When you’re injured in a car accident, or another type of accident, the last thing you want is to battle an insurance company for fair compensation. You assume they’ll do the right thing and cover your medical bills, lost wages, and damages. But here’s the harsh truth: you need to know how insurance companies trick victims into low settlements.
Insurance companies are businesses, and their primary goal is to protect their profits—not accident victims. They use sneaky tactics to trick you into accepting a lowball settlement, leaving you struggling with unpaid bills and long-term financial stress.
This is why most people prefer hiring a car accident attorney to protect their rights, ensuring they don’t get scammed by insurance companies. Moreover, car accident victims already have emotional trauma to cope with. The last thing they need is legal complications.
Legal Protections Against Insurance Bad Faith Practices
Insurance companies have a legal duty to act in good faith when handling claims. When they fail to do so, they can be held accountable under insurance bad faith laws that regulate settlement negotiations. Many states have statutory provisions and common law precedents that penalize insurers for unfair settlement practices.
Key Statutes Governing Insurance Bad Faith
- Unfair Claims Settlement Practices Act (UCSPA) – This model law, adopted in various forms by many states, prohibits insurers from engaging in deceptive and unfair settlement tactics. It requires insurers to promptly investigate claims and offer fair settlements when liability is clear.
- California Insurance Code § 790.03(h) – This law prohibits unfair claims practices such as knowingly misrepresenting facts, failing to acknowledge and act on claims promptly, and offering unreasonably low settlements.
- Florida Statutes § 624.155 – Under this provision, policyholders can file a civil action against insurers that engage in bad faith practices, such as failing to settle when they could and should have done so under fair circumstances.
- Nevada Revised Statutes (NRS) § 686A.310 – This statute outlines specific unfair claims settlement practices, such as misrepresenting policy provisions and delaying claim payments without a reasonable basis.
Case Law: Courts Penalizing Insurers for Unfair Practices
- Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809 (1979) – The California Supreme Court ruled that an insurer’s refusal to investigate a claim properly and delay payment constituted bad faith, resulting in punitive damages against the insurer.
- Zilisch v. State Farm, 196 Ariz. 234 (2000) – The Arizona Supreme Court found that State Farm acted in bad faith by delaying claim payments and attempting to settle for an unreasonably low amount despite clear evidence of liability.
- Johnson v. Farmers Ins. Co., 117 P.3d 52 (Okla. 2004) – The court held that an insurer’s repeated lowball settlement offers and failure to negotiate in good faith warranted punitive damages.
- Campbell v. State Farm, 538 U.S. 408 (2003) – The U.S. Supreme Court upheld a bad faith verdict against State Farm, emphasizing that insurers must act fairly and reasonably in their dealings with policyholders.
Common Tricks Insurance Companies Use to Minimize Payouts
Before you speak with an insurance adjuster for your personal injury cases, learn how these companies manipulate injury victims and how you can fight back to get the compensation you truly deserve.
1. The Quick, Lowball Settlement Offer
Have you ever received a settlement offer right after an accident? It might seem like they’re looking out for you, but in reality, they’re hoping you’ll accept a low payout before you know the full extent of your injuries. Accepting a quick settlement could mean losing out on thousands of dollars in medical expenses and long-term care.
Example: A driver rear-ends your vehicle at a stoplight, and their insurance company quickly offers $2,000 to cover immediate medical costs.
However, a few weeks later, you experience severe neck pain requiring months of physical therapy. Since you already accepted the settlement, you cannot recover additional compensation for these ongoing medical expenses.
2. Downplaying Your Injuries
Insurance adjusters will often argue that your injuries aren’t as serious as you claim. They may even suggest that your need for medical treatment is exaggerated. Without the support of medical experts, they’ll try to convince you that minimal compensation is sufficient. They might also try to use the myths related to catastrophic injury lawsuits to convince victims of a lower payout.
Tactic Used: Insurance companies may send you to their own medical expert, who downplays the severity of your injuries to justify a lower payout.
3. Using Your Own Words Against You
The moment an insurance representative asks for a recorded statement, beware. They will ask leading questions designed to get you to admit partial fault or downplay your injuries. One misstep in wording, and they’ll twist your statement to reduce their payout—or even deny your claim entirely.
