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Why you need a lawyer to fight the insurance company

On February 7, 2007, CNN investigative reporters revealed damning evidence against major insurance companies, such as State Farm and Allstate, which have been accumulating billions in profits by underpaying injured car accident victims. The money these insurance companies deny car accident victims should go toward doctor visits, lost wages, and  rehabilitation. However, new strategies adopted by insurance companies have adjusters making take-it-or-leave-it payout offers that in many cases don't even cover a fraction of the victims' expenses.

Imagine you are driving along and another car comes out of  nowhere and runs into the side of your car, injuring you to the point where you can barely walk, are in severe pain, and need doctor visits, CT scans, X-rays, MIRs and rehabilitation. Shouldn't you expect the insurance company of the driver who hit you to pay those bills?

Roxanne Martinez did. CNN reported that when she was hit by an SUV on the passenger side of her car, she was smashed up against her driver-side window, damaging her spine. Her medical bills quickly accumulated and she thought Allstate, the insurer of the driver who hit her, would pay for her injuries.  Allstate offered her a meger $15,000 for her $25,000 in medical expenses.  Instead of accepting the offer, Martinez lawyer filed suit and obtained a money judgment in excess of $165,000.

Martinez filed suit because she had CT scans, doctor visits, X-rays, and a host of medical problems, that she could not afford. Allstate's $15,000 offer did not cover her medical expenses, much less her pain and suffering, time lost from work, and/or the emotional anguish of not knowing whether she could afford her treatment.

This tactic is part of a strategy insurance companies are using to make themselves billions of dollars. CNN's year-and-a-half investigation into the insurance industry found that if you are injured in a minor accident, major insurance companies will likely challenge your claim, drag you into court, and take years before making you an offer. This offer is often significantly less than your claim is worth.

Industry insiders say this results in 80% to 90% of injured victims accepting what the insurance company offers instead of fighting.

Why would an insurance company, especially one that you trust and have given significant amounts of money to over the years to take care of you in the event you're injured, act with such reckless disregard toward your personal well-being? The answer is simple: Insurance companies make more money if they pay you less money for your injuries, even if you need the money to cover necessary medical bills, lost wages, and rehabilitation.

According to Jeff Stempel, Nevada insurance law professor, accident victims are getting hurt further by being dragged into court by insurance companies. Other policyholders aren't seeing any benefit, such as reduced premiums, when Allstate or State Farm takes someone who needs money for their injuries to court. This practice isn't saving the consumer money at all. In  fact, the only real beneficiary of keeping money from the people who need it are the insurance companies themselves. Professor Stempel says, “To continue this kind of program is, in my view, institutionalized bad faith.” These insurance  companies seem to believe their money is better spent dragging someone hurt who needs insurance money for their injuries through court instead of helping them pay their bills.

Both Allstate and State Farm would not discuss the investigation's results with CNN.

Jim Mathis, a former insurance company insider, told CNN, “As long as the public allows this to occur, insurance companies will get richer, and people will not get a fair and reasonable settlement. Period.”

The math behind the insurance companies' strategy is simple: Take $1,000 off of 1 million claims and you've essentially made $1 billion. Do this with every claim over a number of years and you've made billions of dollars.

Insurance companies achieve this cost cutting through a process known as the “Three Ds:”

Deny the claim.
Delay the claim.
Defend their denial of the claim.

By forcing “smaller, walk-away settlements,” which are take-it-or-leave-it offers years after the actual accident occurred, battles have already been fought, bills have added up, and people are afraid that they won't get any money for their claims, insurance companies can essentially force an  injured victim to accept whatever it is they're offering. This tactic preys on the fear of a car accident victim who wonders if they're ever going to get any money for their accident.

One Indianapolis superior court judge told CNN that many insurance company lawyers have confided in him that they want to settle many of these minor impact cases, but the insurance companies won't allow it. The insurance companies would rather fight every claim, even though that means not giving their paying customers the money they need to heal and get back to their lives.

A lawyer for Allstate said that the company's strategy was to drive lawyers who represent victims out of the insurance industry. The company tried to accomplish this by making the act of fighting a claim “so  expensive and so time consuming that lawyers would start refusing to help clients.”

The Law Office of Robert Lee Hamilton refuses to stop helping people fight against unfair insurance companies. We will fight for you against any corporation that puts profits over people. Call our law firm today, we want to help.

Source: Insurance companies fight paying billions in claims, published 02/07/07 on Anderson Cooper 360 Blog. Accessed 02/08/07 via

Attorney Robert Hamilton

My name is Robert Lee Hamilton and I'm a California DUI, Criminal Defense, Personal Injury and Landlord-Tenant Lawyer.