Clients sometimes ask us why insurance companies make lowball settlement offers following an auto accident. The answer is simple: because they want to pay you as little as possible for your injury. They have nothing to lose by offering you less than what you deserve. And if you say yes to the amount an insurance company puts on the table, they escape their liability for a fraction of what they owe.
If you’ve suffered losses related to a personal injury, don’t be surprised if an insurance company tries to lowball your compensation. But don’t say yes to their offer either. Instead, put your claim in the hands of a skilled personal injury lawyer who can negotiate top-dollar settlements from insurance companies on your behalf.
Insurance companies have a duty to provide coverage for customers. Personal injury insurers charge premiums to policyholders and pay compensation to people who suffer covered losses. So long as an insurance company earns more on premiums than it pays in claims, it makes money.
But despite its simplicity, the personal injury insurance business is also constantly in tension with many of the people it serves. Insurance companies market their products to customers as a dependable way to protect against unexpected costs. In their TV ads, they make it seem like they’ll always pay claims quickly and in full.
In reality, however, insurers constantly look for ways not to pay money to injured people or to pay as little as possible. After all, the fewer claims they pay, the more money they keep, the higher their profits, the larger their executives’ bonuses, and the happier their shareholders.
How Personal Injury Claim Adjustment Works
People obtain money from insurance companies by filing a claim, which is simply a request for payment under an insurance policy.
For every claim insurance companies receive from a policyholder (a first party claim) or someone else covered under a policy they issued (a third party claim), they must confirm the validity of the claim and the amount requested. The insurance industry refers to this process as claims adjustment and to the person who performs it for an insurance company as a claims adjuster.
Adjusters assigned to review a claim must answer three basic questions:
- Does the policy cover the claim? An insurance company will only pay for the type of loss that it has agreed to cover under the terms of an insurance policy it sold.
- Are we liable? An insurance company will only pay if the claimed loss actually happened and otherwise qualifies for payment under the terms of the policy.
- How much must we pay? An insurance company will only pay the verified amount of the claimant’s loss up to the maximum coverage limit of the policy.
In seeking answers to these questions, adjusters have a built-in bias. Their job is to protect the insurance company’s bottom line. And that means they’re always looking for reasons to invalidate a claim or reduce its value so that their employer can justify paying the claimant as little as possible or nothing at all.
A core component of an adjuster’s job is to gather information about the facts underlying a claim. Eventually, they’ll reach a decision to either:
- Approve the claim and pay it in full
- Deny the claim and refuse to pay anything
- Dispute the claim in part but offer to pay less than the full amount as a settlement
Getting a lowball offer
Getting a lowball settlement offer from an insurance company can feel frustrating. But it’s not necessarily a bad thing. The fact that an insurer offered any amount—even one that seems insultingly low—could be a signal that you have a strong claim.
Insurance companies only make settlement offers when they believe it’s more likely than not that they have at least some liability for your loss. But the amount they initially offer rarely (if ever) reflects the full amount they think they might owe.
Contact an experienced personal injury attorney immediately when you get a lowball offer from an insurance company. Do not say yes to the offer and do not sign anything an insurance company sends you. And never make the costly mistake of trying to negotiate with an insurance adjuster on your own. Adjusters are professionals who will take advantage of you if you don’t have an experienced, insurance-savvy lawyer negotiating on your behalf.
Don’t fall for lowball offer tactics. Contact a lawyer instead. In virtually all cases, a skilled attorney from Bashore Green Law Group can get you far more than what the insurer initially offers. Call 248-487-1887 for your complimentary phone consultation.
