How Do Insurance Companies Negotiate Settlements?
Request Free ConsultationInsurance companies hold the key to your financial recovery after an accident. The compensation you receive may affect your ability to pay medical bills, cover lost wages or income, and move forward with your life.
Unfortunately, insurance companies prioritize their profits above all else, including your injuries and losses. Plainly stated, they don’t value your interests, so getting the compensation you need from them can be a tedious uphill battle.
Insurance companies negotiate settlements with a clear goal: to close your claim by paying you as little as possible.
If you or someone you love has been injured in an accident due to someone else’s negligence, an experienced personal injury lawyer can level the playing field. At Fuicelli & Lee, we have the skills and resources to stand up to big insurance companies and secure full, fair, and complete compensation for our clients.
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Filing an Insurance Claim
Insurance companies operate on a simple principle: managing risk while minimizing their financial exposure.
Many individuals attempt to settle with insurance companies on their own after an accident. They may not know the process, the exact steps to take, or the documentation to provide. They wind up hurting their case and recovering far less compensation than if they hired a lawyer.
With a personal injury lawyer handling your case, the process usually looks something like this:
Notifying the Insurance Company:
After an accident, your lawyer will send a letter of representation that formally opens the claim and informs the insurance company that they cannot speak with you directly. This allows you to focus on recovering from your injuries without the added stress of communication with the insurer.
Without legal representation, it is common for insurance adjusters to contact the injured party soon after an accident, often making an offer to settle before the full extent of injuries and losses is known. This can lead to the first major pitfall of handling a claim on your own, including the risk of saying the wrong thing or being tempted to accept a low settlement offer.
Gathering Information
Your lawyer will handle the collection of all relevant information about the accident and your injuries to support your claim. This includes police reports, witness statements, photos of the accident scene, medical records, and repair estimates.
With an attorney on your side, you won’t have to worry about managing this yourself. Your focus can remain on keeping track of your medical providers, maintaining a pain journal, and documenting your pain and suffering.
This is the second pitfall many claimants fall into. Without a personal injury lawyer, they may not be completely prepared or realize the full extent of their losses. They may even say something that can jeopardize their claim.
Initial Claim Filing
Filing a claim kicks off the insurance company’s investigation. They will probe your case to determine liability and assess damages. Adjusters will gather evidence, speak with witnesses, and review medical records.
Insurance adjusters will keep a hawk’s eye on the details, looking for ways to shift blame onto you, dispute your injuries, and minimize your losses. Your attorney can protect you during this time, advocate on your behalf, and ensure you receive a fair settlement.
Claim Denial or Initial Settlement Offer
The insurance company normally responds to claims with a lowball settlement offer or an outright denial. They may claim that your injuries aren’t as severe as reported or that their policyholder isn’t at fault. This is often a tactic to dissuade you from pursuing higher compensation.
Many claimants fall into this trap, thinking that’s the end of their claim or not knowing what to do next. Hiring an experienced personal injury attorney from day one allows you to clear obstacles like this.
Negotiation Phase
If you decide to contest their initial offer, you enter the negotiation phase. This involves a back-and-forth process. Without a skilled lawyer to present evidence, medical reports, and expert opinions to strengthen your case, you will likely settle for far less than you deserve.
Final Settlement Agreement
Once both parties agree on a settlement amount, a final agreement is drafted. This document is binding and usually prevents you from pursuing any further claims related to the accident.
A personal injury lawyer carefully assesses your injuries and losses, taking into account how they have affected you already and how they may impact your future. At Fuicelli & Lee, we never accept anything but the full, fair, and complete compensation our clients deserve.
If both parties cannot come to a settlement agreement, a lawsuit may be filed, and the case will enter litigation. During this process, there is still a possibility of settling before trial; however, if no agreement is reached, the case may ultimately be decided by a judge or jury.
How Insurance Companies Minimize and Deny Personal Injury Claims
Insurance Adjusters are professionals who are highly trained to safeguard their employer’s profits. Although they may seem friendly and helpful, they are working for the insurance company’s best interests, not yours.
Some of the methods used to undervalue your claim are more common than others, and different insurance companies may take approaches that they believe give them the best advantages. These strategies include:
Low Initial Offers
Don’t accept the first offer. It’s never their highest offer. The first settlement offers that insurance companies make can be alarmingly low. This tactic, sometimes called “anchoring,” aims to set a low baseline for negotiations.
For example, if your claim is worth $50,000, they might offer $15,000. This low offer can psychologically influence you, making subsequent offers that are still below your claim’s true value seem more reasonable.
Low settlement offers can lead you to doubt the value of your claim, or you may feel pressured to accept an inadequate settlement out of fear of receiving nothing. This strategy is particularly effective when claimants are facing mounting medical bills or lost wages.
Disputing Liability
Insurance companies may try to shift blame or question their policyholder’s liability in the accident. They might argue that you were partially at fault or that external factors contributed to your injuries. For instance, in a car accident case, they might claim you were speeding or that poor road conditions caused the crash.
If successful, this tactic can significantly reduce your compensation or even result in your claim being denied. In states with comparative negligence laws, even a small percentage of fault assigned to you can decrease your settlement.
In Colorado, for instance, the state’s comparative negligence laws allow you to claim damages as long as you are deemed less than 50% at fault. The court will reduce the damages it awards you by the percentage of fault it assigns to you.
Downplaying Injuries
Insurers often attempt to minimize the severity of your injuries. They might question the necessity of certain treatments, suggest your injuries are less severe than claimed, or argue that your condition is due to pre-existing issues rather than the accident.
