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How does the insurance company undervalue my claim?

Posted on: December 22, 2022

LEGALLY REVIEWED BY:
Chi Hung Nguyen
December 22, 2022

Lawyer for car accidents and insurance claim undervaluationWho has the power in insurance cases? Most of the time, it is a David versus Goliath situation when a person faces off against an insurance company that has the time, resources, money, and countless attorneys to fight its battles. Insurance claims adjusters have the power over the insurance company’s money, know it and use it to their advantage.

Insurance companies are not in a rush. Insurance adjusters also know that they usually are not gaining anything by working as fast as they can to settle a claim. They are willing to take their time to patiently fight claims if it means they do can lower how much they have to pay. After a truck accident or car accident, injured claimants face a situation they may not be very familiar with handling. But, for the insurance company, it is another day in the office. Experienced insurance adjusters have handled countless claims, both from unrepresented claimants and injured claimants that are represented by attorneys.

The mentality of insurance companies is to pay as little as possible for a claim, even if it is to show that paid the minimum. The most combative insurance adjusters see claims as challenges, and enjoy the fight and conflict.

For the typical injured claimant, this can be an uphill battle to recovery for their bodily injuries and property damage. The injured claimant is often trying to heal from stress and an emotional accident. Sometimes, recovery means days, months or even years of medical treatment that takes up their time.

The insurance company can underpay, and undervalue your claim by only recognizing and paying for a part of the claim.

For example, if the total value of the damage after a car accident is hundreds of thousands of dollars, the insurance company will try to twist the facts and evidence to say it is only worth a small fraction of that amount. It is possible that a claim for several hundreds of thousands of dollars is met with a counteroffer of a couple thousand dollars. Other times, they outright refuse to even recognize that the claim is valid.

Cherry-picking Insurance Experts

The insurance company can twist the facts by enacting one of their many tactics. One example of this is cherry-picking their experts. In a lawsuit, both sides often hire experts to help support their side of the case. For example, to prove medical treatment injuries, experienced personal injury lawyers may bring an expert doctor to show everything from how often an injured claimant needed to see a doctor because of his or her severe injuries, to how the motion of a car impacted the injured claimant.

In car accidents and truck accidents, there is often property damage to the injured claimant’s car or his or her items inside the car. This is important because the car may prevent the claimant from being able to get to work, pick up their kids, etc.

Knowing that they are trying to pay as little as possible for a property damage part of a claim, insurance companies will often offer the bare minimum to start. They hope they will frustrate an injured claimant. It often takes several attempts to go back and forth with insurance companies before they make a good offer.

On top of that, insurance companies try to use the property damage claim to undervalue a claim for bodily damages.

Insurance companies will look at a car accident that may be a relatively low-value property damage claim. Put simply, it was a fender bender or there was very little damage to the actual car. Insurance companies will try to argue there is no way an injured claimant can suffer from a lot of bodily injuries, when their car was almost perfectly fine. But this is not always factual or true. Sometimes, minor property damage can still lead to major bodily injuries as well as a high dollar settlement amount.

In one case, driver and passenger were in a small truck stopped at a light when the vehicle was struck by another car. This was not a dramatic high-speed accident, involving multiple vehicles piled onto each other. But, the passenger hit his head, lost consciousness and was in a coma for multiple months. The injured claimant in this case was charged $600,000 in medical bills after this minor accident.

Sometimes, the reason there is not a lot of property damage to a vehicle is that the cars were made up of different materials. Some vehicles have heavy-duty car bumpers. Other times, the movement of the vehicles involved in the accident cause one car to suffer very little property damage compared to the other vehicles involved.

On the other hand, a totaled car should still be evaluated for the value of the property damage suffered. The estimate from a damaged car can be used with insurance companies to evaluate the value of your claim, and ultimately, a settlement offer down the line.

Junkyard Parts Offer

Still, insurance companies have resourceful methods of underpaying for an injured claimant’s claim. Insurance companies can underestimate how much it will cost to repair and provide new parts for their Insureds’ damages. Specifically, insurance companies will turn to salvage yards or seek used car parts when trying to determine the value of your property damage claim. This means that if your damaged car needs a specific replacement part or repair, the insurance company will only offer enough money to cover the absolute base, lowest dollar amount it can get away with offering. In some instances, this means offering to provide parts that are manufactured, or made, cheaper or with lower quality.

Or, the insurance company will try to take vehicles of different makes, models, names or locations to try to underestimate the value of your insurance claim. In some cases, the parts the insurance companies consider are not originally made from the original vehicle parts maker or manufacturer. As an injured claimant, you need to take all of this into consideration.

Naturally, an injured claimant can conduct his or own investigations. An injured claimant can try to find a vehicle repair shop that will provide him or her a free property damage estimate. The injured claimant can look into local salvage yards, or body shops to see how much the parts, cost of repairs, the labor estimate, extra equipment fees, and any other costs or fees will amount to in total. Sometimes, looking into the value of similar vehicles in other advertisements can help provide a guide as to the vehicle’s damage value.

Each state has its own unique laws that apply differently, depending on the parties involved in the lawsuit, the terms of the insurance policy contract and where the accident occurred.

In some cases, insurance companies’ conduct reaches the level of bad faith. In many states, like Washington State, Oregon, Maine, Michigan, Indiana and Texas), the policyholder or person with insurance has a right to recover attorneys’ fees if the denial of coverage was a breach of contract.

Meanwhile, in states like Arizona, California, Illinois and New York, the insurance company’s client/policyholder/claimant actually has to prove that the insurance company unreasonably denied a valid claim.

Insurance Company Marketing

Outside the legal system, insurance companies also use marketing to their advantage. For example, a California insurance company ran advertisements about insurance fraud. As a result, the amount of insurance claims filed were lowered by almost half.

Technology and Software

Technology also can play an important role in how an insurance claim is valued. Many large insurance companies use software and technology to minimize their costs. Sometimes, this software is set up on purpose so that it gives a lower value for property damage.

Pushing Claimants

In some cases, insurance companies go too far and force claimants to sue for benefits for which they already have a right to have.

For example, in Richardson v. Employer’s Liability Assurance Corp., the insurance company was shown to have a motive and ability to follow through with acts that trouble the person with insurance, or claimant, by making the claimant be a part of arbitration. This led to a valid claim for bad faith.

There are many ways an insurance company can undervalue your claim. Speak with an experienced attorney to handle your car accident or truck accident claim the right way, from the beginning.

Contact an experienced personal injury lawyer 

Without experience in the insurance industry or legal experience, understanding which factors or evidence can help or hurt your case can be difficult to understand.

Are you trying to secure your financial recovery with the help of experienced attorneys? If so, we can help.

The Pusch & Nguyen Law Firm has helped countless Texans handle their insurance disputes. Our experienced trial lawyers have gone up against some of the biggest names in the insurance industry while successfully bringing home payouts for clients. Our successful reputation speaks for itself, and with offices in both Houston and San Antonio, we are well equipped to assist Texans who are in dire need of our services. Register online for a free case evaluation or call us today at 713-524-8139 (Houston) or 210-702-3000 to schedule an appointment with a member of our team.

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