In the wake of an ugly accident most auto insurance companies will try to speed things up and quickly come with a take-it-or-leave-it lowball offer to your doorstep. While this cheap tactic is not obvious to most of their clients, it is a fairly common practice across the insurance industry. So, why do insurance companies lowball you when you need them the most?
How Do Auto Insurers Try to Lowball Their Clients?
There are several strategies an insurance company may resort to after a car crash you should keep an eye on. Especially if hefty medical bills or impressive property damage is involved, expect them to flood you with lowball settlement offers.
If an offer is too good to be true, it probably is. So, before you sign anything and give away your rights talk to a lawyer. Also be careful about what you tell insurance adjusters as you run the risk of undermining your case.
An offer may be too low, and you may not even know it, but there are some telltale signs that the insurer carrier is not playing a fair game, like:
Minimizing your injuries
This one’s a huge red flag that the insurance company is trying to trick you into accepting an unfair offer. Keep medical records and witnesses close, and don’t get too friendly to the company’s representatives. Don’t downplay your injuries either; and never assume fault no matter how small. Let them do it for you.
The offer is made too fast
An insurance claims investigation takes months if not years, so don’t expect a fair settlement offer to pop up in your life before your injuries have been fully assessed and fault has been clearly established. If it comes too fast, they probably try to lowball you. Never sign an insurer’s initial offer without the nod from a lawyer. You may be renouncing your right to sue if you settle for their initial offers.
They’re ignoring your questions and concerns
If you notice that the insurance company’s settlement offer is too low despite you bringing the necessary evidence for them to fairly assess your loss, start asking them questions. If they refuse to tell you how they were able to reach that meager sum, it is highly likely that it is a lowball offer. If it were a fair settlement offer, they wouldn’t have to dodge your questions and concerns.
They put pressure on you
If you feel that something is not right, but they keep putting pressure on you to accept an offer, they are likely trying to rip you off. Tell them that you need time to think about their offer. If they seem not to understand plain English, cease communication and hire an attorney.
Why Do Insurance Companies Lowball Policy Holders?
Insurance carriers offer such low settlement offers for a simple reason: profit. Many insurers are so concerned about their bottom lines that they would do anything to maximize profit even if it means losing a handful of loyal clients. Their main sources of revenue are premiums and the stock market where those premiums are invested. And they protect that revenue by keeping payouts to a minimum.
Another reason insurance companies seem to try to lowball you is automation. An initial settlement offer may be decided by a computer which will match your claim to other similar claims and calculate an offer. Without human input, the algorithms will likely minimize your injuries.
What’s more, such software is usually rigged in the company’s favor. Unfortunately, many major insurance carriers use computers to calculate the initial settlement offers due to the high influx of claims, so expect errors to be common practice.
Another reason insurance companies come with lowball offers is evading justice. If the settlement is tempting enough for you to accept it, but much lower than the compensation you are eligible to via trial, a smart insurer will be able to kill two birds with one stone: protecting their profit and convincing you to drop your right to sue them if the settlement is too low. Never sign any “Release Agreement” with your insurer, unless you want to waive your right to sue them permanently.
Another reason insurance companies lowball their clients is the absence of a lawyer. Insurance company reps are strongly convinced that most of their clients won’t take them to trial for their lowball tactics. And the army of desperate or naïve people blindly accepting their initial offers is all the proof they need.
But if you hire a lawyer, it is a strong message that you mean business. A team of car accident lawyers (check out the link for more details) best knows how to negotiate with an insurance company, how to evade insurance adjusters’ cheap tactics, and how to reach a fair settlement on your behalf. What is more, you they’ll see that a lawyer has your back, they are less likely to resort to their lowball tactics.
Insurance companies lowball their clients for various reasons including protecting their bottom lines and you letting them get away with it. After a car crash, if you were badly injured or suffered major loss, consider having a car accident attorney on your side even before speaking to an insurance adjuster.
There’s a reason insurance companies have an army of attorneys at their fingertips: they won’t want to go to trial. An attorney will make sure that you reach a fair settlement before that even happens.