This tactic can lead to a settlement that doesn’t cover all your medical expenses or compensate you adequately for pain and suffering. It can be particularly damaging if you have injuries that may require long-term treatment or result in chronic conditions.
Delaying Your Case
Some insurers deliberately prolong the claims process, hoping financial pressure will force you to accept a lower offer. They might request unnecessary documentation, take an unusually long time to respond to communications or extend their investigation without clear reasons.
Delays can cause significant financial strain, especially if you’re unable to work due to your injuries. The stress of mounting bills and uncertainty can make you more likely to accept an unfair settlement out of desperation.
Requesting Recorded Statements
Adjusters may request recorded statements, hoping you’ll say something that could devalue your claim. They may ask leading questions or try to get you to speculate about details you’re unsure of.
Insurance companies may use statements you gave while still dealing with the trauma of an accident or before you fully understood the extent of your injuries to contradict your claim or devalue your injuries and losses.
Social Media Monitoring
In today’s digital age, insurance companies can check claimants’ social media accounts for posts that might contradict their claims. Everything you post online can become part of the public record.
For instance, the insurance company can use a photo of you enjoying yourself at any activity to argue that your injuries aren’t as severe as you claim, even if it doesn’t accurately represent your condition.
Strengthening Your Personal Injury Claim: Do’s and Don’ts
When you’re involved in a personal injury case, what you do and don’t do can affect the strength and outcome of your case considerably.
Do’s:
- Consult a personal injury attorney: Seek legal advice before giving statements or signing documents. Choose an attorney with trial experience for stronger negotiation leverage.
- Document everything: Take photos of your injuries, property damage, and the accident scene if possible.
- Journal your post-accident experiences: Keep a daily written or video journal detailing pain levels, symptoms, and how the injury affects your daily life.
- Collect all medical expenses: Save all medical bills, prescription records, and receipts related to your injury.
- Report the accident to your insurer: if appropriate, alert your insurance company to the accident. File an official report (police report for car accidents, incident report for workplace injuries, etc.).
- Be cautious in communications: Be polite but brief when speaking with insurance adjusters. Stick to facts and avoid speculating about fault or the extent of your injuries. Direct detailed questions to your attorney.
- Gather evidence: Collect contact information from witnesses. Preserve any physical evidence related to the accident.
- Keep track of lost wages: Document all time missed from work due to your injury. Get a statement from your employer confirming lost wages and time.
- Maintain privacy: Set social media accounts to private. Avoid discussing your case or injuries on social media platforms. It is important to note that even if your account is private, what you post can still be sought after & used against you.
Don’ts:
- Don’t skip medical appointments: Attend all medical appointments. If you miss an appointment, reschedule it and document the reason for missing it.
- Don’t ignore doctor’s orders: Failing to follow medical advice can be used to argue that you contributed to your ongoing injuries.
- Don’t provide recorded statements without legal counsel: Avoid giving recorded statements to insurance companies without your attorney present.
- Don’t exaggerate your injuries: Be honest about your symptoms and limitations. Exaggeration can severely damage your credibility.
- Don’t sign medical authorizations from insurance companies: These can give insurers broad access to your medical history. Let your attorney handle these requests.
- Don’t discuss fault: Avoid admitting fault or apologizing for the accident, as this can be used against you.
- Don’t miss legal deadlines: Be aware of the statute of limitations for filing your claim. Your attorney can help ensure you meet all deadlines.
Every action you take after an accident can impact your case. You can significantly strengthen your personal injury claim by following the appropriate measures. If you are ever unsure about how something could affect your case, consult with your personal injury attorney for guidance.
The Power of Trial Experience in Personal Injury Cases
Insurance companies know that trial lawyers mean business. When a seasoned trial attorney takes on a case, it sends a clear message: this claim is prepared to go all the way to court if necessary. This readiness often leads to higher settlement offers and more favorable outcomes for injury victims.
Trial lawyers bring a unique set of skills and advantages to personal injury cases:
- Negotiation leverage: The involvement of a trial-ready attorney in your case can motivate insurance companies to offer fair settlements to avoid costly court proceedings.
- Comprehensive case preparation: Trial lawyers meticulously build every case as if it’s going to court, ensuring no detail is overlooked.
- Courtroom credibility: A lawyer’s record of successful trials enhances their reputation, which can influence settlement negotiations.
- Strategic approach: Experienced trial attorneys anticipate and counter defense strategies effectively, both in and out of the courtroom.
- Resources and connections: Trial lawyers often have access to expert witnesses and investigators who can strengthen your case.
- Readiness for any outcome: If negotiations stall, a trial lawyer can seamlessly transition to litigation without needing to transfer your case.
By working with a trial lawyer from the beginning of your case, you position yourself for the best possible outcome. Their experience, skills, and reputation can be the difference between a quick, lowball settlement and the compensation you deserve for your injuries and losses.
Fuicelli & Lee’s Trial Lawyers Can Help
Suffering injuries in an accident caused by someone else’s negligence or carelessness turns your world upside down in an instant. A personal injury law firm with a proven record of results can help get your life back on track so you can face the future with confidence. 
Our experienced team doesn’t just understand the law—we understand what you’re going through. We take a client-centered approach to every case we take on. That means a dedicated team of personal injury lawyers that has your back, ready to address any concerns you have, answer any questions, and fight for the full, fair, and complete compensation you deserve.
We work on a contingency fee basis, so you have no out-of-pocket costs or up-front expenses. You pay nothing unless we successfully resolve your case. Call us today at (303) 444-4444 to arrange a free, no-obligation consultation, or fill out our simple contact form, and we will get in touch with you.