Why Do Insurance Companies Make Bad Offers

A good friend of mine, who happens to be a paralegal at a personal injury firm in Virginia, was involved in a motor vehicle accident about 6 months ago. I won’t go into details about the firm but they have a decent reputation and certainly would have been willing to take his case from the start. When I asked him about the accident he told me the other driver ran a red light and slammed into the driver’s side of his car. He was injured but nothing too serious (broken bone, whiplash). The police report indicated the other driver admitted to causing the accident so he assumed it was a slam dunk!

With great resistance from his employer, he decided to handle the case on his own. He assumed, as would most people, the other driver’s insurance company would be ready to make a quick offer and settle this claim because their client admitted liability.

He told me when filing the claim he was looking for compensation that covered loss of wages (didn’t make it to work that day along with several follow-up visits at the doctor’s office), medical expenses (hospital, doctor’s, pain medications etc), property damage (what a joke), and money for transportation costs (car rental, cabs etc).

I remind you that this is a very good friend of mine. When he told me what the insurance company offered on the claim, I started cracking up. I couldn’t help to laugh because I’m pretty sure considering his tenure at the firm, they would have taken his case for free.

Let’s fast forward to now. It has been 6 months and he still hasn’t received a nickel from the insurance company. I must admit if there was one person that wasn’t a licensed attorney that had to take my case; it would be him (well maybe not anymore). Well you can imagine he took some heat from his employer and rightfully so. Today, his employer is now his attorney.

The moral of the story is quite simple. Why does it take an Act of Congress for some insurance companies to pay victims like my friend, full compensation on their claims? I know that some attorneys have a bad reputation for being tenacious, but let’s admit it; they need to be when dealing with some insurance companies.

If you were involved in an accident, think twice about handling your own injury claim. Why not at least take the time and talk with an attorney before diving into a situation you are unfamiliar with? While my friend ended up hiring his employer, he at least had some knowledge of what to say and not what to say when speaking with the insurance company. If you are handling your own claim and the insurance company begins asking you questions about the accident, what will you say? Remember everything you say, can be held against you during settlement time.

Getting back to the title of this post. Why do insurance companies make bad offers? I believe insurance companies make bad offers in hopes the victim will take it. If the victim really needs the money, chances are they may jump at the first offer. Insurance companies have a bottom line to protect and the more money they pay out, the less profit they make.

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3 Responses

  1. I have a good friend that is also going through the same thing. Of course her case is a little different but nonetheless having the same problem.

    After reading this tidbit, I would have thought we were talking about the same person (he is a she). Can you find out for me about the steps he took during the waiting period? She can’t get a hold of anyone at the insurance company and she leave 2-3 vm’s on a daily basis.

    She received a letter in the mail several weeks ago about an adjuster that was still evaluating her claim. How long does it really take! She didn’t hire an attorney but from the looks of things and after reading this article, she may want to reconsider.

    There is very little information on the internet about this very topic and its driving me crazy.

    Thank you for responding if possible. Any response from anyone would be great.

  2. This is not unusual. It can take weeks or months before a settlement offer. There is no telling how long she may be waiting, its probably up to the adjuster. If the adjuster has a backlog perhaps longer. I’m not the writer of this article, but there are no real steps when waiting accept wait.

    I would make one suggestion to your friend. The next time she leaves a vm, tell her to tell the adjuster she is considering hiring an attorney. That will probably get her a call back fairly quickly.

  3. This is so irritating. I’m going through the same thing right now. I’m so pissed off at how the insurance companies can get away with this type of thing. They call you and they are initially your friend. A month later after they’ve already taken your statement and have done all their work, you never hear back from the adjuster. I’ve left about 12 messages with no return call. First call was out for a week because i’m on vacation. 2nd -12th no excuses. The best part is if they aren’t available they tell you to call their assistant or whomever number that is left on their voice mail. You do but the same thing happens. Get a letter in the mail and your dumbfounded. The conversation you had and the number that you’re looking at are so far apart. I’m so upset.

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