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A little about the theory of insurance and why we are all required to have it...on our cars, on our houses (if we have a mortgage), on our businesses...
Insurance is one of the key ingredients that fosters commerce. Insurance theory has existed in various forms and at various times throughout history. For a simple explanation, perhaps the most relevant time period in modern insurance is during the times of the Dutch Trading Guilds of the 15th and 16th centuries. They sent trading ships all over the world to deliver and bring back goods. The seas were unsettled and unknown, and natural and artificial dangers existed everywhere. The loss of a single trading ship could mean ruin for a merchant's business. By agreeing to share the potential for such a loss amongst all of the traders, the impact on any one was minimized. The mechanism for the sharing was through an agreement whereby they would all undertake to guarantee to divide equally any casualty loss between them. Hence the loss spread among a hundred merchants kept the one in business. It instilled confidence in all of the participants to engage in business more freely. The risk was minimized sufficiently enough to provide financial security and predictability. So insurance is a way for us to spread the risk among many payers. When there is a loss that devastates someone society suffers because of all the fallout. They and their families suffer ruin, become a burden on society, our taxes pay for that. Whatever business or service provided is lessened or disappears altogether, depriving the rest of us. So if we all pay a little into a reserve, then the injured party can be made whole again. That is why we have insurance. So one should never be reluctant to collect just compensation for a loss. ...More Later...
Insurance is not objectionable, the administration of it is. When equitably administered it works.
An Actuarial can predict with reasonable certainty the future losses. Simple math determines the cost per unit of insurance. To that cost should be added two items, enough for a special "catastrophic" reserve to be held for unforseen claims, and a reasonable amount for overhead and a reasonable profit.
Great Insurance Company Myths:
1. A lawyer will cost you money so you will get less than dealing with the adjuster yourself.
2. The adjuster is working on your behalf...after all he is hired by your company...right?
3. You are as able as an experienced adjuster to evaluate the true value of you case.
4. Lawyers make your rates go up...how does that happen? Why do the majority of cases involving lawyers get settled before trial? Because the insurance company knows the value of a case and what a judge or jury will make them pay. They are simply paying what they should. Lawyers don't have any special power to make an insurance company settle for more than a case is worth. The insurance industry would have us believe that the big bad lawyer made them pay more than they should have. That does not make sense. But by demonizing lawyers (not a difficult thing to do in our society) the insurance company intentionally distracts the injured party from the real issue...the value.
FAQ:
Q: I feel bad hiring a lawyer for my car accident because the adjuster has been very friendly.
Should I still hire a lawyer?
A: Yes. The adjuster is not your friend. Always remember that the adjuster’s job is to settle claims as cheaply as possible. This means if he or she can get you to take less money, he or she is doing a good job. Maybe the adjuster only gets you to take $500 less, but over the whole year, on all of the outstanding claims, that is a lot of money for the insurance company. If they can convince you not to file a claim, imagine what they save their company. The adjuster wants to get you to take less money than the claim is worth. Some adjusters play very nice in the beginning of a file. What have they got to lose? By playing your friend they know that you feel like you are suing them. If they have been nice and cooperative some folks will feel bad about it.
Q: Can I settle my car accident case without a lawyer?
A: Yes.
Q: Should I settle my car accident case without a lawyer?
A: No.
Q: Will I have more money even after I pay the lawyer?
A: The Insurance Companies say Yes. They say injured people with legal representation get, on average, three and a half times higher than those without a lawyer.
According to an internal 2003 document released by The Insurance Research Council, the majority of monies paid out for bodily harm claims were awarded to plaintiffs represented by attorneys. The data also shows that 47% of claimants represented by attorneys received 79% of all liability payouts. Insurers know these numbers well and prefer that plaintiffs do not retain attorneys for these reasons.
In 1995, Allstate produced a manual providing statistics that showed claimants who represented themselves averaged a little over $3,400 while those who were represented by attorneys averaged over $7,400, double the awards given to those without attorneys. Even after legal fees are deducted, represented claimants still fare better than those without attorneys. Depending on other factors, including the extent of any injuries, the loss of wages, the length of treatment, you may have a right to much more money than the insurance company is offering.
Q: Do I have to give a recorded statement to the insurance company adjuster?
A: An insurance company adjuster will try to convince you that unless you give a recorded statement that they will not fix your car and nothing can get done. They also may say things like "It's just our policy" or "everyone has to give a recorded statement" or "I just need to record a few details". It is not wise to give recorded statements, especially not right after the accident or car wreck.
The primary reason is that you may forget to mention an injury. The insurance adjuster is relying that you will say something similar to "my neck is what really hurts" or "I've got a lot of back pain and neck pain" and the adjuster will take that as only my back or neck hurts. This can later cause problems is an ache in your knee or shoulder is something more serious. The adjuster will then say that you didn't mention your upper back pain only your neck pain so the insurance company won't pay for that.
You can give a statement that only talks about the accident and not your injuries. This is a liability only recorded statement. Often these statements are done in a lawyers office. It is usually done on cases where there is a sideswipe impact or on a failure to yield type case.
A recorded statement is always done to try and find a weakness in your case. They want to know how fast you were going or to look for some reason to blame you for the accident. An attorney will set up the claim and send the accident report to the insurance company which usually is all that is needed unless you have a more complicated car accident case.
