Personal Injury Insurance Negotiations Process
If you have entered into a personal injury claim, there is a high likelihood that you will have to deal with insurance company communications. For the sake of exemplary purposes, let’s say you’re involved in a car accident. You will be forced to speak with the at-fault party’s insurance company in terms of coming to a settlement amount. Or let’s say you become injured at work. You’ll most likely have to deal with your employers workers’ compensation company. Since most personal injury scenarios involve an insurance company, it is imperative that you understand what dealing with these companies entails.
The Process of Negotiation
The negotiation process with the insurance company begins once the injured party issues a demand letter indicating the amount of money they believe they are entitled to as a result of the accident. The insurance adjuster will typically contact the victim within two-weeks to offer a response to the demand. If the insurance adjuster does not respond within 2 weeks, it is recommended you call the company to confirm that they a) received the letter and b) request a tentative deadline for a response.
Once the adjuster replies, they will usually issue a letter known as the “reservation of rights”. The objective of this letter is to inform the victim that the adjuster is investigating the claim. This letter protects the insurance company against future claims derived from the incident as it is their way of starting negotiations with the victim, and it implies that the accident was in fact covered by the policy. It is also a tactic used to hint to the claimant that the insurance provider might not willingly pay for the resulting loss.
Subjects of Negotiation
During the negotiations process, insurance adjusters will ask a series of questions in an attempt to reduce the total value of the claimant’s compensation payout. Their typical disputes include:
- Coverage- Whether a claimant’s policy covers the accident
- Liability- Establishing fault for the accident in contrast to the complainant’s comparative negligence
- The seriousness of the injuries sustained- They’ll try to argue whether or not one’s injuries are truly disabling or permanent
- Medical treatment requirements- They’ll argue whether certain treatments were necessary, and whether or not the claimant had pre-existing medical conditions
After conducting their investigation, the insurance adjuster will touch on any of the above disputes to reduce the claimant’s settlement offer. This is where negotiations take place. The adjuster and claimant will negotiate until a fair settlement amount has been decided upon.
How An Insurance Claim May Be Denied
Failing to indicate material information is often grounds for an insurance claim denial. Regardless of the type of insurance, you are dealing with, it is transcribed as failing to provide the insurance with accurate information. These minor issues can affect the rates of your policy. That said, if you fail to report material information, such as the purchase of a new vehicle, residence relocation, or new drivers to your policy, the adjuster will see this as fraudulent information and can therefore deny your claim.
Fraudulent and False Claims
Many claims are denied due to the falsification of information for a higher payout. Falsification of insurance information can stay on your record for many years with the insurance company and will make it increasingly difficult to become compensated now and in the future.
Unlawful acts are generally centered on irresponsible behavior, like driving while intoxicated, driving under the influence, driving without a license, street racing, and so on. Unlawful acts are not to be taken lightly as you may lose your coverage and become uninsurable in the future.
Common Mistakes Made In Negotiating a Settlement
Agreeing To A Recorded Statement
If your adjuster requests that you provide a recorded statement, remember that you are not legally obligated to do so. Insurance companies use recorded statements to reduce your settlement. If your attorney is not present, or not involved in the discussion, do not agree to provide a recorded statement!
Giving Your Adjuster Irrelevant Information
Insurance adjusters try their best to obtain information that could negatively impact the amount you are owed. Therefore, be sure to refrain from disclosing any immaterial information, such as information about friends, family, or current and prior employers, unless of course, they pertain to your claim. Details surrounding pre-existing medical procedures should also be avoided in your conversations as they could be later used to harm your case.
Signing Medical Releases Too Soon
You should only sign medical releases towards the end of your treatment. These records are not required to be signed in the beginning of your claim. Providing your adjuster with these records prematurely can lead to a low compensation payout. We highly advise our clients to refrain from signing any of these releases until the tail-end of your treatment process.
Settling too Fast
It is not at all unusual for an adjuster to contact you within days following your accident with a settlement offer. While the thought of pursuing a personal injury claim can seem tedious, and an instant payout may be appealing, settling too fast can impact your overall out-of-pocket expenses. More often than not, the extent of one’s injuries does not become apparent until later. For example, whiplash could later result in a more dangerous injury. If you settle before the injury is prevalent, you are stuck footing the bill for future medical costs pertaining to your injury out of your own pocket. In this situation, it is best to wait until your injuries have subsided and treatment has concluded.
See: Should you accept your settlement offer?
What Insurance Adjusters Do Not Want You to Know
Insurance adjusters are concerned with settling injury claims as quickly as possible, for as little as possible. Unlike your car accident lawyer, they do not have your best interest at heart. It is their objective to get you to accept their initial offer almost instantly so they can avoid a higher payout. By working with an attorney, you can rest easy knowing that they will fight hard for your maximum compensation.
If you or a loved one has been injured in a Las Vegas accident, please do not hesitate to contact us for a free, no-obligation injury consultation. We are available 24/7 and would be honored to help you out. Call (702) 800-0988 today.