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Do Insurance Adjusters Act in Bad Faith?

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April 25, 2024 Insurance

When filing a claim after an accident, you might feel anxious about dealing with insurance adjusters. Perhaps you have heard stories or rumors suggesting that adjusters don’t act in a claimant’s best interests. But is there truth to these claims? Do insurance adjusters ever act in bad faith?

Unfortunately, the answer is that adjusters are never on your side and will always act to benefit the company, not you.

If you suffered an injury and are dealing with an insurance company, you need a lawyer who understands the tactics insurance adjusters might use against you. If an adjuster acts in bad faith, your Denver car accident lawyer will know how to counter them.

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What Role Do Insurance Adjusters Play in the Claims Process?

Do Insurance Adjusters Act in Bad FaithWhen you file a compensation claim, the insurance company will usually assign a claims adjuster – known as the insurance adjuster – to your case. But who is that insurance adjuster, and what is their role in the claims process?

To give you a better understanding of what adjusters do, here are some of the responsibilities of these professionals:

  • Assessing the validity of a claim. Insurance adjusters play an instrumental role in determining the legitimacy of a claim. They decide if a policy covers an incident. To do this, they must conduct a thorough and fair assessment to protect the company against fraudulent claims, which can lead to higher premiums for all policyholders.
  • Investigating the claim. Adjusters delve deep into the details of each case assigned to them. Their investigation may include examining the incident report or police report, visiting the site of the occurrence to inspect any physical damage, interviewing any involved parties and witnesses, reviewing medical reports in cases of personal injury, and assessing photographic or video evidence. This comprehensive fact-finding mission pieces together what happened and determines the insurer’s liability.
  • Determining coverage and value. Once the adjuster has gathered all the necessary information, they will assess how much the insurance company should pay to settle the claim. They evaluate the extent of the damage or loss and estimate the financial value of the claim. Essentially, the adjuster’s valuation creates a starting point for negotiations over the claimant’s compensation.
  • Negotiating settlements. Adjusters are often the main point of contact between the insurance company and the claimant during settlement negotiations. They aim to negotiate a settlement based on the evidence presented and the adjuster’s claim valuation.
  • Ensuring prompt and accurate claim handling. Insurance adjusters ensure they process claims efficiently and accurately. Prolonged or mishandled claims can exacerbate stressful situations for victims, so good adjusters must work diligently and competently to move the process along.
  • Resolving disputes. Disputes over the claim’s value or policy coverage may arise. To address these disagreements, adjusters may need to clarify policy details or reevaluate the evidence. Sometimes, the parties may hire lawyers to resolve these issues.

These are the responsibilities of insurance adjusters, but that does not mean that all adjusters do their jobs fairly and in good faith. Unfortunately, every lawyer can tell you stories about insurance adjusters engaging in bad-faith practices.

Bad Faith Tactics Are Common

Statistically, insurance companies across the United States employ more than 342,000 insurance adjusters.

First and foremost, note that many – even most – insurance adjusters are ethical and professional. They undergo training to assess damage, estimate repair costs, and determine settlement amounts based on the policy and coverage. Their highly regulated jobs require them to adhere to legal mandates and industry standards of conduct.

Insurance adjusters and the companies they work for are subject to strict regulations and oversight that ensure they operate within the confines of the law.

Should an adjuster step outside these legal and ethical boundaries, your lawyer can hold them accountable and recover the compensation you deserve.

Despite the industry standards of conduct and legal regulations, insurance adjusters will do what they can to reduce payments to you and protect their employer’s bottom line. In the next sections, we will review what insurance adjusters may tell you to decrease your compensation.

Bad Faith Tactics Insurance Adjusters May Use

Insurance AdjustersEvery year, about 40 million people in the U.S. visit an emergency room for unintentional injuries. When you get injured and file an insurance claim, you expect honesty and fairness from the insurance adjuster.

However, the harsh reality is that insurance adjusters may not always have your best interests at heart. They will prioritize the insurance company’s interests over your needs.

Below are some of the most common misrepresentations you – as the claimant – may encounter when dealing with insurance adjusters.

“Your Policy Does Not Cover That.”

Insurance adjusters often claim that your policy does not cover a particular type of damage or loss. Before taking their word for it, review your policy in detail with a personal injury lawyer.

The adjuster may count on most people not reading their policies closely or hiring a lawyer to do so.

  • The Truth: Insurance adjusters may claim particular damages are not covered under your policy when they are.
  • How to Respond: Have your car accident attorney review your insurance policy carefully to determine what your policy language truly covers.

“You Have to Sign a Medical Release Form So We Can Process Your Claim.”

Adjusters might coerce you into signing a release form for your entire history of medical records, alleging it is mandatory for claim processing.

  • The Truth: Giving them access to all your medical records is unnecessary, as they should only need records regarding your accident-related injuries. They want to see past records to allege pre-existing conditions.
  • How to Respond: Never sign a document without fully understanding its implications. Consult a lawyer before signing anything from an insurance company.

“You Did Not File Your Claim in Time.”

