The Tactics Insurance Companies Use to Pay You Less

I call it the triple D. Their goal in life is always to delay, deny, and defend themselves.

That's the job description rather than me being dramatic about it. An adjuster is not a neutral party weighing your claim on its merits, and when they behave the way this chapter describes they're usually not acting in bad faith by their own lights either. They're doing what they were hired to do, which is to pay out as little as the file allows.

Sometimes my staff will come to me holding a letter and say, oh my gosh, they're denying the claim, what do we do. And I tell them, I don't care. That's what they do. They just deny claims. It means we push, and we move forward.

You should know the plays before they get run on you. Here are the ones I see most.

This one happens when there's nothing anchoring what happened. No police report, no dash cam, no video of anybody saying anything.

Sometimes the other driver is very forthcoming and truthful at the scene. Then the insurance company gets to them and asks, are you really sure that's how it happened. And the driver gets confused, and they say, you know what, I'm not sure.

At that point the insurer disputes liability. And any way they can put a percentage of fault on you, they will.

That reduces your claim directly. So let's say your case is worth $1,000. If they put 50 percent on you, now you can only recover $500. That's $500 just thrown out the window.

There's a related version they run without any help from their insured at all, which is the speed attack. They argue you were traveling too fast for conditions and could have avoided the crash if you had been going slower. It manufactures a comparative fault out of thin air. It has nothing to do with evidence. They just launch it, because now you're the one who has to prove you weren't speeding, and it is not obvious how you would do that.

Once you send a settlement proposal letter, the insurer has a deadline to answer it. For a demand made before a lawsuit and within the policy limits, California law requires that deadline to be at least 30 days out when the letter is emailed. We like to give them 32 days, so there's no argument about timing.

A lot of times, if you don't follow up with them before that 30 day mark, they'll call you right on the deadline and say, hey, I can't give you a response, I'm missing this bill. When it was all there.

The counter is procedural and it's boring, which is why it works. About a week after the demand goes out, follow up and confirm. Ask whether they received everything and whether anything is missing, and get it in writing. If they say they have everything, then they can't turn around at day 30 and reset their own clock.

Here's the part that explains why documents genuinely do go missing sometimes, without anyone plotting it.

When you send off your settlement proposal letter with the medical bills, the medical reports, the lost wage pay stubs, the pictures of your injuries, things of that nature, it does not land on one desk. It gets separated when you email them. The billing department sorts the bills. The medical records department sorts through the records. Everything else gets sorted into different departments.

Afterward those departments draft up little memos, little reports, and hand them to the adjuster saying this is how much we think the case is worth. And then the adjuster does what the adjuster will.

Sometimes it's true that a bill got lost during that whole process. I don't assume bad faith every time something goes missing, because I have watched how many hands that package passes through. But it doesn't matter much which it was. The confirmation letter protects you either way, and that's the only reason to send it.

People assume filing a lawsuit puts an end to the stalling. It does not, and the reason is structural.

Defense attorneys hired by insurance companies bill by the hour. Their goal is always to delay it as long as possible, because the longer they keep the case open, the more the attorneys can bill the insurance companies. The same incentive that shaped the adjuster's calendar before suit carries straight through afterward.

You see it in small, stupid ways. When you do trial prep, it's binders that fill up half a room, and you have to put them on trolleys and bring them to the court. And you have to coordinate with the other side and have them sign off on it, which is always a headache because they never like to sign off on anything. They don't want to agree to anything.

And then when you go to court and you say the other side didn't sign off on it, only we get chewed out. We're the only ones who get chewed out, because it's our case, so we're supposed to figure that out.

That's the environment. It's the reason I would rather build leverage early, out of records and evidence, than rely on how a conversation with an adjuster goes.

This is the subtlest one on the list and it's the one that sends people to a lawyer.

I hear it all the time. People always start off with, I never wanted to hire an attorney, I wasn't even thinking about hiring an attorney, but the insurance company is not listening to me.

That's always what it comes down to, the insurance company not listening. They throw a settlement offer out there, and the client says, but what about my treatment. But what about my pain. But what about this imaging I need.

And they say, no, yeah, here's a hundred dollars more.

But it does not answer the question. Just throwing money out there doesn't answer the questions and does not address their concerns. That pattern, more than the size of any single offer, is the real signal that you are not being heard.

Gap in treatment is a huge one. They use it not only to reduce the value of your case, but to deny your claim entirely.

Let's say your symptoms don't come up until a week later, and you go a week later. Now the adjuster is going to say, maybe you just slept wrong. Maybe you just went to the gym. Maybe you were just carrying something. They start making stuff up, because anything could have happened within that week, and that's their argument.

That's the practical reason behind everything in Chapter 2. Getting seen the day after, even with no symptoms, closes the whole line of attack before anyone gets to raise it.

The gap does not only open at the beginning. Usually the urgent care will tell you to follow up with your primary doctor. Make that appointment and do everything they tell you, because the moment you don't listen to the doctor, the adjusters will say, okay, well, he is not hurt, that's why he didn't follow the doctor's instructions.

And there's a word they attach to you before any of this even starts. Soft tissue.

Soft tissue is verbiage insurance companies use, and they use it to put a minimal value on your claim. Never in my career, in my history, have I ever said our client has soft tissue injuries. Number one, you don't know that. And number two, saying it already puts a lower end value on the claim.

Most of the time they label it soft tissue right off the bat, unless the damages are pretty horrific, a totaled car, a rollover, a head-on. They're setting what are called reserves, which is the range of settlement they're going to authorize on that claim. The moment you agree that it's soft tissue, you're married into that lower tier.

So when the adjuster calls and asks what your current treatment status is, what your injuries are, what you're doing nowadays as far as treatment goes, a lot of firms just say, oh, the client is still treating. I think they believe it's bad to give information. It's the opposite, because vague tells the adjuster nothing, and nothing keeps you in the tier they put you in on day one.