What motivates an Insurance Company to pay your insurance claim? Why are Insurance Companies so difficult? Does it seem like they are making excuses and doing everything in their power to give you the runaround? The first thing you need to know is what Motivates Insurance Companies. It is Profits. Profits, Profits. Insurance Companies are in the business to make money. This is their sole mission and purpose. They want to do everything they can to Not pay. They prefer to deny claims altogether, or delay making payments as long as possible, or they try to reduce the payments they owe. Insurance companies will push their profits ahead of paying claims as far as they can before they get in trouble for unfair business practices.
Some people are motivated by the proverbial carrot. They seek pleasure from things like helping other people. While others, are motivated by the proverbial stick. They respond best to threats of loss or harm to motivate them to take action. For example, if you want your kids to clean their room, you can either offer a reward or threaten a punishment. Do you think insurance companies are motivated by altruistic goals Like helping society and seeking justice for victims of someone else’s negligence? Or, do you think they are motivated by the risk of losing money instead? When a car insurance company refuses to pay, you need to threaten them with something that will put their profits at risk. If you and your personal injury attorney believe insurance companies do the right thing and pay claims, ask yourself if you even need an attorney. If you believe insurance companies do the right thing, won’t they gladly pay you the full value of your loss? Or do you think you need to threaten them? Threatening to take something away, like profits, will motivate them to pay the full value of your claim.
There is a process insurance companies use and I call it “The 3 D’s.” Knowing the 3 D’s of Insurance Company Tactics will help you understand the processes and protect your rights. The Insurance Mantra is: Deny the Claim, Delay the Claim, and Defend the Claim First, an Insurance Company May “Deny” any Responsibility for Your Losses. Quite commonly after a crash when you call the at fault driver’s insurance company, you may get the run-around. Even when fault is obvious, such as when you are hit from behind. The adjuster might tell you they are denying liability until they get some information from their insured. They will say, “well, we have not been able to contact our insured to get any information from them, therefore we won’t look at your car, or consider your injury claim.” Or, they demand a recorded statement from you before they will do anything.
Or their first response just may be to tell you to take a hike and they are not going to pay a penny. When an insurance company refuses to pay, at our office we don’t waste time. We talk with our client and decide if we should file suit now. If the liability is clear, why wait? Waiting around for the insurance company to do something is a bad plan of action. Why not file a law suit immediately and get the ball rolling. After all, once a law suit is filed, we get to take a formal statement from the at-fault driver under oath by taking their deposition. Many people ask me this Hey, you are a lawyer, just make the insurance company do the right thing. And I say, the only way we can ever force an insurance company to do anything is with a Court Order.
They otherwise don’t have to do anything. They have the right to put up every defense they can think of. They have the right to deny payments. They have the power to defend the claim with all of their power, resources, and might. They can hire the most expensive lawyers, and experts to fight your claim. But eventually, a jury will decide what is fair. The Second “D” is “Delay” – an Insurance Company will “Delay” the Claim. If you try to settle your claim on your own and you ask the adjuster to make you an offer, they will usually reply that they need more information.
When an insurance company refuses to pay, they will start delaying your claim, hoping you will give up. They love to ask the injured person to run all around and collect tons of documents for them that they don’t really need to make you an offer. And when you provide them with what they ask for, they say thank you and then ask for something else. Then when you give them that item, they want another thing. They are always asking for more stuff from you. By giving you the run-around, the insurance company buys themselves time. They also create frustration and aggravation on your part by asking you for ridiculous things to keep you busy while they collect interest or make more profits on your money.
So, how do we deal at MattLaw with this delay tactic? We give them all of the information they need to make a fair evaluation of your claim. Then we give them a firm deadline to either pay and resolve the claim. When an insurance company refuses to pay we will file suit and seek all of our clients damages through the court process.
If they try to send us on a wild goose chase for records and documents, we will often times give the insurance company a signed medical records authorization from our client that is only good for 30 days. We tell them, “go get anything you want with this release.” Almost every time we send them a release, they never request a single document because Insurance companies are not willing to spend their time, energy and money to obtain records to fairly evaluate your claim.
They just want to delay any payments and collect interest on your money, or hope that you give up and drop your claim all together. The third “D” stand for “Defend” – Once a Suit is Filed, Insurance Companies Fight Hard to Defend the Claim. They fight hard to not pay your claim. Most insurance companies, at least the common car insurance companies have their own “in house” law firms to defend these claims. They set up a law firm, and then hire attorneys to work for them, and they are actual employees of the insurance company.
Why do they do this? Again to save money and make more profits. They used to hire private defense attorneys who would commonly defend insurance companies. But over the years they felt like they were spending too much money by hiring independent attorneys to defend them. So they decided to start their own law firms and hire employees. They pay lawyers a set salary to defend the cases brought against them. These insurance defense lawyers will defend your case vigorously. They may pay CME doctors hundreds of thousands of dollars a year, and some millions per year to examine injured people and give opinions that the victims were not hurt from the accident. If the property damage is slight to the cars, the insurance company might hire their favorite engineers who will try to say that you can’t be hurt in a car accident unless there is more property damage.
And most everyone knows you don’t look at a car to see if a person is injured, you look at the person. The insurance company might also hire a team of surveillance people to try and catch you doing something you should not be doing. They will look at your Facebook page and try to find things that might indicate you are not hurt from this accident. The bottom line is that they insurance company may defend your case all the way through a jury trial, and sometimes beyond that into appeals because all they want to do is to hold onto your money as long as they can so they can maximize their profits. Insurance companies operate from a position of maximizing profits. So, maximizing profits requires holding your money as long as possible by denying, defending and delaying claims.
