It’s a common misconception that insurance companies exist to take care of their clients and provide services to the public. Nothing could be further from the truth. Insurance companies have one and only one purpose: to make money.
To this end, they will do anything in their power to maximize their profits and limit their losses. It may sound odd, but one key factor they use in accomplishing this goal is time. That is why the insurance company mantra is “Deny. Delay. Defend.” The longer they can keep their money in their accounts, the more interest they will draw, and the longer they can stretch out settling a claim, the more likely you will be to get tired of fighting and just go away.
Deny the Claim
You would be surprised at how often even in a case as simple as a rear end collision, the insurance company will try to deny a claim. Some common tactics they use are to tell you they haven’t been able to contact the at-fault person and can’t settle or some irregularity relieves them of liability. Another is to tell you they need more documentation and that you need to provide it. Sometimes they will simply say no or make outlandish demands of the injured parties.
Delay the Claim
If the company doesn’t just outright deny your accident claim, they will most likely start using delaying tactics to stretch time. These may include having you run around and gather information and documents that they really don’t need. Or, they may say they need to schedule you for a medical exam or recorded statement, but their people are booked solid and aren’t available for weeks.
This is why it’s important to consult a personal injury attorney as soon after an incident as possible. Insurance companies have no interest in doing the right thing, and the only way to force their hand is to wrest power from them with legal action. It is only with a court order that they can be made to do anything.
Defend a Claim
There is a great deal of overlap between delaying a claim and defending a lawsuit. Don’t believe that just because you have filed suit that the insurance companies will roll over and play dead. They are entitled, under the law, to have every opportunity to defend themselves against your claim.
Larger companies today have their own, fully held, law firms. The lawyers at these firms are employees of the insurance companies and are paid to do nothing but minimize losses and protect the company’s bottom line. The fact that these firms exist tells you something about the companies’ commitment to defending their bank accounts.
Remember it is all about time and compound interest for them. They will delay the case as long as possible or until they see an advantage is settling.
Why Insurance Companies Settle
At this point, you may be asking what advantage could there be to them settling. That decision will likely come down to who your lawyer is.
Insurance companies are basically large statistical calculators. They track virtually everything that affects their business, including how lawsuits are resolved. They know what attorneys actually go to court and which will advise their clients to settle for a reduced amount.
Defending a case costs money. If you hire an attorney with a history of fighting tooth and nail for everything his clients have coming, the insurance companies are more likely to make a reasonable offer.