9/27/2011 7:00 PM ET|
Secrets of car insurance adjusters
After an accident, expect a claims adjuster to try to settle the case as inexpensively as possible. That's good for the insurer, but you'll need to look out for your own interests.
The light turns green. You drive forward. Suddenly your world slams sideways, and an airbag punches you in the face.
Someone ran the red light and broadsided you. Now what?
Don't say anything, and, for heaven's sake, don't sign anything.
And if the other guy's insurance company sends over a claims adjuster the next day? Don't talk to him either.
Insurance claims adjusters are trained to sniff out fraud. Some say they're also trained to mess with your head by:
- Trying to get you to settle immediately (one company sends adjusters to accident scenes to offer checks on the spot).
- Tricking you into compromising your case.
- Coercing you to use a "preferred" repair shop.
- Offering less than fair replacement value if the car is totaled.
"Insurance companies didn't get to be $15 billion and $20 billion (companies) because they give money away," says John Smith of Morgan Hubble Smith Insurance, based in Columbus, Ohio.
Let me be clear: This is not a "how to scam the system" column, and I'm not saying that claims adjusters are all a bunch of crooks. But their job is to settle a case as quickly and inexpensively as possible. It's your job to make sure you get a fair shake. Here's how:
Watch your mouth
Smith suggests this tactic, beginning at the scene: "Just shut up."
"People talk too much. Your best advice is to make sure everyone is OK and then say nothing," says Smith, who's been in the insurance industry for 27 years.
You've just been in an accident. You may be dizzy with adrenaline, purple with fury or injured and not aware of it. The first words that come out of your mouth might not be the smartest ones.
Claims adjusters love to hear things like:
- Apologies. "I'm so sorry" may come out automatically, but it might be construed as admitting fault.
- Hyperbole. "He was at least a minute late on the red light!" Witnesses or a red-light camera may say otherwise, undermining your credibility.
- Remarks about whiplash or about your old car being ready for the junk heap anyway. These nervous jokes can be used against you.
- Too much information. Don't say the accident occurred on the same day you lost your job and broke up with your girlfriend.
Winter Park, Fla., attorney Shane Fischer tells of one young numbskull who hit an elderly woman's car and jumped out to apologize. He shouldn't have smoked pot before driving, and he was soooo sorry that he'd texted his girlfriend while behind the wheel.
Don't offer too much information to paramedics or emergency room personnel either. A New York bicyclist I'll call "Schwinn" was hit by a drunken driver but made the mistake of saying he'd had some beers with friends earlier that evening.
The other guy's insurance adjuster was willing to risk a trial because he knew a jury might be disgusted with both parties. Thus the final settlement was "significantly reduced" due to Schwinn's mention of beer, according to New York City attorney Oscar Michelen.
Michelen's firm regularly represents insurance companies. He often sees cases compromised by people "making statements they did not have to make or making them inappropriately."
You have the right not to incriminate yourself. So clam up. Tell the police and/or medical personnel only the absolute basics, lest a claims adjuster use your words against you later.
Don't be afraid to speak up
In the 1980s, I was driving on a one-way street when a guy suddenly veered across all four lanes. I hit the brakes and flung my right arm across my daughter, who was belted into the passenger seat.
There was no way to avoid hitting the other car. Neither the driver nor his female passenger were injured. My daughter and I were shaken but unharmed. Or so I thought.
The next morning I ached. By lunchtime my shoulder was on fire. At the end of the day, I couldn't raise my right arm. Yet I almost didn't report the injury, fearing that I'd be perceived as a fraud.
"Honest people seem to be the ones who are afraid to speak up," says Penny Gusner, a consumer analyst at CarInsurance.com.
Had an adjuster talked to me a couple of weeks later, I probably would have said, "Oh, it's not too bad," because I was raised not to be a crybaby. But it was bad. I was in pain for months -- and a quarter of a century later, the injured area still gives me trouble.
Gusner suggests keeping a "pain journal." Write down how you feel each day and how specific activities are affected -- for example, "I can't pick up my baby."
