Carrying insurance is a means of protecting yourself against financial losses related to automobile accidents, health issues or other unexpected problems you may experience. Most people assume that insurance companies will take care of them in a worst-case scenario, but that simply isn’t always the case.
Whether you are dealing with your own insurance company over a serious claim or a insurance company representing another driver, a product manufacturer or a medical provider, be careful. Insurance companies may take great pains to reduce their financial liability by any means necessary. That could include tricking you into admitting fault when you aren’t responsible or trying to coerce you into settling for less compensation than you deserve.
Insurance companies seek to limit how much they pay out
While you may have diligently paid your premium for many years, your insurance company will only see you as a liability when you file a major claim. No matter how much you have spent on premiums and good coverage, they hope to pay you the least amount possible without violating your contract for coverage, even if you’re dealing with a permanent injury, like a spinal cord injury.
One of the easiest ways for insurers to reduce their financial obligations to customers is by offering a low initial settlement offer. You are likely struggling to make ends meet financially, so a lump sum payment that can cover your mortgage and medical bills may seem like a great offer. Sadly, these settlements often fail to cover ongoing losses and relieve the insurance company of any future responsibility to you. You need to carefully consider the offer before you sign anything.
Add up your total losses and potential future losses
The best way to establish whether or not a settlement offer is reasonable is to compare it to the financial impact of your issue. In a car accident, for example, you would want to determine the total losses related to the crash, including lost wages, permanent disability, medical expenses (current and likely future ones as well) and property damage, including the cost to repair or replace your vehicle.
If the settlement offer from the insurance company doesn’t clearly cover all of those costs, it is too low. You can reject the offer politely or even counter with a suggestion of a more reasonable amount, providing current bills as evidence of the amount of your loss.
Be wary of making a recorded statement
Whether requested by your own insurance company or someone else’s insurer, you need to be careful about any kind of recorded statement. Insurance adjusters will often try to make you say things that sound like you share responsibility for what happened. If you get tricked, that could limit the compensation you receive, even if what happened was clearly the fault of someone else.