Why Do Insurance Companies Lowball?

July 7, 2024 | Jarrett Blakeley
Why Do Insurance Companies Lowball?

If you've suffered an injury in an accident that wasn't your fault, you may be counting on the at-fault party's insurance company to compensate you fairly for your medical bills, lost income, pain and suffering, and other damages. Unfortunately, what often happens instead is the insurance adjuster makes you a lowball settlement offer that doesn't come close to covering your losses. This is an extremely common tactic used by insurance companies to quickly settle claims for as little money as possible.

Let's take an in-depth look at why insurance companies routinely make lowball offers, their strategies, and how you can fight back and get the full and fair compensation you deserve for your injuries. If an insurance company has made you an unreasonably low settlement offer, the most important thing to remember is that you don't have to accept it—and you should contact an experienced personal injury lawyer right away for help with your claim.

Common Reasons Insurance Companies Make Lowball Offers

There are several reasons why insurance companies frequently make lowball settlement offers to accident victims. Here are some of the most common:

To Protect Their Profits

First and foremost, insurance companies are for-profit businesses. Their primary goal is to make money, not pay out on claims. Insurance adjusters are often given bonuses or other incentives based on how much money they save the company by getting claimants to accept low settlements. Making lowball offers is a key way insurers try to minimize payouts and protect their bottom line.

They Assume You Don't Know Your Claim's True Worth

Lowball settlement offer from insurer

Insurance companies prey on the fact that most accident victims don't know how much their injury claim is worth. Many factors go into valuing a claim, including the full extent of your injuries, whether you'll need ongoing medical treatment, how much work you've missed, and how your injuries have impacted your life. Insurers take advantage of claimants' lack of knowledge to try to get them to accept far less than they deserve.

They Hope You'll Be Desperate to Settle Quickly

The insurance adjuster knows you are likely facing mounting medical bills and may be unable to work due to your injuries. They assume you need money fast and will jump at any settlement offer, even if it's much lower than your claim is worth. Adjusters often use high-pressure tactics, telling victims they must accept the offer immediately or risk getting nothing. Don't fall for it.

To Discourage You From Hiring a Lawyer

Insurance companies know that accident victims who hire experienced personal injury lawyers typically end up with much higher settlements than those who try to handle their claims on their own. Adjusters make lowball offers, hoping you'll accept them rather than going through the trouble and expense of getting a lawyer involved. However, most personal injury attorneys work on a contingency fee basis, meaning you pay nothing upfront, and they only get paid if they win money for you.

Common Lowballing Tactics by Insurers

Insurance adjusters are trained to use a variety of tactics to get claimants to accept unreasonably low settlement offers. Be on the lookout for these common strategies:

Quick Lowball Offers

The adjuster calls you shortly after the accident, expresses sympathy for your situation, and makes a settlement offer. It may seem like a lot of money at first glance. However, initial offers are almost always lowball offers. The adjuster is trying to get you to accept a low amount before you've had a chance to fully assess your injuries and other damages.

Disputing Fault for the Accident

Another common lowballing tactic is for the adjuster to dispute who was at fault for the accident, even if liability seems obvious. They may claim their insured isn't entirely to blame or suggest that you are partially at fault. This is an attempt to get you to accept some of the responsibility so they can justify reducing your settlement. Don't let them bully you into accepting an unfair portion of fault.

Requesting Unnecessary Information

The insurance company may ask you to provide extensive documentation before making a settlement offer. This may include medical records going back many years, even if they aren't relevant to your current injuries. Or they may ask you to give a recorded statement about how the accident happened. These are delay tactics designed to drag out the claims process, hoping you'll get frustrated and accept a low offer.

Claiming Your Injuries Aren't Severe

To justify a lowball offer, the adjuster may downplay the seriousness of your injuries. They may claim that your injuries were preexisting and not caused by the accident. Or suggest that you aren't as badly hurt as you claim to be.

