Articles
Understanding The Insurance Company
It is necessary to know a bit about the opposition in a claim for personal injury, death, or property damage. This means being aware of the basic nature of an insurance company and the motivation of its adjuster. After all, you will be engaged, like it or not, in a type of competition where the prize at the end of the game will be who gets the money.
First and foremost, it does not matter whether the insurance company is your own or someone else's. Keep in mind at all times no matter what you may have been told by your insurance agent, a family member, neighbor or friend connected with the insurance industry, seen on TV, or read in insurance company advertisements, when you make a claim, the company is not on your side. Politeness aside, this is a reality. To think otherwise is naive to the extreme. This does not mean you are at war. Not yet anyway. War is what you get if a lawsuit must be filed because negotiations fail to resolve the claim. It does mean you are in competition. It is your opposition! Your interests and those of the insurance company are exactly opposite. The insurance company wants to pay you as little as possible to settle and close the claim. You want to get the best deal possible for your damage or loss. These objectives are at opposite ends on the stick of self interest. The insurance company will look after its end and you must do the same for yours. This is often impossible to accomplish without the assistance of an attorney who works for you and owes allegiance to you.
An insurance company is organized to pay for its continuing existence and to make nice profits for its stockholders. The bigger profits the better! It takes premium dollars with one hand and pays out as little as possible on claims with the other. It is a matter of simple arithmetic. The less paid out, the bigger the gain. Get the picture? Nothing wrong with that! After all we all like to make as much money as we can at what we do. We try to figure all the angles to maximize profits. We look for the best, fastest and most advantageous way to accomplish this goal. An insurance company is no different. It will be good at it! It constantly trains its employees to do a better and better job. Have no doubts, the process is big business in the extreme!
An insurance company is not a charitable organization. It does not have a heart! It has a bank account along with an annual profit and loss statement. When a claim is made the person making it is not identified as an individual. The claim is given an identification called a "claim number." This is how for all time the person making the claim will be known to the company. Not as a person, but by a claim number.
To the insurance company, the claim represents a potential hole in its corporate pocket. In its view the hole must be sewn up by whatever lawful means as quickly and cheaply as possible to avoid reflecting badly on the annual profit and loss statement. Though you may perceive you are being treated with kindness, understanding and sympathy, do not be put to sleep. Other than pure civil behavior, it does not mean a thing. In the end the question is still about money - nothing more, nothing less. Do not forget it. The insurance company must always be aware of the bottom line. It never forgets it!
In handling claims an insurance company does only that which has to be done as it sees the situation and then only when the law compels it. An insurance company does not exist to do what is "right" in a moral sense. In a competitive struggle there are too many different opinions as to what constitutes "right." The word simply has no real meaning. Contrary to popular myth, "right" and "lawful" in the world of adjusting insurance claims are not necessarily the same things at all. Decisions are made by an understanding of what is lawful and who has the best potential leverage not by some hazy concept of "right." It is nice when the end result seems to make the two come to the same thing, but the real standard is more a matter of what can we get away with to save our money and still be legal.
Having made these comments, do not get the impression insurance companies serve no valid purpose in our society. To the contrary, they do serve a great purpose! Volumes have been written that more than justify their purpose. Some justifications are serious and others just plain funny.
In the final analysis however, if it were not for them, people would suffer losses which in many instances would be financially unbearable and otherwise completely ruinous. Upon arising from our beds each morning, we should reverently face East, kneel in the direction of the sunrise and bow our head to give true thanks for their existence since, incidentally, it is where most home offices of the larger companies are located.
In this society we need them. They need us to pay them premiums and we need them to pay loses. We feed on each other! The trick is not to be eaten whole by them when it comes time to make a claim! In most cases this requires the assistance of an attorney.
The average person is at a big disadvantage when dealing with an adjuster on the subject of loss. After all, the insurance company trains its adjusters extensively and constantly. In addition they gain experience with each claim they handle. Some of them have handled literally thousands of claims. The average person may never have more than one or two claims in a lifetime. Even if the adjuster does not know all the tricks of the trade, he usually knows more than the average person making the claim and he will have the backing of a knowledgeable claims supervisor, and if necessary a bank of high paid lawyers to help.
The situation is akin to a local fellow in the old days agreeing to get into a boxing ring with a traveling prize fighter who offers money to go three rounds with him. The outcome is almost a predetermined certainty. In most cases the pro will come off better in the end. No contest worth winning was ever won by letting things just happen. It is a good idea to have some basic insight into the adjuster's position and general method of operation. Understand in a general way what stimulates him and his company. After all, the money prize is there if you can take it! It makes sense to have a champion of your own to improve your chances in the contest. An Attorney is that champion!
