Most of us never plan to be in an accident, and yet we pay monthly premiums to an insurance company to have peace of mind, be responsible drivers, and comply with state laws. We often do not become familiar with the car accident settlement procedure until the worst has already happened.
Learning now about how to navigate the insurance settlement process will help you protect your loved ones and your own financial future. If you are currently trying to manage your own insurance claim, read on to learn why you should not accept the first settlement offer after a car accident.
Insurance Companies Protect Their Own Interests
Immediately following your car accident, and as soon as you leave the hospital, you may receive a settlement offer from the insurance company. This amazing speed and efficiency should make you pause to consider how an insurance company makes its profits.
As pleasant and supportive as their slogans and marketing materials may sound, an insurance company makes money when their customers do not make claims. When a covered accident happens, a claims adjuster will make the lowest possible offer to settle the matter, to reap the most profits for the company at the end of the year.
Here are some important factors to consider when you receive a quick insurance company offer after an accident:
- Your insurance company is not required to look out for your interests.
- The first settlement offer you receive is unlikely to be fair and complete.
- The company knows that by settling early they will avoid being responsible for later medical bills, unforeseen costs, or hidden damage to vehicles.
- Collecting premiums and paying the absolute minimum to settle claims increases the insurance company’s profit margin and individual employee bonuses.
- Your insurance company is not your ally, but there are local law firms waiting to help you push back and obtain a fair settlement agreement for your personal injuries and losses.
The First Insurance Settlement Offer Is a Calculated Bet
A large national insurance company receives many claims each day, and the most cost-effective way to manage this is to take a first pass by computer software algorithms. They use programming to do a quick analysis of your claim, compare it to what they consider to be similar claims, and then make an offer which is some calculated percentage of the average payout.
There are a number of reasons this works to their advantage:
- Most people are off-balance or vulnerable and need money right away, and they may trust their agent and accept the first settlement offer after an accident.
- Once you accept their lowball insurance settlement offer, they know you will lose your right to sue or renegotiate regarding this accident.
- They know from experience that most people will not hire a lawyer to help with settlement negotiations, and they factor that into their calculations.
They Will Use Your Statements Against You
Insurance agents and claims adjusters are trained in the art of negotiation. They know well how to get you to say more than you intend and to turn your statements into admissions that you were partly at fault for your accident. They will take your statement and ask you to sign what they have written or coach you into entering the responses that will limit your settlement amount.
Working with an attorney early will help you remember to:
- Not agree to the claims adjuster’s version of what happened, say yes to leading questions, or sign anything during an interview without your attorney present.
- Make only clear and accurate statements to law enforcement and obtain a copy of the police report.
- Avoid making statements to witnesses, friends, neighbors, or auto repair shop employees about what happened.
- Not make comments or post pictures on social media about the accident.
- Avoid engaging in activities or making remarks, even as a joke, that would make it appear as if your reported injuries or details of the accident were not accurate.
- If you are worried that you may have said the wrong things or made statements that lowered the amount of the insurance settlement you are being offered, talk to an experienced personal injury attorney in Houston or your area.
Insurance Companies Will Use Professional Pressure Tactics
When you do refuse to sign the first offer and begin your own negotiation toward a second settlement offer, the insurance company has a wide array of tactics to deter you. Some of these strategies include:
- Delaying their responses, transferring you to different agents, and ignoring your calls or letters in an effort to make you give up or allow the statute of limitations to run out. In Texas, you have two years to file a personal injury lawsuit.
- Fear tactics such as suggesting you will lose your driver’s license or not be able to obtain car insurance in the future. Remember that, in Texas, your license cannot be suspended until a court has issued a judgment against you.
- Implying or openly suggesting that you are faking your injuries and attempting to commit insurance fraud, especially if you did not receive emergency care.
- Sending an automatic denial of your claim as their first or second approach, which may be a breach of their duty and make them vulnerable to being sued—something about which a lawyer can advise you.
Protecting Your Own Interests After an Accident
So, who is on your side when it comes to obtaining a full and fair car accident settlement? The answer is you, and the professionals you engage to advocate on your behalf. Some of the reasons to consider getting professional legal advice before signing or agreeing to a settlement are:
- Avoiding selling off your right to sue for uncovered medical bills and lost wages.
- Obtaining coverage for expected accident-related bills and fair compensation for your totaled vehicle.
- Providing the best possible settlement for your own financial future and that of your family.
- Preserving your ability to obtain a delayed insurance settlement or one which has been unfairly denied.
- Protecting yourself from unfair claims of insurance fraud or collections activity by insurance companies who have denied your claim.
- Investigating the possibility that an insurance company has operated in bad faith regarding their responsibilities to you as a customer.
In the Houston, TX area, contact us at Johnson Garcia LLP to leverage our 25 years of combined experience in representing corporate clients involved in personal injury lawsuits. That wealth of knowledge about the tactics your insurance company will use to limit the amount of your settlement will tip the scales in your favor during this important negotiation.
The small investment in sound legal advice will put your mind at ease about the insurance claims settlement process and help you know if that first or second settlement offer is the best you are likely to receive. Reach out today to have an ally on your side or find out more about personal injury representation in our area.