Some of the most significant factors in negotiating and settling claims cannot be found in books or classes. These factors are the practices and policies of each insurance company as well as the idiosyncrasies of the individual insurance adjusters or insurance company representatives with whom your accident attorney may deal. Experienced accident attorneys handling insurance claims will anticipate a number of scenarios unfolding with regard to adjuster valuation of claims. This is in no way to imply that all, or even most, adjusters engage in any of these evaluation ploys, but they are common enough.
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If your accident attorney sends the adjuster physician bills, the adjuster may request a copy of the doctor’s report. If your attorney submits a hospital bill, the adjuster will want a complete copy of the hospital records. If your attorney mails 20 pages of physical therapy or chiropractic bills, anticipate that the adjuster will want medical records corresponding to those bills.
Investigation not complete
The insurance adjuster defers responding to a demand or request to settle because the investigation is ongoing and not complete. Possible responses from your accident attorney to the adjuster:
- What exactly is it that you need to complete the investigation?
- What exactly have you done to get it?
- What are you doing right now to obtain it?
- When do you expect to have it?
- It’s been [X number of days/weeks/months] already — how long do you think is reasonable to conduct an investigation?
These questions put pressure on the adjuster to resolve investigative issues, make a decision and get on with the settlement talks.
Reservation of rights
The adjuster may also wait to make a settlement offer because there is a question about insurance coverage. One sign of this is when the insurer or adjuster mails its policyholder a reservation of rights letter. A reservation of rights letter is a notice that certain losses might not be covered by the policy and the company is reserving its right to deny coverage at a later date. If the adjuster has sent the policyholder a reservation of rights letter, expect the adjuster to be reluctant to engage in settlement dialogue.
Moral: Your accident attorney needs to keep the pressure on the adjuster to declare whether or not the loss is covered.
The adjuster simply ignores your accident attorney by failing to return phone calls or to respond to letters or faxes. This could be due to the high caseload that the adjuster is struggling to handle. Alternatively, it may be a calculated attempt to stall. One adjuster boasted, “I never call anyone back until they’ve left three messages.” Some adjusters proverbially stick their head in the sand — like an Ostrich — because the claimant’s injury attorney makes them uncomfortable or wants answers or decisions that adjusters are unprepared to make regarding claim value.
Cannot locate claim file
The adjuster ducks counsel’s attempts to discuss valuation by reporting that the claim file is inaccessible or cannot be located. In many claim operations, the adjuster’s files are not stored at the adjuster’s desk. They are more likely filed in a central filing area to which only a limited number of people have access. The accident attorney pursuing a claim has no way of knowing whether or not this is the case or whether the adjuster is simply buying time by saying the file cannot be located. In busy claim offices, it is not unheard of for files to get misplaced, misfiled or lost.
Dirty Harry approach — “Make my day. File suit.”
The adjuster defers coming to a realistic claim valuation because he or she sees suit as a way to reduce the pending caseload. It is a misconception among many personal injury lawyers that adjusters are somehow penalized for having claim files enter litigation. Some adjusters welcome the development for a number of reasons:
- The file transfers to a defense attorney, who in their eyes is much more agreeable to work with than claimant/plaintiff counsel
- The adjuster no longer deals with the discomforts of knocking heads with opposing counsel
- The file itself transfers, in some claims operations, into a separate Litigation Unit, removing one more file from adjusters desk
Some adjusters under-evaluate claims to save the company money. Additionally, this sends a message that there is no easy money to be had here. Adjusters also low-ball out of ignorance, or due to some oversight or blind spot in evaluating a case. Still others think low-balling a claim evaluation is the only counter to the “high-balling” the accident attorney will engage in.
The waiting game
Time is often on the side of the adjuster, so the adjuster may not be in a hurry to evaluate the worth of the claim. Long payout intervals favor insurers, who earn much of their money — not from writing insurance — but by investing. Most people do not fully appreciate that any insurance business is really two businesses combined into one. One business is underwriting insurance on risks. This rarely makes money and is often a money-loser.
More lucrative is the business of investing the money insurers take in from paid premiums. The yield or return from this side of the business is typically very lucrative, sufficient to offset the underwriting losses that insurers absorb. Typically, the longer the funds stay invested, the better the financial return for the insurer. Thus, delay in valuing or settling claims often rebounds to the insurer’s advantage.
Ten methods your accident attorney can use to “unfreeze” adjuster case evaluations
1. Ask the adjuster exactly what he or she needs
Is it an interview with you, the injured person? Tracking down a witness? A copy of the fire department report? A medical report or lost wage statement? The accident attorney should find out specifically what the adjuster needs. Get a commitment, then …
2. Provide the adjuster with any necessary items
Your accident attorney should try to work collaboratively with the adjuster to provide any reasonable item that greases the process. Chances are the information requested will be needed anyway, either through informal investigation or through more formal discovery.
3. Press for a timetable or timeline
Your accident attorney should get a commitment for the date(s) the adjuster will have what she or he needs to evaluate the case. Three days? A week? Ten days? How long will it take — should it take — for the adjuster to investigate?
4. Set a reasonable time limit
Your accident attorney should ask the adjuster, “What do you think is reasonable?” The idea is to get the adjuster’s buy-in as to what a reasonable time frame is. Your attorney should set a firm date for follow-up — either by phone or letter — to touch base with the adjuster to see if the file is “ripe” for settlement discussions.
5. Create a paper trail to prevent stalling and delaying tactics
This packs a powerful punch if it shows the insurer failed to adhere to either state claim-handling laws or its own claims manual regarding investigative timeliness.
6. Check your state Unfair Claim Practice (UCP) laws
UCP laws often specify investigative parameters for things such as the speed of adjuster investigations. Your accident attorney can compare the adjuster’s pace to the legal requirement. If there is a disparity, your personal injury attorney can point it out to the adjuster as a prod to get the valuation phase of the case concluded and to initiate discussion about settling the matter.
7. Give a time-limit demand
Your accident attorney can send a letter to the adjuster with a realistic demand, certified mail, return receipt requested. The letter should tell the adjuster politely but firmly that he or she has, say, 10-20 days to respond. It may not work, but it is worth a try.
8. Appeal to the adjuster’s supervisor or home office
Usually this is a last resort or, at least, a later resort.
9. File suit
This moves the file off the desk of a do-nothing adjuster and onto the desk of a defense attorney. The defense lawyer may break the logjam, especially when she or he explains to the adjuster the expense to defend a claim such as this.
10. Ask questions
Any question that seeks to expedite the claim or get a commitment from the insurer strengthens your position, so long as you and your accident attorney hold up your end of the deal in a timely fashion. Questions such as “If you obtained ‘X,’ when could we expect to hear from you as to your valuation of this case?” strategically puts the pressure on the adjuster to commit to a reliable time frame.