Don't be a drama queen. But do spell out the physical costs and the actual ones (missed work, the need to hire a mother's helper).
Beware psychologically loaded questions
A written record helps when it's time to give your statement. Don't ever do this without talking to your own insurance agent first. If you've hired a lawyer, request that all statements go through your legal representative.
When you do make a statement, watch out for loaded questions. A member of Asif Latif's family was treated rudely by a claims adjuster who "tried to get her to admit the accident was her fault." This inspired him to start the After Car Accidents website to offer tips on how to work with insurance companies.
According to Latif, an adjuster might ask things like:
- How could you have avoided the auto crash?
- How much do you think you are responsible?
- Do you think the weather (snow, rain, wind or fog) affected you?
- Did you have any previous injuries like back or neck pain before the car wreck?
- Can we get access to your medical records and the name and address of the doctor who is treating you? (Don't do this, as it potentially gives access to your entire medical history.)
According to Gusner, an adjuster might offer to come to your home. There he or she will hit you with psychologically sneaky questions. A young mother might be asked, "You can still take care of your kids, right?"
"No mom wants to say, 'No, I'm not taking care of my kids,'" Gusner says. "The claims adjuster might be friendly and nice, and you might want to think of him as a friend. But he might get paid a bonus to settle as quickly as possible."
Don't let yourself be hurried
The faster you settle, the less likely your rights will be fully protected. Suppose a claims adjuster shows up at the scene, runs some numbers and offers you a check for $1,000 to fix your car, plus an additional $500 for the "inconvenience"?
Don't take it, advises J.D. Howard of the Insurance Consumer Advocate Network. You might have a soft-tissue injury that you can't feel right away but that three days later will hurt like a tax audit.
"Which is why the insurance claims adjuster wants to get to you as soon as possible," says Howard, himself an adjuster for 26 years.
It is possible to get those release forms set aside. But it's not a sure thing, and it costs time, aggravation and attorney's fees.
Philip Reed, a senior consumer editor at Edmunds.com, interviewed a former adjuster who recalled one accident victim who took the first offer, saying he trusted that the company would be honest.
The adjuster admitted to "almost" feeling bad about that. "I wanted to say, 'Wait! Wait! Don't you want to negotiate?' But being a good claims adjuster, I would never do that."
Refuse to be rushed. Would you take the first offer if you were buying a car instead of trying to get it fixed?
Do your homework
Depending on your situation, it can be hard not to feel rushed. Commuters need to get to work. One-car families find themselves stranded without a way to shop for necessities. People caring for elderly parents need to get Mom or Dad to a doctor.
Insurance policies generally allow for a rental car while yours is being fixed. Keep the receipts and insist on reimbursement. (More on that below.)
If you don't already have an auto shop you trust, find one pronto. (Read "Can you trust your mechanic?" on MSN Autos.) That's because a claims adjuster will almost certainly steer you toward a "preferred" repair place.
Don't go there. According to Reed, insurance companies "know they can control costs much better at certain shops" by specifying the most basic of repairs.
"You can fix a car so that it looks beautiful and works pretty well, but there might be serious problems underneath," he says.
Even if you choose the shop, be ready to hold the claims adjuster to certain standards. In March 2010, Ritter Hoy of Columbus, Ohio, was T-boned while driving her Infiniti. She declined to use the at-fault driver's "preferred" shop. Yet when she tried to sell the Infiniti about seven months later, it was found to have extensive frame damage.
Hoy called her body shop and was told the vehicle had been fixed "to the specifications of the insurance company." Ultimately, the vehicle sold for $2,500 less than its Blue Book value.
Be prepared to push back
While you're waiting to hear the repair estimate, start looking for "comps," or autos of comparable make and model. If your car is too badly damaged, it might be declared a total loss. You need to know a realistic replacement cost so you can judge whether the adjuster's offer is fair.
Last February my daughter and son-in-law were broadsided while driving the 2001 Chevrolet Cavalier I had given them when I went car-free. The repair estimate was $2,200 -- just about what the car was worth.
