Guest Post: Tricks Insurance Use To Screw You
Knowing these tips are going to save you time, money, and frustration. Insurance companies love to run advertisements claiming to be almost like family to their customers—protective, supportive, and ready to help at the first sign of trouble. Unfortunately, that isn’t how they make money: insurance companies turn a profit by taking the highest possible premium while denying or downplaying as many claims as possible. The good news is, the more you know about the game, the better equipped you’ll be to get what you’ve been paying for
1. Low-balling their initial assessment of your claim
Insurance companies expect you to haggle. The first offer they give you will almost certainly be less than what you’re reasonably owed. They also know that you are likely in emotional and financial distress, so you’re vulnerable to a small, take-it-or-leave-it settlement. However, you have an advantage: as hard as it may be to wrangle with your insurance company, they want to be done quickly too; they make money by settling claims and moving on as quickly as possible. As much as possible, be patient and assertive.
2. Stall tactics
Insurance companies have numerous tools to wear claimants down into accepting an unfair settlement. They’ll “lose” forms you’ve submitted, leave you on hold, transfer you throughout the company to agents unfamiliar with your claim—all in a (deliberate) effort to waste enough of your time that you’ll simply take their unfair settlement and walk away. Unfortunately, this is one area in which the insurance company may have the upper hand, if you try to go it alone. If your insurance company plays these games, you may need to seek the help of a lawyer, and then start shopping for a more honest provider.
3. Weaseling out of personal injury claims
This is where it pays to be extremely careful in the period immediately following an accident. If you think you may be hurt, but do not immediately go to an emergency room after the accident, your insurance company may claim that you are fabricating or exaggerating your injuries. If you didn’t mention the injury to the insurance agent when you initially filed your claim, they have an additional weapon against you in the settlement. Insinuations of this kind—that you are exaggerating your claim or attempting to defraud the insurance company—are difficult to prove in court, but insurance companies are betting that you won’t take it that far.
4. “Preferred” repair shops
Many car insurance companies encourage you to get repairs done by their preferred shops, promising faster service and other incentives. It’s important, however, to notice the conflict of interest: you’ll be getting repairs done by a company that doesn’t really work for you—they’re working for the insurance company, and that means keeping the repairs as cheap as possible. They may cut corners, replacing parts cheaply or even ignoring some damage.
5. Under-estimating the value of a totaled vehicle
If your car’s repair bill would be more than 70% of what the car is worth, they will likely offer
you “fair market value” to replace the car—but not according to Edmunds or Kelley Blue Book,
or any other resource available to consumers. Instead they employ claims-servicing firms, who
use used-car lots, online sales offers, newspapers, and other resources to concoct a low, but
legally-defensible estimate for the value of your car.
General tips to defend yourself:
- Don’t sign anything offered to you by the insurance company without legal counsel
- You are not obligated to submit to a recorded interview in order to file a claim
- Have your lawyer look at your vehicle before submitting it to the claims adjuster
About The Author
Colleen Harding is a staff writer for a personal injury lawyer on topics relating to employment, labor and state law. Her passion for the legal realm started with a job as a Legal Aid and continued when she accepted a role as a Human Resources Coordinator for a mid-sized U.S. manufacturing company. She is also a member of Amnesty International as well as an active volunteer in her community.