Legal Guide

5 of the Worst Things Insurance Companies Do

Everyone needs insurance. If you drive, you need car insurance. You might require less or more, depending on your state’s laws.

If you own a home, you require homeowner’s insurance, while if you’re a business owner, you need various insurance types for that. You might want life insurance as well.

You can look at insurance as a necessary evil because the more you deal with insurance companies, the more you realize how heartless some of their tactics are. There are many sneaky things they do. They’re all legal, but you might look at some of them and feel like they’re less than ethical.

Let’s examine a few of the worst things that insurance companies do. All of these violate no laws, but you’ll probably agree they’re underhanded.

They Call You Immediately After an Accident

For this article, let’s say you’re dealing with a car insurance company. You got in a wreck, and now you’re talking to both your insurance company and also the other driver’s insurance.

You should understand that these insurance companies are for-profit entities. Even ones like USAA, which emphasizes its admirable military connections, is a for-profit company. Their CEO just got a $1.3 million raise.

One thing an insurance company will do is to call and start pestering you immediately after an accident occurred. You might be in the hospital, still trying to ascertain your injury extent. You might be in pain, confused, and groggy.

The insurance company likely won’t care about any of that. You might field calls from the other driver’s insurance company while you’re still there in the hospital. You could be disoriented and on pain medication at this point.

The insurance company definitely wants to take advantage of your confused state. Put them off, and don’t commit to anything. You’re not in a position to make a rational decision, so don’t let them bully you.

They’ll Deny Your Claim

The next thing an insurance company might do is deny your claim. Even if it’s clear to you that it was entirely the other driver’s fault, the insurance company might come up with some ludicrous explanation as to why that’s not the case.

That’s not illegal, though it might seem unethical. The insurance company is probably counting on you not wanting to take them to court because you’ll probably think it’s too much trouble.

Most people do. They agree to take lowball settlement offers because they don’t want to go through with hiring a lawyer and taking time out from their lives to pursue a lawsuit.

They’ll Demand a Statement Right After the Accident

The insurance company will probably call you or send someone over very quickly after the accident. They will demand that you give an oral statement that they record, or else that you give them a written explanation of what took place.

You are not under any legal obligation to do that, especially right afterward, while you’re still trying to put the pieces back together. You can politely tell the insurance company rep or claims adjuster that you’d like to consult a lawyer first. They might grumble about it, but you have the legal right to do it, and you should.

They’ll Delay the Claim Payment

They might also try to delay the claim payment for as long as possible, even if there is overwhelming evidence that the crash happened like you said it did. The longer they have the money, and you don’t, the better it is for them.

They’ll say they’re still processing the claim or that they are still collecting information. They might seem to have endless excuses.

That’s when you need to contact a lawyer and go after the company aggressively. If your lawyer has a solid reputation, that will scare them. They will probably hand the check over much faster if your attorney threatens to sue them.

They’ll Use Algorithms to Determine How Much Money to Give You

One more thing some insurance companies try to do is to use computer programs or bizarre algorithms to figure out how much money to give you. They might type in what injuries you have, and the computer will spit out a number.

That number could be way off base, though. No two accidents or claims are exactly alike. If you get a lawyer, you can dispute what they say your claim is worth, especially if you know there’s no way the money they’re proposing to give you will cover all your medical bills.

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