But it was their only form of transportation, and both have chronic illnesses that make it tough to wait for a bus on a 110-degree Phoenix day. After some back-and-forth, Abby and Tim were given $3,400, which they put toward a late-model used car. (Find the best used-car deals on MSN Autos.)
However, they neglected to ask for rental-car reimbursement. The accident plus weeks of negotiations had left them stressed and exhausted -- and forgetful. The claims adjuster didn't remind them they were entitled to repayment. His job was to save his company money.
Remember: Insurance companies are businesses. They stay in business by taking in more than they pay out. It's in their best interest to get you to accept a bare minimum, so be prepared to push back.
You might not be as lucky as I was back in the 1980s. The other guy's adjuster arranged for repairs and medical bills to be covered. He offered a cash settlement without being asked. My agent told me that's because the other driver did not contest my version of the accident.
Not because I was telling the truth, but because he wasn't: The woman in the car with him was not his wife.
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I was an auto adjuster for ten years. What I wanted most of all was for the insured, and the claimant to be happy with their repairs and then go away. We don't get paid extra for screwing people over and fighting with them about it. If the repairs met ICAR standards (ICAR is a quality standard set by auto manufacturers and repair shops) nobody on my end questioned the cost or extent of those repairs. I don't want to pay for stuff you don't need, but I do want you to stop calling me.
A "preferred" shop is a shop that the carrier has a contractual relationship with. In exchange for referring repairs to that shop exclusively, the shop agrees to discounts. They're tiny discounts, 10% off labor, no mark-up on glass, etc. On a single claim the discounts are meaningless. On three million dollars worth of repair work over a year, they add up. I always suggested to claimants that if they had a shop they knew and trusted, to go there. If they had no preference, use the preferred shop. The main reason to use a preferred shop is that as an adjuster, I have leverage over the preferred shop. They want my customers to be happy. In a non preferred shop, you're on your own.
Used cars can be repaired with used parts. Your five year old Taurus may be your "new" car in your mind, but it's rolling around with five year old parts. If I can find clean used parts, that's a fair repair. Manufacturers make it nearly impossible to buy new parts. If you tried to assemble a $10,000 car using OEM parts, you'd spend around $100,000. I promise you that even if I wrote an estimate for all new parts, the moment that check was in the hands of your shop they'd be calling around for used stuff and pocketing the difference.
Talking to the adjuster is exactly what you should be doing. His job is to investigate what happened in the accident. You failing to admit you were possibly drunk doesn't mean I don't find out about it. It just means it takes me longer to find out about it. Yes, your conduct can be determined to have contributed to the accident, and your settlement will reflect that. It is what it is.
None of us are afraid of your lawyer. Think about it. Over the course of a year I'll have over a dozen cases settle with your lawyer. We have a rapport. We speak regularly. Yes, we each have our adversarial role to play, but your lawyer in all likelihood will never see you again, while his relationship with me is essential for his ongoing success. I will pay more to settle your claim if you're represented, because I need to add in enough money to pay him. You won't see more money. We all have a pretty good idea of what a case is worth and they all settle eventually. If you want to drag it out and make sure your lawyer and your chiro get paid, it's fine with me. In most cases we prefer to deal with a lawyer, who is calm and rational, than with you, who thinks he just won the lottery because his neck hurts.
Donna, I've worked in claims for years, as an adjuster and in management. I have to take exception to some of your observations. For example, what you don't mention is that often preferred shops will offer a life-of-the-car guarantee on repairs, something that you may not typically get with your local shop. Also, the savings that insurance companies enjoy at direct repair facilities is not, as you insinuate, from not making needed repairs but by negotiating lower labor rates (because the carriers are able to send greater numbers to the shops, thus resulting in economies of scale). Usually direct repair facilities have to meet certain levels of certification to be considered by the carrier, something other shops may not have. Finally, just because a shop is a direct repair facility does not mean that it's exclusive to the carrier--your local Lexus dealer could potentially be a direct repair facility for several insurance carriers.
Yes, it is an adjuster's job to settle a claim as economically as possible. But your article neglects to point out what a highly regulated industry insurance is. Carriers are subject to audits by the state departments of insurance, and if they are engaging in some of the practices you note, they could be fined, sanctioned, and sometimes barred from doing business in the state.
