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Why Do Insurance Companies Low-Ball?

by | Apr 30, 2022 | Insurance | 0 comments

After a motorcycle accident, you may feel confused and stressed and experience trouble staying focused on recovery. It is not uncommon for insurance companies to offer low-ball settlements to victims after an accident.

You may struggle to negotiate with an insurance adjuster as an accident victim even if you believe you should receive higher compensation. If you were involved in an accident that wasn’t your fault, you’re entitled to compensation for your injuries and losses.

You deserve to obtain full and fair compensation for your losses which is why you should be wary of the first settlement offer you receive from the insurance company. Protecting your rights when dealing with the insurance company is essential. Hiring an experienced personal injury lawyer to represent you is the best way to ensure the insurance company considers your interests through the entire claims process.

Read on to discover what you should do if you receive a low-ball settlement offer from the insurance company.

Why Insurance Companies Give Low Settlement Offers?

Insurance Companies Low-BallAfter an accident, when you receive an offer less than what you expected, this may invoke uncertainty and worry. You may need the money quickly to pay bills and other costs related to the accident and consider taking the first offer you receive. Many accident victims deal with this common dilemma, and most do not have the luxury of time to go up against the insurance company.

If you believe you’ve found yourself in this situation, here are eight reasons why insurance companies offer low-ball settlements and your options for getting the compensation you deserve.

The Insurance Company’s Goal is to make a Profit

Low settlement offers to protect the insurance company’s bottom line. Insurance companies maximize their profits by collecting premiums, investing those premiums, and paying out as little as possible to accident victims.

The good news is insurance adjusters aren’t responsible for deciding what’s fair. Having an experienced personal injury lawyer who can negotiate with an insurance adjuster on your behalf can make all the difference in obtaining a successful settlement.

A Hasty Algorithm Generated the Settlement

In some cases, major insurance companies use and create software-computed settlement offers. While every insurance company must consider each claim fully and in good faith, they often allow computer-based estimates to compare your claim to similar claims to prepare a settlement offer.

The problem with this system is that the software works in favor of the insurance companies’ interests, and your case’s unique and complex nature of your case will not factor into a computer-based estimate. Consulting with a knowledgeable personal injury lawyer can help you avoid a low-ball offer or an unfair denial.

Many Accident Victims Accept Low Settlement Offers

Insurance companies offer low settlements because a lot of people take the bait. Many accident victims succumb to the pressure to settle for less than they deserve. Insurance adjusters know how tempting a quick payment can be to accident victims, so they typically won’t make an offer that isn’t in their best interest.

You’ve Said the Wrong Thing

Insurance adjusters know how to analyze statements by you, law enforcement, witnesses, and other parties to determine whether anything you said might work against you. Any activity or posts you make to social media that seems to go against your claim can also be evidence and lower the potential value of your settlement award.

Refrain from speaking with others about the accident, and do your best to keep from posting to social media, even if you have a private account. If the at-fault party’s insurance company requests a statement, you are not required to speak with them and should politely decline. A personal injury lawyer can speak with an insurance adjuster on your behalf so you can avoid saying the wrong thing.

They Don’t Think You’ll Count Their Offer

When insurance adjusters calculate settlement offers, they must consider two major factors; how likely the case will go to trial and how likely the company will lose. Going to court is not in the insurance company’s best interest. The proceedings often cost more money than most claims are worth, and the risk of loss means they may have to pay you more than you originally asked for. Insurance companies don’t think you’ll hire a lawyer, and by doing so, you will send a clear message that you are willing to aggressively pursue the compensation you deserve.

If you were involved in an accident where you were injured and believe the insurance company is low-balling you, consider hiring an attorney to negotiate with tricky insurance adjusters on your behalf.

Your personal injury lawyer can also advise you against taking any actions that can make it difficult to recover compensation for your case. Although filing an insurance claim may be challenging, you should never settle for less than what you need to move forward with your everyday life after an accident.

How to Know if it is a Low-Ball Offer?

Insurance companies are motivated by making money and want to settle cases quickly or delay the process hoping that you will accept an offer that won’t adequately compensate you for your losses.

While you may suspect that the insurance company is offering a settlement that is less than what you believe you’re entitled to, you should be careful not to reject a potentially suitable offer.

If you were injured in an accident that resulted from someone else’s careless actions, understanding what signs to look out for when you are being low-balled can prevent you from accepting an offer that is less than what you should receive.

Here are some signs you should look out for to avoid a low-ball settlement offer:

#1. You settled your claim too quickly

When a settlement offer comes too fast from the liable party’s insurance company,  be wary. When claims settle too quickly, it is likely a low-ball figure in most cases.

