We recently spoke to a gentleman who had settled his personal injury case six months ago. He had been injured in an accident where the other party was clearly at fault. He was contacted early on by the other person’s insurance company.

This man had incurred about $20,000 in medical bills, most all of which have been paid by his health insurance plan from his employer. The man told me that he did not want to pay an attorney a fee because his case was “simple” and he thought he could save the attorney fee. The insurance adjuster even said some things along these lines during discussions.

The insurance adjuster asked him how much his out of pocket medical expenses were and he told them that they were pretty low since his insurance company had paid the bills. The injury victim went on to the Internet and thought that he found some “formula” for settling his case by himself. Looking at his out-of-pocket expenses and his lost wages he settled his case for around $30,000.

Now he wanted to rescind his settlement. Since he did not use an attorney he was not aware that his employer’s health insurance company might seek to be repaid the medical bills that it paid. Yes, there it was, right in his contract. Of course the adjuster from the car insurance company did not mention this to him nor did they have a duty to. The adjuster did not misrepresent anything but didn’t volunteer anything anyway. The victim had to repay his health insurance company nearly $20,000, wiping out the great bulk of his settlement.

Unfortunately there was nothing that we could do for him. He had signed an “full and final release” acknowledging that he had not relied on the insurance adjuster for any legal advice.

Insurance companies are increasingly using more tactics to increase their bottom lines and hold onto more of their money.  Due to the current economy, insurance companies are employing strategies that can harm consumers.  According to the American Association for Justice’s (AAJ) report, “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse,” the insurance industry is attempting to make money at the expense of consumers.  The report identified some of the following insurance company tricks:

1.    Denying Claims: Even some of the large insurance companies, such as Allstate, AIG, and State Farm, have been denying valid claims as a way to boost their bottom lines.  Insurers have even been known to reward employees for successfully denying claims.

2.    Delaying Until Death: Insurance companies continue to delay claims in the hopes that you will eventually give up, and many people do.

3.    Confusing Consumers: Have you ever tried to read an insurance contract?  Insurance companies regularly use agreements that are incomprehensible to consumers.

4.    Discriminating by Credit Score: Credit reports are frequently used to determine premiums and insurance approvals.  Unfortunately, with the current economic conditions, many consumers who once had good credit now have low scores.

5.    Abandoning the Sick: Policyholders who are the most vulnerable and in need of medical coverage have been the targets of insurance companies.  Some insurers have been found to offer bonuses to employees who meet “cancellation goals.”

6.    Canceling for a Call: Very few people realize that insurance companies often view a telephone inquiry about possibly making a claim the same as they do actual claims.  When it comes time to renew, some of these companies are refusing to do so based on a phone inquiry.

Do your homework before applying for an insurance policy, by getting your copy of Ben Glass’s book, The Ultimate Guide To Buying Car Insurance In Virginia.

We spoke to a very nice gentleman today who called us because he was getting extremely frustrated with the insurance adjuster. This man had been rear ended in an accident and was trying to get the case settled on his own.

One of his items of damages that he was claiming was for his lost wages. The insurance adjuster asked him “did you use your sick leave?” When the accident victim answered “yes,” the insurance adjuster then lied to him: “since you’re employer paid for your time off we don’t have to pay you.”

This was a 100% boldfaced outright lie. The days that the employee “burned from his sick leave bank” are never his to use again. Moreover, in his company sickleave that is not used can be turned to cash.

Maybe it’s the recession. Maybe it’s the pressure of having too many cases on their desks. More and more I’m seeing insurance adjusters who are outright lying to claimants. It is the sort of statements that provoke claimants to call lawyers. It’s not about any “sue happy” environment. It’s about insurance adjusters (some, not all) who are deliberately misleading claimants in order to keep payments low.