If you are injured in a car accident involving an at-fault driver the driver’s insurance company will handle your claim.  Although the insurance company does not represent your interests, the company has an obligation to negotiate a settlement of the claim in good faith.  While a person injured because of the negligent conduct of another will almost always recover more with the benefit of legal representation, many people try to handle small property damage claims on their own.  If you are considering representing yourself, you must be able to distinguish legitimate adjustment and negotiation practices by an insurance company from bad faith tactics.  Since the representative that injury victims will be dealing with most directly and extensively is an adjuster from the negligent party’s insurance company, an understanding of the adjuster’s role is essential. 

Claims adjusters are employees of the insurer who have the following job duties:

  • Investigate claims by reviewing the circumstances of the incident/accident and the claimant’s injuries
  • Assess liability for the incident
  • Assess damages
  • Determine the appropriate settlement range
  • Extending offers of settlement

Many adjusters have few limits in terms of the types of tactics they will use to reduce the amount paid out on claims.  Adjusters receive special training in “claim evaluation techniques” with description of the educational curriculum essentially amounting to “denying claims and minimizing any payout.”  Even when insurance adjusters are compelled to actually negotiate because their insured is almost undeniably at-fault, the adjuster will still look to minimize the value of an injury victim’s damages.  Even if the adjuster seems friendly and helpful, this employee of the insurance company is not on your side.  The objective of this individual is to mitigate the liability of the insurance company.

When the adjuster does not engage in good faith, the insurance company might be liable for attorney fees, court costs, and punitive damages, depending on the facts and circumstances.  Insurance companies across the U.S. are ordered to pay millions upon millions of dollars annually by courts for bad faith practices.  Bad faith negotiation of a third-party claim typically involves denying a claim without a reasonable basis.  Another common form of bad faith negotiating involves refusal to settle a claim for the policy limits when given an opportunity to do so.  While the specific tactics amounting to bad faith will depend on statutory authority and the case law of your state, laws typically require insurers to have systems and standards that guide an adjuster’s evaluation of car accident claims. 

Common examples of conduct that is considered a bad faith practice in most states include:

  • Denying a claim without conducting a reasonable investigation
  • Failing to pay or deny a claim within a reasonable time
  • Failing to explain in writing the basis of a claim denial

If you are involved in settling a claim with a negligent driver’s insurance company, you also should understand the meaning of the term “reserve amount.”  This term refers to the maximum monetary amount the insurance carrier has set aside for settlement of a claim.  Insurance companies rely on insurance programs to calculate the estimated maximum and minimum settlement value of a claim.  The maximum amount is set aside by the insurance company.  These amounts are calculated based on thousands of prior settlements and the specific facts and circumstances of the claim. Adjusters who negotiate more claims close to the minimum amount save their company more money, so negotiating amounts closest to the minimum amount over many claims result in promotions and positive job evaluations.  In some cases, insurance companies have even been known to provide bonuses and other compensation to reward adjusters who deny and underpay a disproportionate number of claims.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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