Insurance Companies Use Unfair Claims Settlement Tactics to Decrease the Value of Your Claim
Jane Pytel
January 08, 2009
Unfair claims settlement tactics by design
Unfortunately, most insurance claims settlement negotiations are not patterned to provide you with a fair settlement. More often than not, insurance claim settlement tactics are inherently unfair, and are designed to pay out the lowest amount possible.
Insurance companies use time to affect claims settlements.
Time can manifest itself as an untimely delay to wear you down, or as pressure point to force you to settle.
While time delay tactics are the more typical expectation, insurance companies likewise recognize that there are specific circumstances where they are more likely to keep settlements low if they can make an offer to you soon after your loss. The company will gamble - usually successfully - that in the immediate time frame after your loss, you are more likely to accept less than before you can consider your options. Consider the following situations.
Resist the first offer of settlement
In either of these examples, resist the first offer of settlement. Your time is well spent researching the fair market value of your loss. Check value sources online or obtain independent repair estimates from reputable repair professionals. If you are seriously injured, consider consultation with an attorney.
Recognize that if you do reject the initial offer, it is likely that the insurance company will utilize a delay of your legitimate claim to enhance your dilemma of uncertainty. Time is costing you money. Insurers are willing to gamble that this uncertainty will pressure you to such an extreme that you will agree to reconsider your previous settlement rejections.
Be persistent
Be persistent with your adjuster, but beware of follow-up offers. Adjusters are authorized specific settlement ranges to make it appear that they are fairly negotiating your claim. Understand that the adjuster's entire range is likely below the actual value of your claim. In fact, most everyone who settles within the ranges offered are settling for less than the value of what the claim is worth.
Know your rights
The purpose of insurance is to indemnify. This means you are entitled to a return to your condition prior to your loss. You cannot profit from an insurance claim, but you are entitled to a fair and equitable settlement for your damages.
Solutions for your insurance claim
Consider these initial steps to preserve your rights and to protect yourself from unfair claims settlement tactics.
Unfortunately, most insurance claims settlement negotiations are not patterned to provide you with a fair settlement. More often than not, insurance claim settlement tactics are inherently unfair, and are designed to pay out the lowest amount possible.
Insurance companies use time to affect claims settlements.
Time can manifest itself as an untimely delay to wear you down, or as pressure point to force you to settle.
While time delay tactics are the more typical expectation, insurance companies likewise recognize that there are specific circumstances where they are more likely to keep settlements low if they can make an offer to you soon after your loss. The company will gamble - usually successfully - that in the immediate time frame after your loss, you are more likely to accept less than before you can consider your options. Consider the following situations.
- Expect a lowball claim settlement offer before you have the opportunity to research the fair market value of your claim.
- If your loss involves a serious disruption in your life, fighting with the insurance company is not on the top of your list at that point. Expect your turmoil to result in a serious devaluation of your claim.
Resist the first offer of settlement
In either of these examples, resist the first offer of settlement. Your time is well spent researching the fair market value of your loss. Check value sources online or obtain independent repair estimates from reputable repair professionals. If you are seriously injured, consider consultation with an attorney.
Recognize that if you do reject the initial offer, it is likely that the insurance company will utilize a delay of your legitimate claim to enhance your dilemma of uncertainty. Time is costing you money. Insurers are willing to gamble that this uncertainty will pressure you to such an extreme that you will agree to reconsider your previous settlement rejections.
Be persistent
Be persistent with your adjuster, but beware of follow-up offers. Adjusters are authorized specific settlement ranges to make it appear that they are fairly negotiating your claim. Understand that the adjuster's entire range is likely below the actual value of your claim. In fact, most everyone who settles within the ranges offered are settling for less than the value of what the claim is worth.
Know your rights
The purpose of insurance is to indemnify. This means you are entitled to a return to your condition prior to your loss. You cannot profit from an insurance claim, but you are entitled to a fair and equitable settlement for your damages.
Solutions for your insurance claim
Consider these initial steps to preserve your rights and to protect yourself from unfair claims settlement tactics.
- Commit your adjuster to an explanation justifying the offer. Insurers are bound to provide you with a reasonable and accurate explanation of a compromised settlement.
- Unfair insurance claim tactics often include an adjuster presenting himself as an "expert" in all matters relating to your claim. You must establish evidence that this is not the case.
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