When you file an insurance claim, you expect a fair and timely settlement. However, insurance companies often use various tactics to minimize payouts and maximize their profits. Understanding these insurance tactics is crucial to ensuring you get the compensation you deserve. This article will walk you through common strategies insurers use—such as delays, lowball offers, and counteroffers—and how to counteract them effectively.
Understanding Insurance Tactics
Insurance companies operate as businesses, and their primary goal is to protect their bottom line. This often means employing strategies that can frustrate claimants and push them into accepting less than what they deserve. Here are the most common tactics they use:
1. Delays in Processing Your Claim
One of the most common insurance tactics is delaying your claim. The longer they take to process your claim, the more pressure you feel to settle for less, especially if you’re struggling with financial burdens related to medical expenses, lost wages, or property damage repairs.
Why do insurance companies delay claims?
- They hope you will give up or forget about the claim.
- They expect financial strain to push you into accepting a lower settlement.
- They use delays to investigate every possible reason to deny or reduce your claim.
How to deal with claim delays:
- Keep detailed records of all communication with your insurance company.
- Follow up regularly via email and certified mail to create a paper trail.
- Know the deadlines in your state for claim processing and respond quickly to any requests for documentation.
- If delays persist, consult an attorney or file a complaint with your state’s insurance regulatory agency.
2. Lowball Settlement Offers
After waiting weeks (or even months), you may finally receive an offer—only to find that it’s far lower than expected. This is another classic insurance company strategy. They count on you being desperate enough to accept a lower offer rather than negotiating.
Why do insurance companies make lowball offers?
- They assume many claimants lack the knowledge or patience to negotiate.
- They want to close claims quickly and cheaply.
- They hope to settle before you consult a lawyer.
How to respond to a lowball offer:
- Never accept the first offer without reviewing it in detail.
- Request a written explanation of how they calculated the settlement.
- Gather evidence, including repair estimates, medical bills, and expert opinions, to justify your counteroffer.
- Politely but firmly reject the lowball offer and submit a counteroffer with supporting documentation.
3. Counteroffers and Negotiation Tactics
If you reject the initial offer, expect the insurer to come back with a slightly higher—but still inadequate—offer. This back-and-forth is part of their negotiation strategy.
How to handle counteroffers:
- Have a clear minimum settlement amount in mind based on your actual damages.
- Stick to facts and figures rather than emotions.
- If negotiations stall, consider mediation, arbitration, or legal action.
Additional Insurance Tactics to Watch For
1. Denying Liability
Sometimes insurers outright deny responsibility for paying a claim, arguing that their policyholder wasn’t at fault. They may use vague policy language or misinterpret coverage details to justify this.
What to do:
- Review your policy carefully and compare it to their reasoning.
- Provide strong evidence like accident reports, photos, or witness statements.
- Consult a lawyer if the denial seems unjustified.
2. Requesting Excessive Documentation
Insurers may ask for extensive documentation to wear you down. While some paperwork is necessary, excessive requests can be a delay tactic.
What to do:
- Ask why each document is necessary and how it will affect your claim.
- Provide requested information promptly but avoid unnecessary disclosures.
- Keep copies of everything you send.
3. Disputing Medical Treatment Costs
If your claim involves injuries, insurers may argue that your medical expenses are too high or that certain treatments weren’t necessary.
What to do:
- Keep detailed records of all treatments and medical bills.
- Get statements from your doctors explaining why treatments were needed.
- Challenge their assessment with expert opinions if necessary.
FAQs About Dealing With Insurance Tactics
Q1: Can I negotiate with my insurance company without a lawyer?
Yes, you can negotiate on your own, but having an attorney can strengthen your position, especially if the insurer is being particularly difficult.
Q2: How long does an insurance company have to settle a claim?
It varies by state, but most states have laws requiring insurance companies to respond within a certain timeframe. Check your state’s insurance regulations.
Q3: What should I do if my claim is denied?
- Request a detailed explanation in writing.
- Gather evidence to counter their reasons.
- File an appeal or seek legal advice.
Q4: Can an insurance company revoke an offer after making it?
Yes, in some cases, insurers can withdraw an offer if it hasn’t been formally accepted. That’s why it’s essential to respond promptly.
Q5: What if my insurance company refuses to negotiate?
If negotiations fail, you may need to file a complaint with your state’s insurance department or consider legal action.
Conclusion
Dealing with insurance tactics like delays, lowball offers, and counteroffers can be frustrating, but knowing how to respond puts you in a stronger position. Keep detailed records, stay persistent, and don’t be afraid to challenge unfair settlements. If you feel overwhelmed, consulting an attorney can help you navigate the process and ensure you get the compensation you rightfully deserve.
By staying informed and proactive, you can counter these insurance strategies and secure a fair settlement for your claim.
