Insurance companies make lowball settlement offers 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 they put 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 and Personal Injuries: Always in Tension
Insurance is a trillion dollar industry in the United States, and personal injury liability insurance — which covers one person’s liability for harm done to someone else—touches virtually every aspect of Americans’ daily lives.
Motorists in most states must purchase auto liability insurance to cover the cost of accidents they cause. Mortgage lenders require home buyers to purchase and maintain insurance that covers injuries to houseguests.
Most employers carry workers’ compensation insurance to protect their employees against work-related injuries or illnesses. Businesses purchase general liability coverage to reduce the financial risk of their products or services harming customers. Healthcare providers carry malpractice insurance to cover injuries to patients done by medical errors. And on and on.
At its core, insurance is a simple business. 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.
Claims adjustment is an essential element of the insurance business. Insurers can’t just blindly pay every personal injury claim they receive. If they did, they’d go broke. But just because claims adjustment is necessary doesn’t mean it always reaches the correct result or that adjusters always do their jobs accurately or properly.
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. An auto liability insurance adjuster might, for example, obtain a police accident report or other documentation describing the crash that left a claimant injured. The adjuster might also try to speak with the injured claimant or ask for consent to review the claimant’s health records. And the adjuster might review repair invoices, medical bills, pharmacy receipts, and other documents reflecting expenses for which the claimant seeks reimbursement.
Adjusters weigh the information they learn against the three questions above, always on the lookout for any justification to deny or reduce the value of 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
For claimants, the first of those outcomes is the best, but unfortunately also the rarest. It’s far more common for an insurer to deny a claim (which might still lead to settlement negotiations) or to dispute a claim and offer a less-than-full-value payment.
What to Do When You Get a Lowball Offer
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.
It’s especially important to contact a lawyer right away if you get a settlement offer from a liability insurance company—an insurer that sold coverage to someone who is liable for harming you (like the at-fault driver in a car accident or a doctor who committed medical malpractice). Offers from liability carriers can take you by surprise because they frequently arrive out of the blue. You may never have spoken with or contacted the insurance company that makes them, which can make an unexpected offer seem like free money.
But it’s not. Getting an offer from a liability insurance company means they’ve concluded that someone they sold insurance to is liable for your losses. They quickly offer you a lowball settlement in hopes that you’ll take it before you learn from a lawyer what your claim is really worth.
Don’t fall for lowball offer tactics. Contact a lawyer instead. In virtually all cases, a skilled lawyer can get you far more than what the insurer initially offers.
How a Lawyer Can Get You More Money Than an Insurance Company First Offers
A personal injury lawyer’s job is to get you the maximum compensation available for your losses. It’s all in a day’s work for an experienced lawyer to negotiate with insurance companies and force them to pay what they owe to injured people like you. And that’s not all.
Lawyers know how to boost the value of your case by:
- Conducting investigations to reach their own conclusions about how your injuries happened and who should pay for them
- Analyzing the fine points of insurance policies to identify the scope of coverage available for your losses
- Gathering and assembling evidence to strengthen your claim for compensation
- Handling all of your dealings with insurance companies
- Preparing and submitting convincing, fully documented, insurance claims to carriers who have liability for your losses
- Following up with insurer to make sure they process your claim on time and in good faith
- Preparing and filing lawsuits on your behalf against liable parties and their insurers, when necessary to get you the best outcome possible
- Negotiating with insurance adjusters seeking favorable settlements on your behalf
- Advising you about whether to accept or reject a settlement offer
- Taking your claims to court and proving them to a judge and jury
- Making sure you actually receive the money owed to you by insurance companies and other parties
A skilled personal injury lawyer will almost always agree to do this work for you without charging you a penny upfront or as your case goes along. Instead, lawyers will usually work on contingency, meaning that their fee consists of a percentage of the money they get you. If they don’t win your case, you pay them nothing.
It won’t even cost you anything to connect with a lawyer to find out about the services they can provide. Personal injury attorneys offer free consultations. They’ll meet with you at your convenience to hear about your situation and give you an initial evaluation of your options. You won’t have to pay them for this time even if you decide not to hire them.
You have nothing to lose by contacting a lawyer after receiving a lowball offer from an insurance company. But you have potentially lots to gain.
Other Ways to Protect the Value of Your Claim
Hiring an experienced personal injury lawyer is the most significant step you can make to protect the value of your claim. But you can also help yourself by following these tips.
Don’t give a recorded statement (yet) to a claims adjuster
During the adjustment process, adjusters sometimes injured people to give recorded statements. Their goal is to record you answering loaded questions they’ve designed to trick you into saying something detrimental to your claim. Don’t agree to give a statement to an adjuster until you have a lawyer advising you. You might not have any obligation to speak with an adjuster at all, let alone on a recorded line.
Think Twice Before Posting on Social Media
Statements you make in a social media post about your injury or the accident that caused it can come back to haunt you. Claims adjusters and defense lawyers can obtain your social media content — even private and deleted posts — through the process of litigation discovery. And then they can twist what you’ve written or posted into reasons why you should not receive the full value of your claim.
Get and Follow the Medical Care You Need
Failing to take care of yourself can prompt a claims adjuster to question your injuries and the amount of compensation you’ve requested. So, always get immediate medical attention for any injury, and stick with your doctor’s treatment plan. Go to follow up appointments, do your physical therapy, take your medications, and limit your activities as directed.
Contact a Lawyer After Getting a Lowball Offer
Don’t wait to put your personal injury claim in the hands of a skilled legal professional. If you’ve received a lowball offer from an insurance company, contact an experienced personal injury lawyer in your area immediately for a free case evaluation.