DennisBeaverApril 26, 2008 (Original publish date) • By Dennis Beaver

This column often receives questions from readers asking about the pros and cons of handling an auto accident insurance claim by themselves, without hiring an attorney. Advice sought typically falls into these categories:

“Can I do this myself?” “Should I?” “When do I know if I am over my head and need to hire a lawyer?” “Can I get the other guy’s insurance company to help me pay bills before our case is ready to settle?” “Is it possible to simply pay a lawyer for a consultation, learn the steps that I should take and how much to ask for?”

The short answer to all of these questions is Maybe. Today, I want to shine a light onto the murky world of insurance claims practices, to help you understand just what anyone is up against in these David and Goliath struggles. Next week, You and the Law borrows a slogan from Home Depot: “You can do it — We can Help … I hope…”

Low impact or serious?

Naturally, just as all Brides are Beautiful, every auto accident case is serious for the people involved. There are, however, degrees of seriousness.

For example, if you are stopped at a red light and slightly rear-ended by an inattentive driver, resulting in a hard to see dent, this is clearly a low-impact accident. But, if the back of your car looks like an accordion, that’s serious.

“While actual property damage amounts vary, the threshold of what’s low impact has gone up dramatically. To some companies, anything less than $5,000 is low impact, especially if we’re talking about high-tech lighting devices, trunk mounted GPS, Entertainment units, or exotic paint jobs. If my company feels it is a low-impact case, we will completely deny payment for treatment — for any treatment, even if we know injury is possible,” a former claims manager for a major auto carrier admitted to me.

Why is he a former claims manager?

“It’s because I could not do this any longer. I was hurting people. If you became the perfect little Nazi and followed orders, they were happy, regardless of how blatantly unfair. When I got into this field 30 years ago, it was truly professional. But not anymore,” he said, shaking his head.

“Today, adjusters who thrive tend to be cold, heartless, and morally bankrupt. The turn-over is amazing, as anyone with a conscience cannot last long,” he added.

In an investigative piece that CNN did in 2007, household names-Allstate, State Farm and others-were found to play the “Deny, Delay, Defend Game.” Here’s how it was explained to me:

“Even when we know our guy is substantially at fault, deny liability or tell them we feel no one could be injured in this kind of an accident. If you must accept responsibility for your insured, and there is a valid injury claim, then you delay settlement hoping to wear the poor slobs on the other side down long enough so they will take much less that what you know is reasonable.”

“Finally if suit is filed, spend limitless amounts of money on your own defense attorneys to send a message to the plaintiff’s lawyer: You will regret the day your client didn’t accept our first offer, because taking us on is going to cost ya, pal,” stated my retired claims adjuster friend.

What about bad faith?

Because of lobbying by the Insurance Industry, there is no such thing in California as Third Party Bad Faith, as this column has discussed in the past. Practically speaking, this has left auto insurance companies free to act in bad faith, making it not profitable for most lawyers to get involved in a typical, not terribly serious case. Here’s why:

“Once a settlement offer is announced, field adjusters have virtually no authority to increase it by more than a few dollars. We use sophisticated computer programs, not in an effort to fairly evaluate a claim, but to unfairly evaluate it. Offers today tend to be an insult, and even if you hire your own lawyer, that offer is generally cast in concrete,” a supervising adjuster for a major insurance company told me not long ago. You can bet I am not at liberty to reveal his name.

Have adequate insurance

If you can’t expect a fair settlement on a good case, you can still protect yourself with the right kinds of coverage, so that, regardless of what the adjuster offers, you and your occupants are going to be OK.

“Medical Payments Coverage is very inexpensive, in terms of what you get for the premium paid. $30,000 coverage per occupant costs less than $100 a year with some companies, and if you want $100,000 per person, that’s less than $200. It is a real bargain, and the insurance company is legally obligated to pay for treatment, regardless of fault.”

“Yet, you’d be surprised at just how many people decline Med Pay — many of them have no private health insurance either. It is false economy, saving a few dollars, and gambling that nothing will ever happen,” a State Farm agent told me. She is absolutely right.

Next, always have large limits of Uninsured Motorist coverage, say $50 — $100 thousand per accident. Finally, have Collision or Comprehensive coverage unless your car is truly not worth repairing. You would be surprised at the calls I get from people who are so amazingly cheap, they could have afforded, but did not purchase UM or Collision coverage. Hit by an uninsured driver, all I can do is to pass them the Kleenex.” she said.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.