Two Tactics Insurance Companies Use To Pay You Less
It is almost always true that the sooner an insurer can get you to settle your claim, the better off they are and worse off you are. Insurance companies and adjusters have a number of tactics for accomplishing this. I’d like to expose two of their most common tactics.
The “I’m going to close my file” tactic
A claim isn’t a claim because an insurer says it is. You have a claim against the other party because the law says you do. And the time you have to make that claim is determined by the law not insurers. But sometimes when an adjuster is having trouble getting a person to accept an offer, the adjuster will say something like “Well, that’s my best offer, and if you don’t accept it by 5 p.m. tomorrow, I’m closing my file.”
The purpose of this tactic is to make you think once they “close their file” your claim is over. Closing their file has no impact on your claim. If an adjuster is using this on you, it’s a sure sign they want to pressure you into taking their offer because it’s a good deal for them.
The “You won’t get more with an attorney” tactic
Now, why would insurers care if you get a lawyer? Yep, money. In the 1990’s Allstate hired consulting firm McKinsey and Co. to study and recommend changes to its claims process to boost its profits. McKinsey concluded whether the claimant was represented by a lawyer made a difference in what the claimant recovered. In his book DELAY, DENY, DEFEND: Why Insurance Companies Don’t Pay Claims – And What You Can Do About It, Joe Feinman cites an example that for some uninsured motorist claims, the insurer paid ninety percent (90%) more to people who had an attorney. And in what Allstate and others now call MIST (“minor impact, soft tissue”) cases, the insurer’s average payment to people with attorneys was almost double that for people without an attorney. With those kinds of savings on the line for insurers, keeping attorneys out of cases became a major objective of adjusters.
Different insurers try different approaches to keep you from hiring an attorney. Some are aggressive and tell you they will never pay more even if you hire an attorney. Some try the friendly approach and tell you they don’t want to see you have to pay a lawyer some of you settlement. Allstate’s Claims Manual even had a “Recommended Attorney Economics Script”.
If you are talking to an insurer and hear tactics like these, it’s not a good sign for you. Get off the phone with that adjuster and call me for a free consultation. Unlike the adjuster, I have no desire to pressure you to do anything. If for some reason I don’t think you will benefit from hiring an attorney, I will gladly tell you that and even give you some pointers for finishing handling your claim yourself. You can contact me by calling the phone number or completing the “Need Help” form on the right side of this page.
Ann-Margaret Perkins is a partner with Perkins Law Firm, L.L.P. practicing personal injury and social security disability, but her claim to fame is being mom to former Southeastern Guide Dogs breeder, Baxter.