Example: If you casually mention you’re “feeling okay” during a call, they may use this as evidence that your injuries are not severe, even if you’re still undergoing treatment.
How Insurance Adjusters Manipulate the Claims Process
Insurance claims can be valuable for victims but costly for insurance companies. Therefore, adjusters use deceptive tactics to pressure victims into low settlements.
1. Dragging Out the Process to Wear You Down
Do you feel like the insurance company is ignoring you? That’s on purpose. Delays are a tactic used to frustrate victims into accepting a lower settlement out of desperation. They’ll claim they need more paperwork, or they’ll take weeks to respond—hoping you’ll just give up.
Why They Do It: The longer they delay, the more likely you are to settle for less just to move on, especially if medical bills and lost wages are piling up. If you have a previous accident with a similar case, the complications can increase even more.
2. Digging Through Your Social Media Accounts
Think your social media is private? Think again. Insurance companies monitor accident victims to find anything they can use to undermine their claims. A simple photo of you at a family gathering could be twisted into “proof” that you’re not as injured as you claim to be.
What to Do: Avoid posting on social media until your case is resolved, and ask friends and family not to tag you in posts.
3. Hiding Evidence of Liability
Some insurance adjusters will conveniently “lose” key evidence or misinterpret reports to shift blame. If they can make it seem like you were at fault, they can avoid paying what they owe you. In other cases, they might even deny basic items such as medicines if they find a loophole.
Example: A company may argue that there was no clear proof of their insured driver’s negligence, even if dashcam footage exists. Having an experienced attorney ensures evidence is properly gathered and used in your favor.
Tricks Insurance Companies Use to Reduce Settlements
Here are some additional things that an insurance company might use to reduce the possible payout from such cases.
1. Exploiting Policy Limits
They’ll tell you there’s no more money left because of policy limits—but they won’t tell you about other options, such as underinsured motorist coverage or third-party liability. An experienced personal injury lawyer can uncover all available compensation.
Example: If your damages exceed the at-fault driver’s policy limits, your own underinsured motorist coverage may help cover the remaining costs.
2. Denying Claims Without Justification
If your claim is denied with little explanation, don’t assume they’re right. Insurance companies often deny claims automatically, hoping victims won’t appeal or seek legal help.
3. Blaming You for the Accident
Adjusters will go out of their way to shift blame onto you. If they can shift partial blame onto you, they’ll reduce your settlement or deny your claim altogether.
Defense: Having witness statements, police reports, and accident reconstructions can counter these claims. These are simple tricks and pre-existing evidence that can support your case, preventing insurance from downplaying injuries.
How to Protect Yourself from Insurance Company Tactics
It’s necessary to learn how insurance companies trick victims into settlements. But it’s also crucial to know how to protect yourself from such attempts. Here’s what we recommend:
1. Get Immediate Medical Attention
Never delay seeing a doctor after an accident. Insurance companies will claim your injuries aren’t serious if you wait too long to seek treatment.
2. Don’t Accept the First Offer
Their first offer is never what you deserve. Always consult a personal injury attorney before accepting anything.
3. Hire an Experienced Personal Injury Lawyer
A good attorney knows the tricks insurance companies use and how to fight back. With legal representation, you stand a much better chance of getting a fair settlement that covers all your medical expenses, lost wages, and future care.
4. Say No to Recorded Statements
You have no legal obligation to provide a recorded statement to the other driver’s insurance company. Politely decline and let your lawyer handle communication.
5. Keep Detailed Records
Document everything—medical bills, accident reports, conversations with adjusters—so you have solid proof when negotiating your claim.
Don’t Let Insurance Companies Take Advantage of You—Get the Compensation You Deserve
Insurance companies are not on your side. They will use every trick in the book to pay you as little as possible. If you’ve been in an accident, you need a strong legal advocate to fight for your rights.
At Bourassa Law Group, our experienced personal injury attorneys know exactly how to handle tricky insurance adjusters. We will ensure you receive full and fair compensation for your medical expenses, lost wages, and pain and suffering.
Don’t settle for less than you deserve. Contact Bourassa Law Group today for a free consultation and let us fight for you.
1-800-870-8910