A synopsis of the problems your insurer or your opponent’s insurer can cause you. The insurance companies have taken a new approach to personal injury claims: “We don’t care”….
The insurance companies have taken a new approach to personal injury claims: “We don’t care” seems to be the new war cry that echoes so clearly in today’s personal injury landscape. Injured people who try to “do it themselves” in order to avoid large fees for representation by an attorney are finding themselves face to face with Goliath companies that really just don’t care whether they win or lose, as long as they can hold on to their precious cash as long as possible. The average time it takes to settle a claim, even when there is no issue as to fault, has doubled in the past 5 years.
Even worse, the insurance companies know that the vast majority of people who bring claims against them for injuries received at the hands of negligent drivers lack the resources and the willpower to fight them on their own turf. Even when a lawyer is involved insurers have decided that, in the vast majority of cases, it is in their best interest to delay payment as long as possible.
Why have the insurance companies adopted this strong emphasis on delay? The answer has two components. To begin with there is absolutely nothing in the law that requires a third-party insurance company to act in good faith in dealing with claims for damages caused by their Clients. But for the most part, its about the time value of money. Insurance companies have realized that the longer they hold on to the millions of dollars they eventually pay out to injured people, the more interest that money is going to earn over time.
More importantly, delaying a payout for 6 months or more gives them the power of cash-on-hand. Controlling cash payouts amounts to the insurance company using someone else’s cash, interest free, for a much longer period of time than any lender would ever give. Insurance companies do not make their profits through collecting premiums — the margins of profit on sales of insurance are razor-thin. Insurance companies make money through investing the money they keep on hand. They use the money they will ultimately pay out to invest in stocks, bonds and mutual funds, all managed by their own institutional investment specialists. They have realized that, if they are going to have to pay it out either way, they may as well use that cash as long as possible and earn money with it —especially since there is absolutely no downside to the insurance company. They have to pay it out either way; they simply don’t care.
What can injured parties do about this? The attitude of today’s insurance companies makes it more important today than ever before that an injured person seek the advice of an attorney as soon as possible after the incident which caused the injury. The invaluable advice the personal injury attorney can offer as to how to deal with the insurance company, how to fully and properly document the existence of the injury and its extent, how to show the insurer or insurers the profundity of the impact the injury has had on the lifestyle of the injured person, is, unfortunately, absolutely necessary in today’s personal injury claim. Finally, the insurance adjuster who will pay out a claim just to move it off his or her desk no longer exists. Today they must be convinced to pay, convinced by someone skilled in arguing liability, causation, injury and impact. Without the thorough knowledge in these areas that the personal injury attorney possesses, today’s adjuster would rather sit on the money, increase the chance that the injured person will settle low, and resist payment as long as he or she possibly can.
Most people who are injured in an accident have never attempted to collect a claim for damages, and the insurance industry spends millions of dollars advertising how generous, caring and supportive it is. Thus, the vast majority of injured people come into a personal injury case without any sense of the insurance companies’ philosophy regarding payment of claims. We consistently see Clients in our offices who have attempted to collect a reasonable amount from an insurance company for their injuries —many times merely asking the insurance company to simply pay them for property damage, medical bills and out-of-pocket expenses —who have met with antipathy, aversion and sometimes outright antagonism and rejection of perfectly legitimate claims. Many times these Clients have made statements to the insurance company that are harmful to their claims, and they almost always have failed to properly document their injuries or to preserve their claims through taking steps necessary to do so. The result is a much more difficult case for the lawyer and in the worst cases a significant reduction in the probability of recovering the full amount due the Client.
Insurance companies also know that many people have a certain moral apprehension about bringing a lawsuit and are therefore somewhat reluctant to seek money damages in compensation for their injuries. One of the major issues in personal injury law today is how far an insurance adjuster, who’s interests are adverse to the injured party’s interests, can go in communicating with that injured party before the adjuster is considered to be giving legal advice. Many of the major insurance companies have been sanctioned or threatened by the courts with sanctions for giving legal advice to injured people who they are supposed to be paying.
