Insurance Companies Don't Care About You: They Care About Your Premiums

In my article, "How Do Insurance Companies Make Money?", I go over Profit = earned premium + investment income - incurred loss - underwriting expenses.  However, it is not my intention to be that technical this time around. 

Insurance companies have many different layers, or divisions, but you as the client, or insured, interact with insurance companies on only 1-2 levels:

  1. Insurance Agent -sells varying forms of the insurance, or service.
  2. Insurance Adjuster - protects the insurance company from losing money on the service for which you paid for the insurance company to provide to you by way of a premium and insurance contract (policy). Adjusters minimize the "incurred loss" in the above equation.

As to the Insurance Agent:

It has been my experience that these professionals provide you with information on the varying types of insurance-- property, casualty, life, health, and disability. They should review the different policies they have available and the coverages which those policies provide, along with the price.  However, they are not usually legally oriented or familiar with the "back door" aspect of what they are selling.  Meaning, they are doing exactly what they are suppose to be doing, "selling insurance".  Your insurance agent will most likely refer you to the nearest consolidated insurance claims center if you were to need the service you paid for by way of an insurance claim

For example: if you were injured in an automobile wreck, lost your shingles when a storm came through, and/or the property or person you bought insurance on was damaged/injured in anyway.  Your insurance agent does not usually handle that, they refer you to a claim center with insurance adjusters. If your insurance agent is kind enough to assist you with the insurance claim procedure they still have no authority, or impact, in how the claim is resolved.

As to the Insurance Adjuster:

They are usually not in the same state as you.  If they provide you any information about your legal rights please ask them if you can record the conversation or get everything they just "counseled" you on in writing.  Insurance adjusters have not passed any state Bar requirements to be lawyers and/or offer legal advice. They work for the insurance company that makes money when it brings in more premiums that are paid by their clients than it pays out in insurance claims.  Their interest are not aligned with your interest as they are evaluated on ensuring that insurance claim payouts are minimized.

Read-One of the factors that an insurance adjuster is evaluated on for their job and them keeping it is to offer you the least amount of money possible for your injuries and/or property so that their employer, the insurance company, maximizes its profit.

Common Misconceptions I hear all the time in my office:

  • I thought they would do the right thing; (Why would you think that? Again, your insurance agent may be the kindest person in the world but that is not who you are dealing with.)
  • I have never had a problem with my insurance company the 20 years that I have had them; (How many times have you had to file an insurance claim? Oh, now the light bulb goes off.)
  • The insurance adjuster told me I didn't need to get an attorney or another appraiser; (Now why would they not want you to get an opinion other than theirs? *hear Jeopardy music*)
  • The insurance adjuster said I couldn't go see the doctor; (Why are you listening to anyone other than a doctor in regards to medical advice?)
  • I don't want to sue anybody; (80-90% of the time no law suit is filed. If one is filed it may list the negligent party but that is because insurance can't be mentioned in a trial. The insurance company is the one that actually defends any law suits you bring and pays money up to their coverage amount if a verdict is rendered.)

 All I ask is that you be informed and educated on the interest of all the parties involved and not just assume anything. 

“Knowledge is of no value unless you put it into practice.” -- Anton Chekhov

 

 

An Advantage to Downsizing: Insurance Adjusters Turned Consultants

I receive several promotional emails, flyers, and mailers everyday but for some reason last week, an idea and a promotional email caught my eye.  As insurance companies try and become even more gluttonous with profits they are stream lining their claims process by shedding the intelligent, experienced, and knowledgeable adjusters for younger, inexperienced,"read from a script" warm bodies. These seasoned adjusters that are being replaced have figured out their years of service may be valuable to their adversaries, PLAINTIFF TRIAL LAWYERS!

Maurice Kraut of Mass, LLC, formerly an insurance claims representative for Ohio Casualty and Montgomery Insurance for over 30 years, recently provided some valuable insight to our firm.  No matter whether a litigation firm negotiates first and then files suit or just files suit, they still have to interact and work with insurance adjusters that assist in the evaluation and valuation of injury claims for their respective insurance companies.  

Mr. Kraut helped evaluate our logistical approach to settling claims, settlement packages and content, and did some case reviews with us. I found his presentation to be helpful to my staff, myself, and more importantly to our clients that will reap the benefits of our improved efficiency and effectiveness. 

Maurice Kraut's website states:

"My 30 years experience in Claims Management along with specialized education and technical expertise has enabled me to achieve expert status in the following areas:

  • Bad Faith
  • Insurance Claims Handling
  • Insurance Claims Management
  • Coverage Issues
  • Liability and Damages Evaluations

I have testified in both State and Federal court cases. Please call me to discuss your case anytime."

MASS, LLC
655H Fairview Road  #350
Simpsonville, SC  29680
(864) 757-1058

 

 "Change is the essence of life.  Be willing to surrender what you are for what you could become." -- Unknown author

Insurance Claim Game: 10 Tips to Follow

I hate to reveal the secrets of personal injury litigation that help me reduce my student loan debt and feed the families of my staff.  However, I was given a second chance at life for a reason and that reason could be to educate you on not getting screwed by your insurance company or an at fault party's insurance company.

As with any legal endeavor the most important factors are the facts and circumstances surrounding the issue, or problem. Each case is different and there is no universal answer for every case. These are the most basic rules I could think of without leading you astray.

  1. Liability/Contributor to Negligence- Who? What? Where? When? and How Many?  are questions you need to identify in regards to how you incurred the damages, either personal or property, with your claim.
  2. James K. Ferrell of the Memphis Injury Law Blog gives a great 10 Step Guideline to follow after an automobile accident. No need for me to recreate the wheel. I would just replace #10 with "Call Me".
  3. Ken Dolan of Dolans.com has an article entitled "How to Win the Claim Game" for property claim tips.
  4. Pictures are worth a 1,000 words- take them of the area in question, pot hole, car wreck, broken porch, malfunctioning product, dog biting you, etc.
  5. Devil is in the Details- Do not, I repeat, DO NOT trust what insurance claims adjusters tell you. Insurance adjusters work for the insurance company. DING, DING, DING. That means they are not looking out for your interest but their employer’s interest.
  6. Yesterday, I had a client come in that had been in a rear end collision and he went to visit with the Farm Bureau adjuster for that at fault driver. The Farm Bureau adjuster offered the gentleman a check for $215.00 for ALL CLAIMS arising out of the accident.  My client was savvy enough to realize that his car alone may have more damage than $215.00 much less the Emergency Room visit, several follow up appointments with his family care doctor, and the MRI that he was sent for in regards to his neck pain.
  7. Another time, I had a client hit while exiting a school bus. The Nationwide Adjuster was looking for his parents that night and offered them $700.00 to settle his claim. My client had just gotten back from the ER and referred to an orthopedist for his leg.  I ended up getting them more than $10,000.00.
  8. Why do insurance adjusters do this? If they can get you to take a check for $215.00 now before you realize the true extent of your injuries they just saved their company tens of thousands of dollars. 
  9. Once you sign the adjuster's form you have just signed your rights away against the at fault party. Read my Can You Read? article
  10. Consult Someone that Does this for a Living- don’t ask your friend, mama, daddy, boss man, insurance adjuster for the insurance company, or Joe the Plumber. Ask someone that handles these type of cases. Reference my Do I need a Doctor, Lawyer, or Preacher articles.
           a.    When I needed to remodel my foreclosure home, I called a contractor.
           b.    When my Tahoe breaks down, I call a mechanic.
           c.    When I hurt my arm in a wreck, I consulted a doctor.
           d.    When my tooth hurts, I go to the dentist.