After a car accident, dealing with insurance can be frustrating. Although insurance companies market themselves as being a trusted ally when you need them the most, the way they operate is a different story. Their primary focus is to generate a profit, and they do that by paying out as little as possible – and even go as far as denying valid claims.
Understanding the tactics and reasons car insurance companies pay so little (or nothing at all) can help you advocate for yourself to get the compensation you deserve.
Here’s why car insurance policies fail to pay out.
The policy is part of a no-fault system
One big reason a car insurance company won’t pay much is if it’s part of a no-fault system. For example, New York is a no-fault car insurance state, and when someone is injured in a car accident, they need to file a claim with their own insurance provider. Fault isn’t a factor, which speeds up the process, but results in a drastically reduced claim payout. Pain and suffering, along with non-economic losses, aren’t recoverable with a no-fault insurance policy.
Claims are given a low maximum payout
Car insurance companies have software that uses sophisticated algorithms to calculate a maximum value for each claim. The maximum value per claim is typically the lowest possible amount that they hope a person will accept, but not so low that it seems completely unfair. However, they know people are desperate and exhausted, and many people just accept whatever they’re offered.
In reality, based on the compensation an injured party can get through a lawsuit, insurance offers are almost always unfair because they don’t consider additional types of compensation that can only be won in a lawsuit. Lawsuit settlements are typically much higher than the highest offer that comes directly from an insurance company.
Insurance companies use delay tactics
The longer someone has to wait for a payout, the more likely they are to accept whatever they’re being offered just to get their money faster. Car insurance companies know this, and will use delay tactics to wear claimants down to prolong the process.
For example, sometimes they’ll make multiple requests for documentation and force claimants to go through repeated interviews. If someone attempts to negotiate a higher payout, the insurance company will drag out the process and make the claimant fight hard for what amounts to a small increase.
One thing that can delay a payout that isn’t necessarily intentional is when multiple vehicles were involved in the accident.
Insurance companies minimize the extent of an injury
Since car insurance companies want to preserve their profits, they often minimize the extent of a claimant’s injuries and downplay them to avoid paying much. They’ll dispute medical treatments by saying they aren’t necessary, and will try to pin the injury on a pre-existing condition. When it comes to valuing future medical care, the insurance company will undervalue the cost or dismiss the need entirely.
Policy limits
Although insurance companies are not your friends, sometimes a policy just doesn’t cover much. It’s unfortunate, especially when you don’t know until it’s too late.
Car insurance companies enforce policy limits strictly, even when damages exceed coverage amounts. The company will look for any way to deny a claim based on policy exclusions or violations that void coverage.
Companies deny valid claims
Valid claims get denied all the time, and most people don’t even bother to fight. Car insurance companies know this and are actually hoping people will just give up the fight.
Sometimes it happens through an automated system, but not always. Some valid claims are denied through manual review, and former adjusters have stated that they have such a big workload to get through, they often just deny claims at face value and hope the claimant doesn’t appeal.
Evidence manipulation
You’ve probably heard that you shouldn’t make any statements after an accident, and it’s true. Insurance companies often use initial statements out of context to dispute claims. They will also scour your social media accounts, looking for evidence to use against you to challenge your injury claims.
Protect your rights and get fairly compensated
Now that you know more about how insurance companies avoid paying claims, you’re in a better position to fight for your rights and get the financial compensation you deserve.
Don’t let an insurance adjuster intimidate you. If you’ve been injured in an accident, contact a car accident attorney right away to protect your rights and ensure you get fairly compensated.
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