Thus, it is important to remember a few things if you are injured by another person’s negligence. First, the insurance company is not your friend as long as you are looking to it to compensate you for your injuries. Your best interests are in conflict with the insurance company’s, and this applies whether it is your own insurance company or the other party’s.
Second, when you are injured by someone else’s negligence, that injury can be and is measured in monetary terms. If someone negligently damages your car, you go get an estimate for repairs and that is the measurement of the extent of your injuries. Most people are comfortable with this dea; there is no moral dilemma here. If you happen to be in the car when it is damaged and you yourself are injured in the accident, however, you have a claim not only for the damage to your car, but also for the injuries you have sustained at the hands of the person who irresponsibly caused the accident.
This is the point at which many people begin to feel uncomfortable about seeking compensation. It is important to remember, however, that there is no difference between damage to your car and damage to your person, at least in terms of a right to compensation. The only distinction between the two is how to value that damage. You cannot take yourself to a body shop and get an estimate for repairs. This, I think, is the source of much of the reluctance to seek compensation for injuries sustained that we see. People tend not to want to place a pecuniary value on human beings. This problem is particularly difficult when, in the worst circumstance, someone is killed in an accident. The emotional trauma in these kinds of cases is so great that many people don’t want to even consider the conflict involved in a lawsuit.
Good lawyers understand these issues and remain sensitive to the Client’s fragile emotional state in trying times. Your lawyer should treat you with respect, candor, and should provide you with extensive counseling and information regarding your claim. You should maintain control over all issues regarding the ultimate outcome of your case. We also understand, however, that the person who caused such losses is responsible for them, in a very real, very moral sense. That person should be held accountable for their actions. There are also substantial economic reasons for pursuing a claim against that person. Our entire system of compensation has developed over the past two hundred and fifty years primarily to allocate economic loss in the most efficient manner possible. Efficiency, in this sense, means putting the burden of loss where it makes the most sense economically, and to provide incentives for people to behave themselves in an industrialized, dangerous society. It is the way we protect ourselves from bad things happening and the way we make sure that, when bad things happen anyway, we compensate those who have lost something because of someone else’s wrong behavior. Insurance is the primary mechanism for achieving this efficiency, and this is why insurance is mandatory in every state in the Union for those who choose to drive a vehicle on our roads.
This leads us to the final point you should always remember when and if you are injured in an accident: the insurance companies of today are corporations that are in business to produce profits for their shareholders, not to provide the mechanism toward efficient distribution of loss caused by the negligence of others. Thus, your interests are adverse to the insurance company’s, and you should possess a heightened awareness of this any time you need to seek compensation under our system. For this reason alone, the expense of hiring an attorney is almost always more than worth it. A good attorney can and will tell you whether or not hiring him or her will be cost effective in the end.
The insurance company of today will almost always resist payout vigorously and for as long as possible. You should not discuss your claim with an insurance adjuster, excepting your PIP adjuster for any vehicle damage. If you are physically injured, you should contact your attorney as soon as possible after the accident in order to ensure your claim is properly documented and your treatment is handled in a way that will be acceptable to the insurance company that will ultimately pay your claim. You want an attorney that will vigorously pursue the insurance company and that knows how to handle the roadblocks they try to throw up during the course of litigation. It is equally important, however, that your attorney remain sensitive to your and your family’s needs and concerns during the course of a legal action that may otherwise be overly stressful during a time of difficulty.
If you are an injured person and you want excellent representation in your claim, we welcome you to call us for a no-charge consultation. We will explain your rights quickly and clearly and will counsel you as to your best course of action. We will explain why it does or does not make sense to hire a lawyer to represent you. Finally, we will show you how we take the burden of pursuing your claim off of you and provide you with the services you want and need while maximizing your ultimate recovery.