A well-detailed claim should contain a comprehensive overview of your medical documents, any witness statements, a copy of the police accident report, photos, or videos of the accident scene. Insurance adjusters who race through these documents can’t consider how the accident has affected your life and will attempt to pay you as little as possible.

#2. The adjuster is pushing to settle fast

An insurance adjuster that pressures you to accept an offer quickly is usually a sign that you’re being low-balled. Some insurance companies will go as far as to tell you that there is no time to consult with an attorney, but this is rarely the case. The insurance company wants you to take their offer before finding out that you might recover more. Consult an attorney who possesses the knowledge, patience, time, and expertise for a potentially lengthy negotiation.

#3. They dismiss evidence of liability

Another tactic insurance companies use to avoid paying full and fair compensation to accident victims is ignoring or dismissing evidence. Placing the blame on the victim is also common and can help the insurance company justify why they should pay you less than what you deserve.

Including evidence of the other party’s liability is essential and can help you in case insurers attempt to blame you for your injuries. The evidence you include in your insurance claim should show that the negligent party owed you a duty of care, breached that duty, and that breach of care resulted in your injuries and losses.

Some evidence you may want to support your case includes medical bills, witness statements, copies of the police report, photos, or videos of the accident scene. If the insurance company tells you that they need access to your medical history, you should call an attorney. You are not required to give the insurance company access to your entire medical history. You should limit the medical documentation you share with the insurance company to accident-related injuries only.

#4. They suddenly go silent

Insurance companies may suddenly stop communicating with an accident victim as a tactic to get them to accept a low-ball offer. They may leave phone calls or emails unanswered, and when you have medical bills piling up and no way to pay them, this creates anxiety. When you’re panicked, you may feel pressured to accept the first offer the insurance company makes.

The insurance company also doesn’t want you to know that you can always make a counteroffer. Most people aren’t aware of their rights after an accident. Consulting with a personal injury attorney can give you a better understanding of your legal options after an accident so you can focus on recovery.

#5. The adjuster questions your injuries

A popular tactic for insurance adjusters is to question the validity of an accident victim’s injury. When an adjuster implies that your injuries occurred due to a pre-existing condition, they can use this as an excuse to undervalue your claim.

To avoid having an insurance adjuster question the validity of your injuries:

  • Take and keep photos of your injuries
  • Gather copies of your medical tests
  • Ask your doctor to write a statement about the nature of your injuries
  • Make a detailed list explaining how the injuries have affected your life.

An experienced personal injury attorney is familiar with the tactics used by the insurance companies to cheat people. Getting advice from one of our lawyers can prevent you from accepting an offer far less than what you deserve.

#6. They won’t give you a straight answer

When insurers won’t explain the math and can’t tell you precisely how they arrived at the settlement offer they’ve given you, you can assume you’re being low-balled. Insurance companies will commonly try to save money on emotional damages like pain and suffering, but you have every right to ask how the insurance company arrived at their offer. A qualified personal injury lawyer can help you understand what economic damages and emotional losses you may be entitled to in your claim.

Let Experienced Personal Injury Lawyers Fight for You

Filing an insurance claim is already challenging enough. Dealing with an insurance company that uses underhanded tactics to protect its bottom line will make it even more challenging to collect the compensation you need to recover. Injury lawyers have experience dealing with tricky insurance companies and are ready to fight back against a low-ball settlement offer.

What should I do if I receive a low-ball offer?

If you believe the insurance company has failed to compensate you fairly, speak to a personal injury attorney as soon as possible. Hiring an attorney will signal to the insurance company that you’re serious about pursuing full and fair compensation for your losses. You shouldn’t settle for less than you deserve when you feel like the insurance company undercalculated your losses.

What does it mean for the insurance company to act in bad faith?

An example of bad faith insurance practices is when the insurance company makes a low-ball settlement offer regardless of the facts of your case. Insurance companies that operate on a deny first, defend later policy may also be vulnerable to an insurance bad faith lawsuit.

A deny first, defend later strategy means they will often send out denials or low settlement offers without thoroughly evaluating critical pieces of evidence in the claim. An attorney can protect you from the insurance company handling your claim in bad faith and help you hold the liable party accountable for your losses.

What mistakes should I avoid if the insurance company is low-balling me?

Do not accept the first settlement offer without talking to an experienced personal injury attorney. Once you accept a settlement offer, you can no longer continue pursuing your claim. The most serious mistake to avoid when dealing with an insurance company that makes it difficult for you to obtain the compensation you need to move forward is to avoid giving in to any of their tactics.

If the at-fault party’s insurance company contacts you and requests a statement, you are not obligated to speak with them and should politely decline. Fighting for the compensation and refraining from giving in to the insurance company will be well worth it.