Delaying claims includes denying responsibility, gathering surveillance, and hiring defense lawyers. In the end, when a car insurance company refuses to pay, you need to bring out a big stick which means you need to File a lawsuit. Threaten them with something that will cause them to lose profits. That is a jury trial. This is the only time the insurance company loses control of the claim. When the Insurance Industry won’t be fair and reasonable, you have to let the public, your community, decide what is fair compensation. You do this by using the American Jury System.
Hiring the right lawyer will make a difference in how your claim is handled. By hiring an aggressive, board certified civil trial lawyer that will actually file a lawsuit and go to trial puts the insurance company on notice immediately that they better take your claim seriously, or else they may end up facing a jury. We know, the insurance company carefully monitors lawyers track records. When you hire a lawyer who has a good reputation for keeping his word and rejecting low offers and insisting on going to trial, the insurance company will pay more. They pay less on a claim handled by a law firm that hardly ever files a law suit. Or if the law firm files suit, and then they don’t follow up and take the case to trial but Instead takes the low offer at mediation, the Insurance company just maximized their profits. Insurance companies are only at risk when they lose control of the value of your case. And the only time they experience any risk, is when a jury gets to decide what the value of your claim is. When a car insurance company refuses to pay, you need to take away their control of your claim.
Think about this, when they are negotiating, they have your money, and they have a lot of control. Because they can pay you more money at any time and close their file. Or, they can fight you tooth and nail and keep your money until you finally take steps to force them to pay you. Keep in mind that insurance companies are never forced to pay any injury claim until you have a Court Order called a Final Judgment telling them they must pay you. Until you have that in your hand, they only pay if and when they want to. Filing suit is how you take control of your case. Filing suit gives you a strong position to negotiate a better settlement. The insurance industry keeps track of lawyers track records. The insurance companies know which lawyers are bluffing, in other words they only threaten to file a law suit and hardly ever do. If they do file a suit the insurance companies know which lawyers will settle rather than fight. When a car insurance refuses to pay, it may be due to the lawyer you hired. Some law firms or law groups advertise quite a bit and they resolve and settle cases quickly and for lower value than they might be worth if your case was handled by an attorney who has a history of filing law suits and taking insurance companies all the way through a jury trial.
Because all medical billing is done electronically every doctor, and medical clinic has a Federal Tax ID number. This ID number is on every one of your medical bills. Insurance Companies compare the Federal Tax ID number of your attorney and your doctors to help set a value on your injury claim. If your lawyer has a low evaluation by the insurance company, and your doctors also have a low score, then they will place a lower value on your case. The Strength of Your Attorney and Doctors Will Determine Your Case Value. Think about it: what a great way for insurance companies to save money. If they can accurately predict the strength of your attorney and doctor, why would they pay a penny more than they have to? They can tell from handling hundreds of thousands of other claims which attorney’s won’t fight hard, so they offer them less money than the attorneys who will take them to trial.
If they can tell from the hundreds of thousands of medical claims that come in from medical clinics that just burn and churn the no-fault insurance, then they know these doctors medical records won’t be very good. When a car insurance company refuses to pay, it may be due to the doctors you are seeing for your injuries. So, choosing the best doctors is very important to the value of your injury claim. Insurance companies are weakest when they are in a court room because they don’t have control. Most times they will pay you fair value to avoid being at risk of losing at trial. However, quite often some adjuster far far away, with the use of a computer and software designed by the insurance industry has placed a value on your claim and they won’t pay more. When a car insurance company refuses to pay, you have to exploit their weakness by taking them to trial, or let them exploit you by being stuck with an unfair settlement.
It is not uncommon for defense lawyers to confess to judges, mediators and even us plaintiff lawyers that they wish the insurance company would pay more money to settle a case. But since the defense lawyer can’t write the check, the defense lawyers have to keep fighting to hold down the value of your claim. Many defense lawyers are often over worked, have too many files. The insurance companies tend to not pay them as well as private law firms. They often do not provide adequate support staff and resources for their employee/attorneys to do well in a trial either. Remember what motivates insurance companies: filing a lawsuit and going to trial. When a car insurance company refuses to pay, take them to court. Insurance companies will not respond quickly to your claim unless you pressure them with a jury trial.
Sounds easy enough, right? However, trial is not very easy. That is why so few personal injury lawyers ever go to trial. Going to trial scares most lawyers. Most lawyers settle cases for less than the fair value of the claim. Very Few Lawyers Ever go to Trial because it is Extremely Hard. When an insurance company refuses to pay, Motivating them requires a few things: You need Good liability, which means it’s easy to determine who caused the accident, You need clear Harms and losses caused by the accident, which must be documented by your doctors in your medical records, And You need an experienced personal injury lawyer who has the guts to walk into court and try your case. Find a lawyer who knows the law, medicine, and science of personal injury claims.
Also, find a lawyer who can communicate effectively to the jury. Believe it or not, the attorney you hire can make a big difference on how much your case is worth. As well as how fast you will be paid. By hiring an attorney who is board certified and one who has a track record of trying cases you improve the chances of reaching a settlement and avoiding a trial. If you have any more questions about what to do when an insurance company refuses to pay, please call me, Matt Powell, at 1-844-MATTLAW..