to make you feel as though you have found a new friend. They will express personal concern for you and your family, and sorrow for all you are experiencing. A promise to pay your future medical bills may be made in order to stop you from hiring an attorney while they request a recorded statement and ask you to sign medical authorization forms and provide them with a slew of other personal information.
- Requesting unnecessary information – As its adjuster befriends you, lulling you into not seeking legal advice, your insurance company may be busy gathering full medical charts from every physician whose name you have provided them. This will include past physicians whose treatment had nothing to do with the injury in question. If you sign an employment authorization form, the insurer may request your entire employment file from every place you have ever worked. It will search these medical and employment records in detail to look for prior injuries and other reasons to argue that you were not truly hurt in the accident in question.If you gave the insurer your Social Security number and date of birth, it will use this information to look for prior claims for unemployment, divorce proceedings, criminal records or other personal information. Meanwhile, it may be spying on you and conducting video surveillance to see if your description of your injury and pain to your physician squares with your activities. The insurance company will also look for you on Youtube, Facebook, Myspace and other social networking sites. They will “Google” you as well. The insurer hopes that as you claim great pain whenever stooping or bending from a truck accident or car accident, they find graphic evidence to contradict you.As it does all this, without your knowledge, the adjuster stays friendly, and the insurer earns interest on the money it isn’t paying you. As the adjuster makes repeated requests for documentation having little or no bearing on the amount to be offered in settlement, the unrepresented accident victim may become frustrated and more willing to accept a lower settlement offer.
- Disputing valid medical treatment – Adjusters, who have never gone to medical school, will often argue that your treating physician is over treating you. They may even argue that their computers say you should be without need of further medical treatment when your treating physician is saying otherwise.
- “Nickel and Dime” the medical charges – Sometimes the insurer will arbitrarily agree to “accept as valid” perhaps 80 or 90% of your past medical charges. Shaving just a small percentage off each of the huge number of claims made each year against large insurers can substantially increase their profits while short-changing legitimate injury clients.
- Misrepresenting insurance policy benefits – Sometimes the insurer will refuse to tell you the amount of existing insurance coverage available to you. Or worse, I have seen instances where the insurer actually misrepresents the amount of available coverage. This tactic may be used to make you more willing to take a smaller than reasonable settlement amount.
- Making false promises – I’ve seen examples of insurance adjusters promising accident victims that they will continue to pay medical bills every month until the victims fully recover. But after several months, the adjusters stopped paying without telling the victims. The victims did not learn of the insurance company’s decision to stop paying until they had incurred many additional months of unpaid medical bills.
These are examples of tactics that insurance companies may employ to wear down injured accident victims in order to pay as little as possible. The strongest motivation for the insurance company to reasonably settle is the belief that the injured accident victim is fully prepared for trial with a qualified and experienced personal injury attorney.