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why do insurance companies delay settlements?

Why Do Insurance Companies Delay Settlements?

When someone is injured in an accident or event that is the fault of another party, they usually have to obtain reimbursement for their losses from the other party’s insurance company. But even if the facts and evidence of the claim are pretty straightforward and there is no dispute about who was to blame, it can still be very difficult to recover the just compensation you deserve.

Filing an insurance claim is a complicated and confusing process, and this is largely by design.  Insurance companies will tell you that they need to have a complex process in place with specific steps to follow, otherwise, too many people would get away with filing false claims.  But another reason the system is set up this way is so they can delay the process and wait as long as possible before having to pay out a claim.

Why do Insurance Companies Delay Claims?

Insurers market themselves to the general public as “good neighbors”, “good hands people”, and other feel-good terms that are designed to give you the impression that they are looking out for you. But the truth is, most insurance carriers are for-profit entities whose primary goal is to protect their bottom line. They want to pay out as little as possible when an injured party files a claim, and as such, their interests are not aligned with that those of the claimant.

One of the common tactics an insurance company may use to mitigate their losses is to unnecessarily delay a claim. There are several points during the process when this may be done. For example, the insurer may be very slow in responding to your claim or communicating with you about various aspects of it. Another tactic they might use is to ask for information from you that they do not need, knowing it will take a lot of time and legwork for you to obtain it.

Perhaps the most egregious delay tactic is to simply “go dark” and stop responding for several weeks or months after a claimant refuses a lowball settlement offer. Instead of negotiating in good faith to come to a reasonable settlement, the insurer stops communicating with the claimant, hoping to frustrate them into accepting whatever paltry offer they present.

How Insurance Companies Profit from Delaying Claims

Whatever delay tactic they use, this all works to the insurance company’s advantage in the following ways:

  • Generates more Revenue: The first and most obvious reason an insurer wants to wait as long as possible before paying a claim is so they can hold onto the money longer and earn more interest on it. Many people do not realize that a significant portion of the profits an insurance company makes come from interest on savings and returns on investments. So naturally, an insurance carrier is never in a big hurry to take money out of an interest-bearing account and hand it over to a personal injury claimant.
  • Motivates the Claimant to Accept Less: Insurance companies know that, when someone is injured in an accident, they are usually out of work for an extended period of time and finances are tight. And as we eluded to earlier, by presenting a lowball settlement offer and dragging their feet during the process, they hope to frustrate the claimant into believing that this is all they are going to get and that they had better accept it.
  • Runs Out the Clock on the Statute of Limitations for Injury Lawsuits: Whether a claimant accepts an unfair settlement offer or not, the insurance company does not mind holding onto the money, earning interest on it, and letting the weeks and months tick by. Because they know that the statute of limitations for filing a personal injury lawsuit will eventually expire, taking away any leverage the claimant has to secure a more favorable settlement.

Insurance Company Delaying your Claim? Call Burns, Cunningham & Mackey, P.C. for Legal Help

If you or someone close to you has suffered injury in Alabama and you are having trouble with your insurance claim, call Burns, Cunningham & Mackey, P.C. for immediate assistance. Insurers use delays and other tactics to try to deny injury victims what they are rightfully owed, and we put our extensive experience to work to successfully thwart these tactics and recover maximum compensation on behalf of each client we serve.

Contact our Mobile office today at (251) 260-3815 or message us through our online contact form to schedule your free consultation.

personal injury

How to Negotiate a Fair Injury Settlement

If you or someone you care about has suffered an injury and it was the fault of another party, you deserve full compensation for your losses. Unfortunately, recovering what you deserve is not always a smooth or simple process.

It would be a rare occurrence for the responsible party to simply walk up to you and write a check for your medical expenses, lost wages, property damage, and pain and suffering. In truth, you and your family have probably been through a lot, and there may be more hardships on the way.

While it might be a nice day when you get a settlement check and take it to the bank, you will completely forfeit your right to seek additional compensation as soon as you cash that check. This is why negotiating a full and fair settlement is vital from the start.

Know the Full Value of Your Personal Injury Case

As an accident victim and someone that probably doesn’t have much experience with personal injury law, you may not know whether the amount you’ve been offered is fair compensation for your injuries. By accepting the offer, you might later find that your medical expenses and lost wages are higher than you originally believed.

There are some online personal injury settlement calculators that some people use as a gauge. These are not only unhelpful but can also be dangerous. Assessing the value of your claim with a standard online tool isn’t likely to deliver an accurate result. There are several reasons for this.

  • State laws vary drastically. What is a high-value case in one state may not be worth much in another due to the different ways that state’s approach negligence and even limit the payment of damages. This is a factor that can dramatically impact the value of your case.
  • They can’t account for all relevant factors. Some personal injury cases have legal issues related to lost income, pre-existing conditions, and shared fault. An online calculator may not be able to account for this.
  • You may not have all the required information. These tools ask you input a great deal of information, some of which you might not have. Estimating some of these figures often requires the assistance of someone with more experience.

Tips for Negotiating a Favorable Injury Settlement

Getting a fair settlement after an injury is a process. Immediately following an accident, the best thing you can do is to remain at the scene and collect as much information as possible. Keep a record of all evidence, and seek immediate medical care to document any injuries.

It is a common misconception that the insurance company is on your side. Even your own insurer just wants to close its case as quickly and as cheaply as possible. Avoid speaking about your accident to an insurance adjuster or anyone else until you first discuss your situation with an experienced accident attorney.

The negotiation process in an Alabama injury case involves several steps. Depending on the nature of your injuries and the type of case, these may vary slightly. 

  1. File a claim. This begins when you file a claim with the insurance company. Be sure to follow the insurer’s instructions for notice, which is generally as soon as possible after an accident.
  2. Initial letter. The insurer will send you a “Reservation of Rights” letter, which informs you that they are investigating your case but haven’t admitted liability.
  3. Demand letter. You and your attorney can work on your initial demand letter, which is only sent after you have medically stabilized. This is a letter telling the insurance company what you believe is a fair settlement.
  4. Response. The insurance company will respond to your demand letter, generally with a counter-offer. This process can go back and forth until you reach a settlement agreement or until you decide to take your case to court.

Contact an Experienced Alabama Personal Injury Attorney

At Burns, Cunningham & Mackey, P.C., we understand the confusion, stress, and anger that often accompanies a senseless injury. If you or someone you love has been injured due to another party’s careless or negligent behavior, we are here to help.

When you work with us, we will not only advocate for your rights as an accident victim but will also put our vast experience to work on your behalf as we fight for the compensation you deserve. And by this, we mean full and fair compensation, not a compromise that will leave you struggling to pay your bills.

Contact our Mobile office today at (800) 574-4332 or reach out to us online to schedule a free consultation to discuss your case.