How Do Insurance Companies Handle My Car Accident Injury Claim?

When you’re trying to get payments from your insurance company for an injury, you have to be proactive and know how an insurance company works.  For example, if you get into a car accident, the insurance company for the driver who caused the accident or is at fault will be the ones you’ll try to get paid from and settle your claim.

So how do insurance adjusters work and what is their motivation?

They are assigned to a case to investigate facts and determine how much each claim is worth. They work for the insurance company, not for you as the insured or as the victim. They are interested in keeping the payouts as low as possible or not at all so the insurance company doesn’t lose money.

Insurance adjusters want to pay out as little as possible and avoid a lawsuit. If a case does not settle with the insurance company, the individual who was injured can take it to the courts.   This is risky for an insurance company, as the damage award can end up being very high depending on the judge and jury. Legal fees and other costs associated with a trial can also become expensive for an insurer.

The insurance adjuster, wants to get the insured to accept the lowest settlement offer possible, without having to go to court.  Most adjusters decide on a number that they are willing to pay out and then will make an offer and then will make an offer to you that is lower than the maximum they came up with.  This can sometimes be as much as 25 to 50 percent lower. This is because they want some room for movement in case of settlement talks.

How an Insurance Adjuster Decides on an Offer

Adjusters are usually looking at:

  • Actual expenses (medical bills and costs) that have been incurred and that will be necessary in the future
  • Actual losses in the form of lost income or lost wages
  • Pain and suffering damages
  • Emotional distress damages

Pain and Suffering Calculations

Because of the complexities associated with calculating pain and suffering, adjusters have a system. Here are two examples:

1. The injured victim is paid a set amount for each day of suffering 

2. Insurance company multiplies medical bills and lost income times a set number. The number that is often used for a pain multiplier will usually vary between 1.5 and 5, but each insurance company may have a slightly different system here.

Other Considerations

Insurance adjusters also consider two other key factors: policy limits and the strength of the plaintiff’s case.

The policy limits.

An insurance company is never going to pay more than the maximum amount of the insurance policy. For example, if a driver bought $50,000 in liability insurance, the maximum the insurance company will ever pay out is $50,000 total in legal fees and damages.

Effectively Dealing With an Insurance Company

Once you have an understanding of how insurance companies work and of what the motivation of the insurance adjuster is, you can use that information to your advantage to negotiate the best settlement possible. There are a few key things in particular that you should do:

Consider hiring a lawyer.

This lets the insurance company know immediately that you do take your rights seriously and that you will be filing a lawsuit if you aren’t given a fair settlement. Your lawyer also knows how to determine what your specific case should settle for and can use her expert legal knowledge and negotiation skills to get you the best outcome.

Make sure you have track and keep great evidence:

Photographs, journals, extensive medical records, and records of all bills paid and work lost are all essential.

Consider sending a demand letter

This is essentially a letter where you state what you will accept in order to settle the case. If you send this letter, then the negotiations with the insurance adjuster can begin at the number that you believe is fair, rather than the number that the insurance adjuster decides is right.

Remember, the insurance adjuster is trying to save money for the insurance carrier.  They will try to keep costs low.  You need to be paid what is fair under your policy.

References: http://www.alllaw.com/articles/nolo/personal-injury/insurance-adjuster-handles-claim.html