I am a believer in insurance. I recommend to all of my clients that they carry a lot of insurance. Insurance is important, because it allows us to spread and share the risk of loss so that in the event of a loss the insurance “pool of funds” will be available to pay for that loss and protect any insured individual from the cost of suffering the entire harm. That is how insurance should work at it’s best. Everyone participating pays into the fund and those unfortunate enough to suffer an unexpected loss are paid from the fund. But….
Insurance is a business. It is a very big business. All insurance carriers collect funds from premium payments. Until those funds are paid out in claims, or spent on overhead expenses, the insurance company gets to keep and invest those funds. The profits from their investments are in important part of the insurance companies’ income. To the extent that the amount of money they pay on claims plus their overhead expenses are less than the income from premium payments in investments, they create a profit for the insurance company shareholders. This is how all businesses work. All businesses exist to generate profit for their owners. That is their purpose.
With insurance companies, the less they pay in claims, the greater their profits. Thus, insurance carriers have an inherent conflict between their owners and shareholders who want to make and keep profits and their customers or claimants who expect to be treated fairly and paid up fully and promptly on claims. The less an insurance company pays on claims, the more money [PROFIT] they get to keep.
In the field of personal injury, we deal with casualty claims. Insurance carriers have, by and large, recognized that they can turn their claims departments into profit centers by refining their methods of limiting and denying claims. THEY HAVE BECOME VERY CREATIVE, AND VERY GOOD AT IT. In most cases, the insurance companies have established arbitrary standards that they never divulge to the public regarding what they will and will not pay for. If you are injured in an accident caused by their insured, they will review your medical bills and treatment records. If your doctor felt you needed a certain type of care, test or treatment, and the insurance company’s secret “standards” do not include what your doctor has done, or the amount that he has charged you, the insurance company will arbitrarily deny that portion of your claim. Some insurance companies use a computer program, called Colossus, which tells them what they should offer on your case, taking the human element out of the equation. And, if you don’t like it or agree with their assessment, what can you do about it?
In California, the law imposes on insurance companies a duty of good faith and fair dealing. The law imposes a duty that the insurance company must promptly and fairly evaluate and pay claims. Unfortunately, what is prompt and what is fair is left up to the insurance company. The insurance Commissioner for the state of California has neither the manpower, the money nor the will to become involved in each claim or instance where the insurance company has either unfairly denied a claim or unfairly evaluated the claim.
That leaves it up to you, the claimant, to deal with the insurance company claims representative who is trained to avoid paying any more on your claim then absolutely necessary. The insurance company knows that if you do not have a personal injury lawyer and are representing yourself, if you don’t like how they have handled your claim there is very little that you can do about it. That’s where your personal injury lawyer comes in.
An insurance company will pay a claim if it recognizes that the claim poses a risk that a jury may give more than the insurance company wants to pay. If an insurance company does not see a risk, they will not pay. If they do not believe that you can win, they will not pay. If they do not believe that you are wiling to take action to force them to pay more, they won’t pay more. Its as simple as that…. for them. For you, however, its not so simple. Facing down an insurance company on a matter important to you, perhaps because the accident has left you with large medical bills, loss of income, disfigurement, impairment in your ability to live and enjoy your life, is a daunting task for you…..and THEY know it. They know very well the position they place you in. But, for the insurance company, its all about the money, and keeping their profits, not what’s best for you.
Feel free to contact us, or submit your personal injury case for a free review. We value your privacy. Your submission is confidential. We do not share your information with anyone. (818) 530-1770.