The adjuster may say they need you to undergo an "independent" medical exam with a doctor of their choosing before they can process your claim. The insurance company hires these doctors and are biased to find that accident victims' injuries aren't severe.

Using What You Say Against You

Another tactic adjusters use is to get you to make statements they can use to minimize your payout. They may ask you to give a recorded statement describing your account of how the accident happened or ask you to sign a medical records release form.

Then, they'll pick apart what you've said, looking for anything they can use to claim you're not seriously hurt or that you admitted fault for the accident. That's why you should never give a statement to the insurance company without consulting a lawyer.

Making False Promises

To string you along, the adjuster may make promises they do not intend to keep. They may assure you that you don't need to hire a lawyer and that they'll take care of everything or promise to get you a good settlement offer if you're patient. Then, they'll come back with a lowball offer and pressure you to take it.

Don't believe everything the insurance adjuster tells you. Remember, they're not on your side.

How to Respond to a Lowball Settlement Offer

Getting a lowball settlement offer from an insurance company can be frustrating, especially if you're counting on the money to pay your bills and get your life back on track. Here's what you should do:

Stay Calm and Don't Accept the Offer

When you receive a lowball offer, it's important not to let your emotions get the best of you. Don't lash out at the adjuster or let them bully you into accepting the low amount. Politely decline the offer and tell them you'll be in touch after you've had a chance to review it.

Review Your Damages

Before responding to any settlement offer, you need to have a clear picture of the full extent of your damages. This includes your current and future medical expenses, lost income, lost earning capacity if your injuries have impacted your ability to work, pain and suffering, emotional distress, and any property damage from the accident. Add up all your losses to get an idea of what a fair settlement should be.

Get the Offer in Writing

Insist that the insurance company puts any settlement offer in writing. This prevents them from later claiming they never made you an offer or that the amount was different than what they verbally told you. Having the lowball offer documented will help if you need to file a bad-faith insurance practices claim against them later.

Hire an Experienced Personal Injury Lawyer

If the insurance company refuses to budge from their lowball offers, it's time to bring in reinforcements. An experienced personal injury attorney will thoroughly investigate your case, gather evidence, and build a strong claim showing the full extent of your damages.

Your personal injury lawyer will aggressively negotiate with the insurer for a fair settlement. If the insurance company doesn't cooperate, your attorney may recommend filing a personal injury lawsuit and fighting for your rights in court.

Be Willing to Walk Away

Remember, you are not obligated to accept the insurance company's lowball settlement offers. If the adjuster refuses to make you a fair offer, be prepared to walk away from the negotiating table. You may need to file a lawsuit to pursue the full compensation you deserve.

However, filing suit doesn't mean your case will definitely go to trial. The insurance company often agrees to a fair settlement once they see that you've hired a lawyer and are serious about fighting for your rights.

Protect Your Rights After an Accident

protecting your rights

Unfortunately, lowball settlement offers are a fact of life when dealing with insurance companies after an accident. However, you don't have to let insurance adjusters take advantage of you. Here are some tips for protecting your rights:

Don't Provide a Recorded Statement Without Consulting a Lawyer

After an accident, the insurance adjuster may ask you to provide a recorded statement about how the incident happened. They may claim they need this statement to process your claim. However, giving a recorded statement without consulting a personal injury attorney is one of the biggest mistakes you can make.

The insurance company is looking for anything to minimize or deny your claim. They may ask leading questions to get you to say something that makes it seem like the accident was partly your fault or that you aren't seriously hurt. The adjuster may later take your statement out of context and use it against you.

Even if you believe you did nothing wrong, it's best not to give a statement until you've had an opportunity to speak with a lawyer. Your lawyer will make sure you don't say anything that can hurt your claim.

If a statement is necessary, your attorney may be present during the recording or arrange to provide a written statement instead. Let your lawyer deal with the insurance company so you can focus on your recovery.

