Getting injured in a car accident is bad enough. But getting fleeced on a settlement is enough to make you pull out your hair. However, with the right approach, you can increase your odds of obtaining the settlement you rightfully deserve.
The Dark Underbelly of the Insurance Biz
When you see car insurance commercials for major names like State Farm, Allstate, and Farmers, they like to make themselves out as the friendly heroes we all need in times of crisis. But this is largely marketing, branding, and PR. The truth is much darker and more capitalistic in nature. And it usually takes a serious car accident with injuries, medical bills, and expenses for the average driver to realize that they’re nothing more than a “float” for the insurance company.
In the insurance world, a “float” refers to the clever way in which these companies leverage premium payments to turn a profit. Here’s how it works:
- An insurance company is required by law to set aside a “holdback” or “reserve” from any premiums they receive from policyholders.
- U.S. tax laws do not require auto insurance companies to pay taxes on money they set aside to pay your claims. They only have to pay taxes on premiums when they’re paid out.
- To get around this, insurance companies invest the money they should really be paying out.
In other words, auto insurance companies invest the money they set aside to pay out claims on a tax deferred basis. Accountants call this the “float.”
While the goal of an insurance company should be to compensate legitimate injury claims, they often fall way short of this mission. Instead, they pursue fractional settlements, deny claims, and delay payments – all while turning fat profits on the money that should go towards paying your medical bills, lost wages, and pain and suffering.
It really is a cruel business. Yet with all of the splashy commercials, funny ads, and handsome spokespeople, most of the marketplace never sees it for what it is.
The Factors, Tactics, and Techniques for Success
Now that you understand what you’re up against, perhaps you’ll understand why insurance companies are so reticent to dish out money. If you want to increase your odds of obtaining the settlement or payout that you rightfully deserve, you’ll have to be intentional, disciplined, and strategic. Here’s some of the science behind winning the fight:
1. Preserve Evidence
Car insurance companies and their adjusters care about facts not feelings. It doesn’t matter if you feel like you’re owed something, they’ll need firm facts – facts they suspect will hold up in a trial – before they’ll let you use them as leverage. This is why the preservation of strong evidence is so important.
Clarity can be hard to come by in the aftermath of an accident, but make sure you document what happened as soon as possible (even when you’re still at the scene, if possible). This may include taking pictures, gathering statements, recording your own statement, etc.
2. Hire the Right Lawyer
When you’re injured in a car accident, there are plenty of lawyers ready to pounce. The key is to choose the right one – the lawyer who will help you fight for a maximum payout, rather than chase a quick dollar and toss you aside.
When it comes to hiring a lawyer, look at experience and reputation. You should also schedule a consultation to understand their approach and process.
3. Follow the Right process
A skilled, honest lawyer will follow a thorough process (rather than a hasty strategy that allows them to make fast money). This means digging in and looking at every aspect of the claim.
Any lawyer you consider hiring needs to look beyond physical injuries and evaluate the full extent of your situation. Otherwise, they aren’t truly looking out for your best interests.
4. Negotiations
Armed with the right facts and numbers, your odds of winning a robust car accident settlement ultimately come down to your lawyer’s ability to negotiate with the insurance company.
Settlement negotiations are tough – even downright nasty. You need a lawyer who understands the ins and outs of the industry and how to twist the adjustor’s arm. They should be quick to make calculated offers, but even quicker to hang up the phone when the insurance company tries to lowball you. Otherwise, you’ll end up on the wrong side of the payout.
Avoiding Trial
Whatever you do, you want to avoid a trial.
As the term insinuates, you might be forced to settle for less than you think you’re owed. But if you put up a good fight and employ the right tactics, you can rest easier at night knowing the insurance company paid out far more than they would have liked.
Car accident injury claims are tough. The more you know, the higher your odds for success become.