Car Accident Insurance PolicyThis is a classic tactic to deny a claim. Insurers might have a specific window for filing claims, but trust your lawyer’s interpretation of these deadlines, not an insurance adjuster’s.

  • The Truth: To avoid processing claims, adjusters may claim you missed deadlines.
  • How to Respond: Have your lawyer check for deadlines in applicable policies. If the adjuster’s statement contradicts the policy language, provide evidence of your timely claim submission. Also, remember the statute of limitations for bringing legal action. In Colorado, for example, victims of motor vehicle accidents have three years to sue the liable party (Colorado Revised Statutes § 13-80-101), despite what an adjuster might say.

“We Cannot Go Any Higher.”

Adjusters may insist the settlement offer is the maximum possible, implying no room for negotiation.

  • The Truth: There is almost always room to negotiate for a better settlement if the offer is below policy limits. If an offer does not cover your losses, keep trying for a higher amount with legal representation.
  • How to Respond: Do not accept the first offer. Have your car accident lawyer negotiate to seek the full settlement you deserve.

“You Must Provide a Recorded Statement.”

Adjusters often claim that providing a recorded statement is compulsory or necessary to expedite the claims process.

However, providing a recorded statement is risky because anything you say they can use against you.

  • The Truth: You are not obligated to provide a recorded statement, and doing so may work against you.
  • How to Respond: Politely decline to give a recorded statement and say you’d like to speak with your lawyer first.

“The Damage Was Not Enough to File a Claim.”

Insurance adjusters may tell you that the injuries and damage are so minor you are not entitled to file a claim.

Often, adjusters will downplay the claimant’s damage to avoid a payout.

  • The Truth: No matter how small the damage or injury may seem, you can file a claim if you suffered a loss.
  • How to Respond: Document all damages and seek an independent assessment from a car accident attorney if necessary.

“You Do Not Need to Hire a Car Accident Lawyer.”

Car Accident ClaimThis statement is always a red flag that the adjuster does not have your best interests in mind.

Hiring a lawyer will protect your rights.

  • The Truth: Adjusters say this to dissuade you from getting representation, since they know lawyers regularly lead to higher settlements.
  • How to Respond: If you hear this, immediately contact a car accident attorney to discuss your rights. Most lawyers provide free initial consultations, which means you have nothing to lose by speaking with a lawyer.

If you believe an insurance adjuster tried to pay you less than you deserved, take action immediately. Never wait to seek legal advice from a lawyer you can trust.

Reasons Insurance Adjusters Act in Bad Faith

Now that you know what to expect when dealing with insurance adjusters, you might wonder, “Why do insurance adjusters act in bad faith?”

In many cases, insurance adjusters want to:

  • Protect the company’s profits. Insurance companies are businesses driven by profit. Every claim paid out directly hits the company’s bottom line. Many adjusters receive training to minimize this impact through any means that can save the company money.
  • Get you to accept a lower payout. Adjusters may try to convince you that a lower settlement is your best or only option. By understating the extent of the damages or presenting a lowball offer as a “take it or leave it” scenario, they exploit the vulnerability and urgency a claimant might feel after a traumatic event.
  • Justify the denial of your claim. Adjusters might say all kinds of things to create a narrative that justifies the denial of your claim. They may falsely assert that your policy doesn’t cover certain damages or claim lapses in the proper procedure (e.g., you missed the filing deadline) to absolve the company of any payment responsibilities.
  • Settle your claim as quickly as possible and move on. Statistically, about 97 percent of all tort claims are outside the court. The faster an adjuster can close a case, the fewer company resources are involved in investigating and negotiating your claim. That is why adjusters might rush you through the process, using pressure tactics to make you settle your claim hastily without giving you a chance to understand what amount of money you deserve.
  • Confuse you. They strategically use complex jargon and confusing policy terms to disorient you. Incomplete information can cause uncertainty about what you can claim, leading to voluntary acceptances of lesser payouts or unwarranted claim denials.

Regardless of why the insurance adjuster tries to reduce, delay, or deny your claim, you should not tolerate their behavior or think there is nothing you can do. You can contact a lawyer immediately.

How Working With a Car Accident Attorney Can Help You Counter the Insurance Adjuster’s Bad Faith Tactics

Keith Fuicelli, Denver Car Accident Lawyer

Keith Fuicelli, Car Accident Attorney

Insurance policies and claims involve complex legalese that can be difficult for someone with no legal background to understand. A lawyer with experience in insurance law knows how to navigate these complexities and ensure that your claim is being handled properly according to the terms of your policy and legal standards.

Lawyers are also skilled at spotting inconsistencies or mistaken statements that insurance adjusters might make. Lawyers are well-versed in the common tactics insurance companies use to sway claims in their favor and can recognize when an adjuster omitted or misstated information.

Lawyers know how to identify inaccuracies and collect the necessary evidence to counter false narratives put forward by insurance adjusters. They can craft legal strategies to strengthen your case, bringing all relevant facts to light and legally accounting for all of them.

Last but not least, lawyers are trained negotiators who use their legal knowledge to advocate for your best interests. If negotiations fail, a lawyer will initiate legal action and pursue the most favorable outcome in court.