How do adjusters evaluate auto accident claims?

If you are in the settlement stages of an auto accident, personal injury claim, and are unhappy with your lawyer — because the insurance company’s settlement offer seems very low — please don’t blame the attorney. Based on the past — and from what you’ve likely heard from friends — your disappointment is understandable, and here’s why:

At one time in California, no matter how little the repair charges were, if repairs were even needed — you could count on some type of a settlement. Simply claim injury, obtain treatment from your family doctor, physical therapist, or chiropractor and hire a lawyer.

While always considered a source of “easy money for a few phone calls,” beginning in 1979, for lawyers, automobile insurance companies became cash cows on steroids. Adjusters were under strict instructions: Whatever you do, get claims settled, so that we are not sued for bad faith.

For almost 10 years claims were over-paid by staggering amounts, making millionaires of doctors, physical therapists, chiropractors and lawyers. Abuse was rampant, lengthy and over-treatment common, with physical therapy and chiropractic bills routinely over $10,000.

The party ended in 1988 when the California courts declared an end to third-party bad faith. Many lawyers — fresh out of law school and paid scandalously high incomes in personal injury law firms — found themselves out of a job.

Of course, you know who paid for the feeding frenzy though sky high insurance premiums.

‘I won the lottery notion still is very much alive’

“Even though settlement amounts returned to Earth years ago, there is still this notion of having won the lottery if you are in an auto accident,” You and the Law was told by “Kathryn,” a claims supervisor with a major, California-based insurance company.

“Years ago you could expect the average claim to settle for at least three times the medical bills in addition to lost wages, regardless of how severe the impact was. Today, we closely examine property damage, asking, ‘was there an impact that justifies claimed injury and treatment? Does the property damage lead to a conclusion that someone could be injured in this collision?'”

Kathryn points out that, “New electronic technology — camera and blind-spot avoidance systems, for example — is very expensive, which yields a high repair bill when relatively little physical damage has occurred to the vehicle. In these situations, many insurance companies will send a letter advising that a claim for personal injury will be denied,” she stressed.

Protect yourself from being hit with huge unpaid bills

“Dennis, I would like your readers to understand that our accepting the claim does not mean that they hit the jackpot. We will not pay for a massage every week, or to be seen by your chiropractor or physical therapist for as long as their office wants you to.”

To prevent from being hit with thousands of dollars in unpaid bills, please:

1. Find out their per visit charge and how long does it appear that treatment will be necessary?
2. Give this information to the adjuster, who will tell you what the company will pay per visit and the typical length of care they accept for your type of an injury.
3. In a moderate-impact accident with soft-tissue injury, no more than two to three months of chiropractic care would be reasonable to most adjusters with per visit charges not exceeding $125.

Forget three times the bills

“Today, in a typical soft-tissue case – with real property damage – most adjusters have the authority to settle for 1 ½ to 2 times the reasonable medical/treatment bills. We look at actual treatment, and some companies do not include X-ray/MRI charges in their settlement value analysis. On top of medicals, provable wage loss is factored in.

“If medical bills were paid completely or in part by auto or other insurance, it is likely that you will have to reimburse all or part of what was paid. The reality of today’s settlements often makes it difficult to find a good attorney to take your case, because after paying attorney fees, it is difficult to justify legal representation,” Kathryn, an adjuster for 15 years and a real credit to her company, concluded.

Why lawyers might reject your case

“As a lawyer, I have a duty to not make your situation worse because you hired me for your relatively minor injury case,” Fresno-based Misty, an attorney with 35 years of experience, told us.

“That is the reality today with cases which, years ago were our bread and butter, when decent settlements were easy. Be careful of ‘personal injury mills’ who advertise heavily on television and will take anything, looking for a quick settlement that is in their interest, not your’s.

“If you are rejected by good law firms, my advice is to handle the matter yourself.”

We agree.