CNN Reveals Why You Should Consider Hiring a Lawyer to Fight the Insurance Company

On February 7, 2007, CNN investigative reporters profiled how major insurance companies are making billions of dollars more in profits by underpaying injured car accident victims.  The money these accident victims are being denied is needed for doctor visits, lost wages and rehabilitation, the CNN report showed.  But new strategies by major insurance companies are forcing victims to accept “take-it-or-leave-it” settlements that in many instances don’t even begin to cover the victims’ accident-related expenses.

What would you do if you were driving your vehicle and another car hit you and was at fault – injuring you to the point where you could barely walk, were in severe pain, and needed doctor visits, X-rays, and rehabilitation?  Wouldn’t you expect the insurance company of the driver who hit you to pay those bills?

Roxanne Martinez of Santa Fe, New Mexico, expected them to. CNN reported that when she was hit by an SUV on the passenger side of her car, she was thrown against her driver-side window, damaging her spine. Her medical bills quickly accumulated to more than $25,000, and she believed that the insurer of the driver who hit her would pay for her injuries.

Three years later – after numerous doctor visits, CT scans, X-rays, and a host of medical problems, Roxanne was still fighting. The insurance company finally offered her $15,000, a sum that did not even cover her expenses, much less her pain, time lost from work, or the emotional anguish of not knowing whether she would be able to pay for her treatment.

This tactic is part of a strategy that ten of the top 12 auto insurance companies are using to save billions of dollars. CNN’s year-and-a-half investigation into the insurance industry showed that if you are hurt in a minor accident, insurance companies will probably challenge your claim, drag you into court, and take years before making you an offer. This offer is usually significantly less than your claim is worth.

Industry insiders told CNN that this results in 80 to 90 percent of injured victims accepting the low offers from the insurance company instead of fighting for their rightful claims.

Roxanne Martinez didn't take the low offer. She sued, and a jury awarded her $167,000 dollars. But it took three years.

CNN’s report showed that accident victims are getting hurt even more by being dragged into court by insurance companies, according to Jeff Stempel, Nevada insurance law professor. However, other policyholders aren’t receiving any benefits such as reduced premiums when the companies save money on these claims. This practice isn’t saving the consumer money at all, CNN reported. In fact, the only real beneficiary of keeping money from the people who need it are the insurance companies themselves.

Insurance companies contacted by CNN would not discuss the investigation’s results with CNN.

Jim Mathis, a former insurance company insider, told CNN, “As long as the public allows this to occur, insurance companies will get richer, and people will not get a fair and reasonable settlement. Period.”

The math behind the insurance companies’ strategy is simple: Take $1,000 off of one million claims and you’ve essentially made $1 billion. Do this with every claim over a number of years and you’ve made billions of dollars.

Insurance companies achieve this cost cutting through a process known as the “Three Ds”:

• Deny the claim.
• Delay the claim.
• Defend their denial of the claim.

In forcing “smaller, walk-away settlements,” battles have already been fought, bills have added up, and people are afraid that they won’t get any money for their claims.  This tactic preys on the fears of the car accident victim who wonders if they’re ever going to get any money whatsoever for their claim. Insurance companies can essentially force an injured victim to accept whatever it is they’re offering.

One Indianapolis superior court judge told CNN that many insurance company lawyers have confided in him that they want to settle many of these minor impact cases, but the insurance companies won’t allow them to. A lawyer for one insurance company said that the company’s strategy was to drive lawyers who represent victims out of the insurance industry. The company tried to accomplish this by making the act of fighting a claim “so expensive and so time consuming that lawyers would start refusing to help clients.”

Source: Insurance companies fight paying billions in claims, published 02/07/07 on Anderson Cooper 360 Blog. Accessed 5/22/07 via www.CNN.com