Don't Sign Blanket Medical Records Release Forms

The insurance adjuster may ask you to sign a release form so they can obtain your medical records. They may say they need this information to verify your injuries before they can settle your claim. However, you should never sign a blanket medical release without your attorney reviewing it first.

A blanket medical release gives the insurance company access to ALL your medical records, not just those related to the accident. The adjuster will comb through your records, looking for anything they can use to claim your injuries were preexisting and not caused by the accident. If you've ever complained of similar symptoms like pain or headaches to a doctor in the past, the insurance company may argue that the accident didn't cause your current injuries.

Your lawyer may agree to provide the insurer with medical records related to your accident injuries. However, your attorney will ensure the release is limited in scope and doesn't give the adjuster carte blanche to go on a fishing expedition through your entire medical history.

Keep Detailed Records of Your Medical Treatment

To get fair compensation for your injuries, you'll need to prove the full extent of your damages. This starts with keeping detailed records of all the medical treatment you receive for your accident-related injuries.

Make sure to keep copies of all your medical bills, doctor's notes, physical therapy records, and receipts for any medication or medical equipment you need. If you have health insurance, keep records of your co-pays and deductibles. Your lawyer will use your medical records and bills to create a demand package showing the insurance company how much your claim is worth.

If you don't have health insurance, let your doctor know you're in an accident case and ask if they'd be willing to treat you on a lien basis. This means they'll provide medical care with the agreement that they'll be paid out of your settlement. Your lawyer can find doctors who work on a lien basis if needed.

Follow Your Doctor's Treatment Recommendations

One of the most important things you can do to protect your health and legal rights after an accident is to follow your doctor's treatment recommendations. This means attending all doctor's appointments and physical therapy sessions and taking medications as prescribed.

If you skip appointments or fail to follow your treatment plan, the insurance company may argue that you aren't seriously hurt or that you've made your injuries worse. The adjuster may claim it was your negligence, not the accident, that caused your current condition.

It's also important not to return to work or engage in strenuous physical activities until your doctor clears you. If you go back to work too soon and end up reinjuring yourself, it will be harder to get compensation for your additional medical expenses and lost income.

Be Cautious About Social Media Posts

In today's digital age, most of us are used to sharing the details of our lives on social media. However, if you've been in an accident, it's best to avoid posting about it on Facebook, Instagram, Twitter, or other platforms.

Insurance companies routinely search social media for information about accident victims. The adjuster may take your photos or posts out of context to argue that your injuries aren't serious. For example, if you post a photo of yourself smiling at a family gathering, the insurance company may claim you couldn't possibly be in much pain.

You should assume the insurance company may see anything you post on social media. To protect your privacy and your claim, it's best not to post anything about your accident or injuries online. Ask your lawyer for guidance if you have questions about what you can and can't share.

Don't Be a Victim Twice

Being injured in an accident is bad enough. Don't let the insurance company victimize you a second time by pressuring you into accepting an unreasonably low settlement offer. You have rights and deserve to be fairly compensated for all your losses. If you've been lowballed by an insurance company, don't go it alone.

Contact a reputable personal injury attorney in your area today for a free consultation. An experienced lawyer will deal with the insurance company and fight to get you the maximum compensation for your claim.

Remember, you only get one shot at a settlement. Ensure you have a skilled legal advocate in your corner to ensure the insurance company doesn't take advantage of you.


Jarrett Blakeley

Firm founder Jarrett Blakeley fights to get maximum compensation for all of Blakeley Law Firm’s clients. He has been practicing law since 2006 and takes great pride in representing the rights of injured individuals against the insurance companies and the law firms that represent them. He has successfully represented thousands of clients and recovered tens of millions of dollars on their behalf. Mr. Blakeley strives to give all of his clients personal attention and maximum effort and seeks to instill a firm culture that prioritizes customer service and compassion for the injured over all else. Fighting for the injured is Jarrett Blakeley’s greatest passion and he looks forward to fighting for the injured for the rest of his career.

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