Improper Settlement Tactics by Insurance Adjusters


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Claims adjusters are hired to save their company’s money. And although most adjusters do their jobs within the rules, there are a few who will try to break those rules if they think they can get away with it. This article alerts you to a number of the improper settlement negotiation tactics that some ­adjusters use and explains how to respond if an adjuster tries one on you.

“Settle With the Other Company”

When beginning negotiations, an adjuster may tell you to contact the insurance company for another person or business involved in the accident because that other person or business was more responsible than its insured. Politely remind the adjuster that until one company or the other commits itself in writing to be the primary insurance carrier, you are entitled to proceed against either responsible party and that you are doing so against that adjuster’s insured.

“You Waited Too Long”

If there was any delay between your accident and when you notified the insurance company in writing of your intention to file a claim, an ­insurance adjuster might try to intimidate you by telling you that you waited too long and that the delay might now disqualify your claim.

In fact, in third-party claims there is no time limit other than the statute of limitations within which you must file a notice of claim. The exception is for an injury claim against the government.

If the adjuster for a third party contends that you delayed “too long” or asks why you waited to file your claim when you are still well within the statute of limitations, remind the adjuster that there is no other time limit for filing a liability claim and politely demand that the adjuster move onto actual settlement negotiations.

If you are filing a claim under your own insurance coverage, your policy may require that a notice of injury be filed within a specific number of days or within a reasonable time after the ­accident. But even if you have delayed before filing a notice of claim, the insurance company must honor your claim unless the claim was so late that it negatively affected (prejudiced) the insurance company’s ability to investigate the claim.

It is up to an insurance company to prove any prejudice caused by the delay -- for example, that it was unable to investigate the scene of the accident or that evidence was destroyed. And it is very rarely able to do so. You do not need to prove that there was no prejudice.

Tell the claims adjuster the reasons for the ­delay in notifying the insurance company: for example, you didn’t know who the responsible party might be; you were not provided with adequate insurance information; your injuries made it impossible for you to investigate for a while. But do not concede that the time was ­unreasonable. And do not permit the adjuster to put you off your claim. This tactic of suggesting that you filed your claim too late is just an attempt to make you so nervous that you will jump at any small settlement offer out of fear of losing your claim entirely.

Unless the adjuster offers to prove specific prejudice to the insurance company, ignore any comments about a delayed claim. If the adjuster continues to deny your claim altogether, you will have to move on to other negotiating tactics.

“You Weren’t Out of Pocket”

As mentioned several times, whether you paid for medical care out of your own pocket or it was paid for by your health or other insurance is none of the claims adjuster’s business (learn more about who pays medical bills after an accident or injury). And it is none of the adjuster’s business whether or not your lost time at work was covered by sick leave or vacation pay. Under what is known as the “collateral source rule,” it is improper for a claims adjuster to consider other sources of ­payment in determining a reasonable settlement amount. In fact, the adjuster isn’t even supposed to ask you about such other payments.

The reasoning behind the collateral source rule is simple. A person who causes injuries should not benefit because you have taken the precaution of paying for health or other medical insurance coverage -- nor by the fact that by working steadily you have earned the right to sick leave or vacation time.

If an adjuster so much as breathes anything about other sources of medical or income payments, remind the adjuster that the collateral source rule prohibits such questions. Say that you will consider any further reference to collateral payment sources to be bad faith settlement tactics. You are not likely to hear about collateral sources again. But if by some strange chance you do, report the matter to the adjuster’s superior and to your state’s insurance department, as described below.

This article is an excerpt from How to Win Your Personal Injury Claim by Attorney Joseph Matthews.

Updated by: , J.D.

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