Claim Settlement

Beware.  Your claim settlement may well fall below the fair value of your insurance claim.

Consider the facts.  Insurance companies are in business to make money.  Clearly there is nothing inherently wrong with this.  Profit motives only become a problem when the motives of the insurance company conflict with the interests of their insureds and claimants.

And so insurance companies have a choice between good faith insurance claim settlements and insurance bad faith claims practices.  When claim settlement practices are specifically designed to pay out the lowest amount possible, a company has likely made the choice to engage in bad faith practices.

Too frequently insurance claim settlement negotiations are not patterned to provide you with a fair settlement.  This is because too many systems are designed this way.
 
Understand that the adjuster's entire range is likely below the actual value of your claim.  If you demand more than the adjuster can deliver, approval must be granted by a higher authority.  Insurance adjusters want to avoid this.  Accordingly, when pressured, they will generally produce a slightly higher offer.  The additional amount will be designed to appear as a gesture of good faith – as if you are not really entitled to any more. 

These insurance claim settlement tactics are generally very successful.  So much so that most everyone who settles within the ranges offered are likely settling for less than the value of what the claim is worth.

Active participation in your claim is vital in order to avoid the devaluation of your insurance claim settlement.  You must focus on the obstacles that you will face in the fair advancement and settlement of your insurance claim.

The foundation of your knowledge must rest with the understanding and recognition of insurance bad faith claims practices that you are likely to encounter.

The element of time

Some insurance companies will use time tactics to attempt to devalue your claim.  You must turn time to your favor. Following are two of the most common.

First, the tactic of premature claim settlement.

The premise is elementary.  Unscrupulous insurance companies take the chance that they can persuade you to settle almost immediately after your loss.  These quick settlements take place before you have the opportunity to adequately evaluate your loss.  In short, if you are unprepared, chances are you will accept a lower settlement than what you are entitled to.

There is a clear message here.  Put time on your side.  Use the time you need to research the fair value of your loss before you agree to what is probably a lowball premature first offer.

Second, the time delay tactic. 

This practice works opposite to the premature claim settlement tactic.  In this case, you are faced with unreasonable claim delays, all designed to compel you to accept a settlement below the fair value of your insurance claim.  Whereas the premature settlement is designed to take advantage of the immediate disruption to your circumstances, the delay tactics work on the premise that time is costing you money.  Think again, is time costing you money if your insurance claim settlement is being lowballed?

If you find yourself in a position where you are embroiled in an insurance dispute, or you suspect you are the victim of insurance bad faith claim settlement tactics, the only resolution is to understand how to protect yourself.  You can begin by utilizing this basic claim advice.

The first claim settlement offer is probably not designed to be fair.

If you sense that the first offer is premature and devalued, reject it, and afford yourself the time to independently research your claim.  Your research needs to focus on the fair value of your insurance claim.  "Fair" is important.  Insurance is not to be used for profit.  Insurance is to be used to make you "whole again".

Independently researching your insurance claim means finding reputable repair professionals and seeking legitimate independent appraisals.  In the event of serious injuries, consider the benefits of consulting with a well qualified personal injury attorney.

Protecting yourself means preparing for and understanding your claim and the processes that might subject you to a further unwarranted insurance dispute.  Recognize that the insurance company will likely react to your  claim settlement rejection of a first offer with additional delay tactics.  Be persistent, and resist the unfounded fear that time lost is money lost.

• Maintain your persistence.
  You need to stay in frequent contact with your adjuster – daily if necessary.  Your adjuster is bound to share details of the progress of your claim settlement.  Refuse to tolerate unanswered calls and messages. 

• Your knowledge and acquired research will boost you way beyond those who lack that vital information.  Unfortunately, those who are unprepared are infinitely more likely to accept an insurance claim settlement that is far less than the actual value of their loss.

• Understand and invoke your rights.
  When negotiating your claim settlement with you own insurance company, read your policy, it contains your rights as well as your obligations.  In dealings with an adverse, liability insurance company, while you do not have a contractual association with them, you are nonetheless entitled to a just and honest recovery for your loss.

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