A little about the theory of insurance and why we are all required to have it...on our cars, on our houses (if we have a mortgage), on our businesses...
Insurance is one of the key ingredients that fosters commerce. Insurance theory has existed in various forms and at various times throughout history. For a simple explanation, perhaps the most relevant time period in modern insurance is during the times of the Dutch Trading Guilds of the 15th and 16th centuries. They sent trading ships all over the world to deliver and bring back goods. The seas were unsettled and unknown, and natural and artificial dangers existed everywhere. The loss of a single trading ship could mean ruin for a merchant's business. By agreeing to share the potential for such a loss amongst all of the traders, the impact on any one was minimized. The mechanism for the sharing was through an agreement whereby they would all undertake to guarantee to divide equally any casualty loss between them. Hence the loss spread among a hundred merchants kept the one in business. It instilled confidence in all of the participants to engage in business more freely. The risk was minimized sufficiently enough to provide financial security and predictability. So insurance is a way for us to spread the risk among many payers. When there is a loss that devastates someone society suffers because of all the fallout. They and their families suffer ruin, become a burden on society, our taxes pay for that. Whatever business or service provided is lessened or disappears altogether, depriving the rest of us. So if we all pay a little into a reserve, then the injured party can be made whole again. That is why we have insurance. So one should never be reluctant to collect just compensation for a loss. ...More Later...
Insurance is not objectionable, the administration of it is. When equitably administered it works.
An Actuarial can predict with reasonable certainty the future losses. Simple math determines the cost per unit of insurance. To that cost should be added two items, enough for a special "catastrophic" reserve to be held for unforseen claims, and a reasonable amount for overhead and a reasonable profit.
Great Insurance Company Myths:
1. A lawyer will cost you money so you will get less than dealing with the adjuster yourself.
2. The adjuster is working on your behalf...after all he is hired by your company...right?
3. You are as able as an experienced adjuster to evaluate the true value of you case.
4. Lawyers make your rates go up...how does that happen? Why do the majority of cases involving lawyers get settled before trial? Because the insurance company knows the value of a case and what a judge or jury will make them pay. They are simply paying what they should. Lawyers don't have any special power to make an insurance company settle for more than a case is worth. The insurance industry would have us believe that the big bad lawyer made them pay more than they should have. That does not make sense. But by demonizing lawyers (not a difficult thing to do in our society) the insurance company intentionally distracts the injured party from the real issue...the value.
FAQ:
Q: I feel bad hiring a lawyer for my car accident because the adjuster has been very friendly.
Should I still hire a lawyer?
A: Yes. The adjuster is not your friend. Always remember that the adjuster’s job is to settle claims as cheaply as possible. This means if he or she can get you to take less money, he or she is doing a good job. Maybe the adjuster only gets you to take $500 less, but over the whole year, on all of the outstanding claims, that is a lot of money for the insurance company. If they can convince you not to file a claim, imagine what they save their company. The adjuster wants to get you to take less money than the claim is worth. Some adjusters play very nice in the beginning of a file. What have they got to lose? By playing your friend they know that you feel like you are suing them. If they have been nice and cooperative some folks will feel bad about it.
Q: Can I settle my car accident case without a lawyer?
A: Yes.
Q: Should I settle my car accident case without a lawyer?
A: No.
Q: Will I have more money even after I pay the lawyer?
A: The Insurance Companies say Yes. They say injured people with legal representation get, on average, three and a half times higher than those without a lawyer.
According to an internal 2003 document released by The Insurance Research Council, the majority of monies paid out for bodily harm claims were awarded to plaintiffs represented by attorneys. The data also shows that 47% of claimants represented by attorneys received 79% of all liability payouts. Insurers know these numbers well and prefer that plaintiffs do not retain attorneys for these reasons.
In 1995, Allstate produced a manual providing statistics that showed claimants who represented themselves averaged a little over $3,400 while those who were represented by attorneys averaged over $7,400, double the awards given to those without attorneys. Even after legal fees are deducted, represented claimants still fare better than those without attorneys. Depending on other factors, including the extent of any injuries, the loss of wages, the length of treatment, you may have a right to much more money than the insurance company is offering.
Q: Do I have to give a recorded statement to the insurance company adjuster?
A: An insurance company adjuster will try to convince you that unless you give a recorded statement that they will not fix your car and nothing can get done. They also may say things like "It's just our policy" or "everyone has to give a recorded statement" or "I just need to record a few details". It is not wise to give recorded statements, especially not right after the accident or car wreck.
The primary reason is that you may forget to mention an injury. The insurance adjuster is relying that you will say something similar to "my neck is what really hurts" or "I've got a lot of back pain and neck pain" and the adjuster will take that as only my back or neck hurts. This can later cause problems is an ache in your knee or shoulder is something more serious. The adjuster will then say that you didn't mention your upper back pain only your neck pain so the insurance company won't pay for that.
You can give a statement that only talks about the accident and not your injuries. This is a liability only recorded statement. Often these statements are done in a lawyers office. It is usually done on cases where there is a sideswipe impact or on a failure to yield type case.
A recorded statement is always done to try and find a weakness in your case. They want to know how fast you were going or to look for some reason to blame you for the accident. An attorney will set up the claim and send the accident report to the insurance company which usually is all that is needed unless you have a more complicated car accident case.
