Top 10 Tricks an Insurance Company Uses to Lower Settlement Amounts

Insurance companies often employ a range of strategies to minimize payouts in car accident claims. As experienced car accident attorneys. Our lawyers represented these insurance companies once upon a time. We are well-versed in these tactics and can help you navigate them effectively. Here are some of the tricks insurance companies commonly use:

1. Quick Settlement Offers:  Insurance companies are in the business of minimizing payouts. One common tactic our lawyers see is to make a quick settlement offer shortly after the accident, often before you have completed treatment or fully understood the scope of your injuries. These early offers tend to be low, sometimes drastically so. They are designed to appeal to people who are in pain, under financial stress, or simply unaware of the potential value of their case. Accepting a settlement too early means giving up your right to seek further compensation, even if new complications arise later. Before signing anything, speak with a lawyer who can evaluate your medical records, future care needs, and all forms of damages to determine whether the offer reflects the true value of your claim.
2. Denying Liability: Some insurers may initially deny their policyholder’s liability, forcing you to prove the other driver’s fault. Does everyone have to fall for this trick?  No.  If 10% of claimants do, that is a lot more money in the insurance company’s pocket.
3. Downplaying Injuries: This is not a common strategy but an  “every single time” strategy.  Adjusters point to anything, from gaps in treatment, the absence of fractures, or relatively conservative care plans, as evidence that your injuries were “not that bad.” They will argue that your pain was temporary or that you are exaggerating its effect on your life. This is particularly common in soft tissue injury cases, where the damage is not always visible on imaging. But pain is real, and functional limitations can be just as disabling as visible wounds. We work with medical experts who understand the full impact of these injuries and can provide the documentation necessary to support your claim.
4. Using Recorded Statements: Insurers may request recorded statements that can be used against you later. We advise against providing statements without legal representation.
5. Lowball Settlement Offers: Insurance companies often offer settlements far below what your case is worth.
6. Claim Delay Tactics: Delaying claim resolution is another tactic insurers use to gain leverage. The longer they can stretch out the process, the more pressure builds on the injured party to settle. Bills pile up. Medical care becomes harder to manage. The insurance company knows that delay favors them, especially when the claimant lacks legal guidance.  That said, over our 30 years of handling these cases, you do not typically see much delay from the major insurance companies.  They move pretty quickly these days.  The bottlenecks today are more challenges in getting medical records than waiting on the insurance company to evaluate a claim.
7. Disputing Medical Treatment: Insurers may question the necessity of your medical treatments. We work with healthcare professionals to validate your treatment plan.
8. Digging into Your Past: Insurers may investigate your background to find reasons to deny your claim.
9. Contributory Negligence: Insurers may try to shift blame onto you to reduce or eliminate their payout.
10. Threatening Litigation: Some insurers use the threat of a lengthy legal battle to pressure claimants into accepting lower settlements.

The reality is that too many people try to negotiate and settle their own accident claims under a simple premise: “I’m a smart enough man/woman and I’m a good negotiator, so I should be able to do this on my own without a lawyer.” And it is not just victims that fall into this trap. This same logic trips up lawyers who try to handle accident cases without the knowledge and experience to maximize the value of the case.

You may be very smart and you may be an excellent negotiator. But the problem with this thesis is it assumes a perfect understanding of the system and laws that govern accident claims. Maryland accident law is a Byzantine system that is often counterintuitive.

Example of What Insurance Companies Do

Here’s a perfect example. Let’s say you have $50,000 in medical bills, $20,000 in future medical bills, and $35,000 in lost wages. Your medical insurance and personal injury protection paid some of your bills and you used your vacation time at work to continue to get paid. So the insurance company comes back to you and says, you have $3,000 in leftover medical bills you still owe (or paid yourself), and I think you are entitled to $200,000 in pain and suffering, so your total settlement should be $203,000.

Regardless of what he/she thinks about the $200,000, the logic at least makes sense to the victim. How can you get compensated for money that you did not actually spend? Why would the insurance company pay for bills already covered by PIP or medical insurance or lost wages that your employer paid? The reason is that the collateral source rule in Maryland says that the finder of fact (usually the jury) should not consider these things when determining the value of the case. In other words, you can still include these bills in your damages even though they have been paid.

This is an example of how counterintuitive our Maryland accident law is and why in the vast majority of cases – although not all – getting complete advice from a lawyer is the best path.

Handling Your Own Claim Not a Great Idea

If you are trying to settle your own personal injury auto accident case without a lawyer, 95% of the time, you are making a mistake, although there are a minority of cases that can and do settle on their own effectively.

If nothing else, call a lawyer to consult with them on the lay of the land of your case. Our firm offers free consultations at 800-553-8082 or online. Most other personal injury law firms do too. But do call someone experienced in handling the labyrinth of personal injury cases.

Other Personal Injury Resources

• Why You Should Hire a Lawyer in the Vast Majority of Personal Injury Cases
• Details on Settling a Personal Injury Claim(settlement information)
• How Long Should Your Personal Injury Auto Accident Take to Settle? (how quickly do auto accident cases settle?)
• Valuing Personal Injury Cases (explanation of how auto accident cases are valued)
• Sample Demand Letter (example of a demand letter)
• Sample Demand Letter #2 (another example demand letter)
• Personal Injury Victim Help Center (information for injury victims about the process)
• Whiplash Accident Claims (why we generally do not take these cases and the type of soft tissue whiplash injury cases we are willing to take)
• Personal Injury Lawyer Help Center (tools for personal injury lawyers)
• More Information? Call Miller & Zois at 800-553-8082 or get a free on-line consultation.