Car accidents are expensive. In 2012, the average auto liability claim for property damage was $3,073 and for bodily injury was $14,653. These are only averages, however, and all claims are different depending on the degree of damage and injury. Additionally the Centers for Disease Control and Prevention has stated that the cost of medical care and productivity losses associated with car accidents is over $99 billion a year.
If you are in a minor-impact crash will your car insurance company pay for your medical bills, lost wages, and other damages? Will the other guy’s insurance company fairly pay you for your injuries. Even if the accident was not your fault, the answer most likely is no. This article discusses some of the computerized tools the insurance industry utilizes to minimize payment of your legitimate claims.
Minor-impact crashes are accidents categorized by insurance companies where the damage to the vehicle is minimal and/ or cannot necessarily be seen by the naked eye. In some instances these are the very type of cases in which victims may seek to represent themselves. But car insurance companies have adopted a take-it-or-leave-it strategy with these cases. As part of this strategy, car insurance companies offer customers a minor settlement, sometimes as low as a few hundred dollars. Accident victims who are unwilling to accept these minimal offers may only have the option of hiring an attorney and battle the insurance company in court.
It is well known that insurance companies try to prevent claimants from maximizing their claims, be it medical, wage loss, property damage, or injury. Overall, insurance companies’ strategy includes three D’s: deny a claim, delay settlement of the claim, and defend against the claim in court. The ultimate goal of this policy is to force injured parties to take a low offer and if they refuse then to make fighting the insurance company so expensive and so time-consuming that, at least for smaller claims, even lawyers would have to start refusing to help injured personal injury victims if it were just too expensive to bring smaller cases to court.
In addition to this strategy, it is well known that insurance companies use computer software programs to “calculate” the settlement value of minor or moderate car accident injury claims. One such system, known as Colossus, is believed to be used by Aetna, Allstate, Farmers, MetLife, Travelers, and USAA. However, neither insurance companies nor the designer of Colossus will reveal much about the program and how it is used. Some general information has been discussed by former adjusters for these companies. This information reveals that the program determines a settlement amount based on factors such as a victim’s injuries, the history of the lawyer involved, and location of the accident.
CNN has conducted an eighteen month investigation into these insurance practices and uncovered stories of individuals who experienced this practice firsthand. Also, CNN discovered evidence that insurance companies have reaped a profit from these practices while policyholders’ premiums continue to rise.
In the end, car insurance companies are businesses. Their primary goal is to make a profit. The public must, in the aftermath of an accident, be aware that an insurance company refusing to pay for your expenses is what you can expect.
Stuart A. Carpey, who has been practicing as an attorney since 1987, focuses his practice on complex civil litigation which includes representing injured individuals in a vast array of personal injury cases.