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Why do insurance companies fight valid claims?

On Behalf of | Jan 26, 2022 | Motor Vehicle Accidents

You know a car crash can be expensive, but it’s easy to underestimate the impact of a wreck until you experience one yourself. All it takes is someone distracted by their phone running a red light to completely change your life.

Since you pay for insurance, you expect to be able to make a quick claim to cover all of the costs related to the wreck. However, many insurance claims get rejected, while other people receive less compensation than they need based on their losses.

Why would insurance companies try to refuse appropriate and valid claims?

Most businesses put profit above all else

The insurance industry exists to protect people from liability, but the businesses themselves exist to generate profit. They make less money when they need to make large payments after a major crash, which means that they have a financial interest in paying as little as possible or denying claims if they can get away with it.

There are both federal and state laws that create rules against bad faith insurance practices, like denying a valid claim. Offering a low-ball settlement when the company knows that someone won’t have enough money to cover their costs is another example of bad faith insurance.

Instead of making a settlement offer based on the severity of someone’s injuries and the amount of coverage available, the insurance company tries to pay out the least amount that they possibly can. If you aren’t ready to counter aggressive negotiation tactics and you don’t know your rights, the adjuster managing your claim might try to steamroll you into accepting far less than you deserve.

How do you handle aggressive insurance tactics?

There are numerous ways that insurance companies will try to limit what they pay you. They might ask you for a recorded statement and then try to trick you into admitting fault or just apologizing. They might stonewall, refusing to communicate with third parties like mechanics about the costs for your claim.

If you want to protect yourself against these tactics, you need to know your rights and be ready to negotiate. If the insurance company won’t fulfill their obligations to you as someone hurt in a covered crash, then you may need to take them to court in extreme cases. Knowing your rights and the laws that protect you after a car crash can help you recover the losses you have suffered.