Dont Bother Giving Statements to Insurance Companies After an Accident

In the days following a personal injury accident, many injured people receive an outpouring of calls and messages from friends, family and.... insurance adjusters. While it may be easy to give the insurance adjuster a return call while in the call returning mode, the fact remains that insurance adjusters are not your friends.
From a personal perspective, insurance adjusters and the investigators they commonly associate with may be good, fine people. However, as soon as a car accident, fall, or any other type of personal injury occurs, their interest is directly opposed to yours.

Truth be told, the insurance companies for responsible parties have a job to do in terms of defending their insured's rights. What many injured people fail to appreciate is that by taking an oral or written statement from you, they are actually in the process of assembling a case against you! That's right, the friendly voice on the telephone who seems sincerely concerned about your physical condition is jotting down notes about yo
ur injuries and medical care in order to minimize or deny payments down the road.

As a personal injury lawyer, I consistently find insurance companies trying to gain the upper hand in the claims process from the moments following an incident. While it may be completely legal, I strongly suggest injured parties resist the temptation to discuss any aspect how an incident occurred or their injuries with anyone aside from their immediate family, doctor or lawyer.

You never mentioned that!

Though I've never been to a training session for insurance adjusters, I imagine the insurance companies spend a good deal of time teaching their representatives how to take a recorded statement that is supportive of the company’s position. In reality, it's not that hard considering that few people indeed know what their rights are or even consider how a short statement can impact the course of their claim for years to come.

Just recently, I was retained by the family of a teenage boy who was struck by a car as he crossed the street. Unfortunately, the impact resulted in fractures to the boy's leg and hip. The family came to see me after they received a letter from the insurance company that they were denying the boy's claim.

Delay, Delay, Delay

During our meeting, I quickly understood the underlying reasons for the denial. After returning from the hospital, a representative from the insurance company made a house call to the boy's home under the guise of 'just wanting to see how he's doing'. Within a five minute discussion (taken on a tape recorder) the boy divulged that he had injured the same leg in a soccer practice years before, but also that he was listening to music at the time of the incident.

While these two tidbits, likely have nothing to do with the driver's failure to keep a proper watch or extent of the boy's injuries, they arguably provide enough information for the insurance company to deny payment on the claim in a pre-litigation context.

As I prepare to file the lawsuit in this case, I am again reminded that the the handling of personal injury claims is a business-- and indeed a very big one-- for insurance companies. If you think about it--- and I'm sure many, many actuaries have-- the denial or minimal offer on a legitimate personal injury claim is simply good business for the insurance company. For one or two years during the course of litigation, they get to hold onto the money for the claim and invest it or do as they wish with with it. While some insurance companies do have to pay their attorneys to represent them, many lawyers who do insurance defense work have relatively low rates and many times are on retainer--- meaning it doesn't cost the insurance company an extra penny to litigate the claim.

For a large insurance company with thousands of claims, the cost benefit of completely denying or offering substandard payments can be substantial! Consider the time value of money for a significant injury case worth $500,000? If an insurance company conservatively invests the money during a two year litigation process at 3%, the company has effectively made an extra $30,450 by simply holding on to their money. When similar calculations are spread amongst the thousands of open claims, the added benefits to the insurance company afforded by the delay is staggering!

As a lawyer who regularly goes to court, litigating another case is nothing new or especially burdensome to me. In fact, I enjoy going to court and trying tough cases for my clients, but when I think about the inefficiencies created by an insurance companies delay and deny claims handling practice, I get downright disgusted.

So what's the answer?

Rather than try to instruct clients on what information may be disclosed or how to answer queries about liability or the extent of their injuries, I've simply adopted a 'no contact' policy for all clients when it comes to their involvement with insurance companies. There is no legal obligation (outside of uninsured or under-insured motorist matters), to provide insurance companies any personal information prior to filing a lawsuit. Why given them an upper hand?