Confessions of a Former Insurance Adjuster: The Push for Lower Payouts?

A large stack of money next to a smaller stack of bills and coins.

This blog is part of a multi-part series resulting from an interview with a former insurance adjuster. While we cannot reveal that person’s identity, we can share his perspective. Information that might compromise his identity has been redacted. We expected some of what we heard. We were surprised by the rest. Remember, this is what lawyers call hearsay, but we found it insightful.

Do insurance companies pressure their claims adjusters to submit lowball offers or close claims quickly? I can only talk about my personal experience. I can think of four different ways I experienced this type of pressure.

An adjuster's red pen grouping clients into four categories.Adjuster Rankings

When I worked for █████, our management published periodic reports that grouped all the claims adjusters into rankings based on their average payments for bodily injury payouts. █████ claimed that the report was intended to help reduce variance and that the adjusters at either extreme (those that had the highest and lowest average loss payments) were probably doing something wrong.

What I Felt Then

Even though there was no stated performance metric on which ranking we received, I couldn’t help but feel that there was a lot of attention on these rankings – and that being ranked in the lower payout quintiles was better.

The JSF Takeaway

It’s no secret that for-profit insurance companies make more by paying out less. And, unfortunately, some car accident victims have an uphill battle to get what they may deserve. Our attorneys know this and spend time and effort upfront collecting evidence, records, and testimony trying to build a strong case that the claims adjuster can’t ignore. And when our clients don’t agree with what the insurance company offers them, it doesn’t hurt for the adjusters to know that our clients have attorneys on their side who are prepared to fight for maximum compensation, even taking their cases to court, if needed.

One Claim In, One Claim Out

Most insurance companies track how many claims each adjuster closes and how much time it takes to close them. In fact, one performance metric I’ve seen at multiple carriers is: how many claims an adjuster closes over a specific time period.

What I Felt Then

I felt that I had to close a claim for every new claim that came in. Speed was tracked.

The JSF Takeaway

Some car accident victims are surprised when they receive a compensation offer soon after the accident. Remember that a quick offer is almost never a fair offer. Is the claims adjuster feeling pressure to close the claim quickly?

It takes time to consider all the different variables of an accident and to determine all the harms and losses endured so that the offer is fair. As a first step, our firm provides a free case evaluation by an attorney to those who call or visit us online. Remember, you don’t have to accept the first thing the insurance adjuster offers you. Consult with a lawyer so that you are not needlessly rushed into accepting an offer you may regret later.

Early Settlement Offers and Verbal Releases

An insurance adjuster on the phone with a client, pressuring them into making a quick decision.When I worked at █████, we were required to make an offer to an injured party when our insured’s policy covered the accident and they were at fault. And we were tracked on how successful we were at getting people to accept those offers.
Adjusters may tell claimants that the easiest way to resolve a claim and get paid quickly is to agree to have their acceptance of the offer recorded – this is called a verbal release. Some carriers even offer a direct deposit option to get money transferred within a few days. With these early settlement offers, verbal releases were generally a requirement.

What I Felt Then

Verbal releases helped █████ close claims faster…and remember, that was being tracked. But, if a verbal release didn’t include future medical care, it meant the injured person’s case was almost certainly closed, even if they had future bills and expenses directly related to the accident.

The JSF Takeaway

Early settlement offers and verbal releases can significantly diminish the value of your claim. After a car accident, there can still be many unknowns. When will you be able to return to work? Do you know the full extent of your injuries? Will you need ongoing medical treatment? Early settlement offers often do not take all of these factors into consideration. Don’t risk having your future needs not met.

As a general rule of thumb, if you are still getting any type of medical treatment, or are still taking medications for your injuries, or are still in pain, you should not verbally accept an offer.

A patient opening a letter that explains their insurance claim has been denied.Blanket Parameters for Individual Cases

I worked for an insurance company that actually specified decision parameters for incoming claims. For example, █████ instructed me, in injury claims where the claimant was a healthy person (with no significant medical history) and the accident was minor (less than $500 in property damage), to automatically deny the claim. In other cases, we could only offer to cover one ER treatment or one primary care physician visit as an evaluation – but that was it.

What I Felt Then

While it can certainly make a claims adjuster’s job easier to have these types of parameters, blanket policies don’t take the best interests of the individual claimants into account.

The JSF Takeaway

A focus on speed in closing claims can be at odds with an adjuster’s duty to give each claim the time and attention it deserves. With the guidance and counsel of an experienced attorney, you can level the playing field between you and the adjuster.

The Insurance Company Is Protecting Their Interests, Not Yours

For more real-life stories of insurance industry tactics, check out our Insiders Know pamphlet. Another great resource is our article, Car Insurance Myths and Facts (and Recommendations From a Former Claims Adjuster).

Car accident victims don’t have to handle their claims and deal with the claims adjusters on their own.  At our firm, we have several attorneys and paralegals who used to work for insurance companies, and we understand the tactics used to delay or deny claims. Call our team at 1-866-900-7078 and let us tell them you mean business.

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