The guy you quote in the article, Mr. Smith with Morgan Hubble Smith, works for an agency, not an insurance company. Sure, carriers don't get to be billion dollar companies by giving money away, but his comment also seems to neglect the fact that insurance companies, while we certainly do watch expenses and loss payments, make our money through the investment of money, not by taking advantage of claimants and insureds.
I can tell you that I am not aware of a single claim where liability was denied simply because someone apologized at the scene. Claims are investigated by obtaining statements of the various parties and witnesses to the loss, by reviewing police reports, medical reports, and other information. We look at the areas where the vehicles were damaged and angles of impact, speed of the cars, skid marks, etc.
Your article skims the surface of advice to people who are involved in accidents. It neglects key information like making a personal injury (PIP) claim in states where that coverage exists, Med Pay coverage that might be available, uninsured or underinsured motorist coverage that could come into play. You neglect to mention that hiring an attorney for a small, soft tissue claim is often a money-losing proposition for a claimant, and you could offer helpful suggestions for actually negotiating with the carrier. I can tell you that a "pain journal" is probably going to be looked at with some skepticism.
Donna, normally I like your articles and find them helpful, but this one missed the mark for me.
Donna Freedman, you should be fired for such a misleading, non-factual, non-investigated article!! The whole article is a "crock". If its not obvious I am a claims adjuster and have been for over 15 years now. I have helped thousands and thousands of people and have never once tried to settle a case for any less than what was deserved. Why don't you investigate your facts before stereotyping an entire industry!!! People are already weary of "the big bad insurance company" and your article, if anyone believes it, will only make people less inclined to share information about an accident and more inclined to seek out these Personal Injury Attorneys, who a majority of them are the ones who you shouldn't trust and are for lack of a better term "slimebags".. not saying they all are, but a majority are. Why haven't you gone and found out what WE go through on the other side, where people yell at us, insult us, hang up on us, harrass us, because we don't settle a claim within 10 minutes, or because they are at fault for an accident, but just won't accept that. There is an Insurance Bureau and regulations in every state which keeps insurance companies from doing anything that you have said in your article.. Even if a case is settled within a few hours, there are plenty of steps a person can take if they feel they were treated unfairly or the settlement was unfair. GET YOUR FACTS STRAIGHT LADY.. do you work for an injury lawyer?
I too own a Collision Repair Facility and would like to give my .02$ worth. As said before, there are good Insurance companies (more than not) and there are bad insurance companies. I have never had an adjuster try to low ball or give less than the repair required and if their estimate was low then a supplement was made and paid for by the insurance company. They do like using recycled parts more than aftermarket and almost never want to use OEM (factory) parts because of the price. As far as DRP (direct repair facilities) they don't actually work for the insurance company but are governed by the insurance company with discounted labor charges, parts prices and material cost in trade for sending claimants to their shop for repairs. I'm not a DRP shop simply because I would rather represent you the customer and make sure the repair is done correctly. I have seen some DRP shops cut corners to make up for the loss in profit.
I have had experiences in a total loss with my own cars involved in accidents and every time I was low balled on the amount the insurance company wanted to give in compensation. A little research with NADA and Kelly Bluebook researches online will help in that situation.
As far as home, we had a major hail storm a few years ago and my insurance company adjuster was calling me before I made the claim and made sure his estimate was fair and cover almost all of the repairs.
My experience shows that the "Discount" "Low Cost" companies give us the body shop and you the customer the most problems. Spend a little more and use a better insurance company, when you need them, they are there to help.
I agree with some of what was stated. I have been in the insurance industry for over 25 years and not all adjusters all like what was described.
One has to remember that there is a difference between an "adjuster" and an "appraiser".
An appraiser only looks at the damage on the vehicle and usually is only dealing with the damage to the vehicle. An adjuster could handle the damage to the vehicle, along with any property damage(such as to a fence or building), bodily injury, etc. The 4 insurance companies that I worked for were all for customer satisfaction. Whether it be an insured or a claimant. Some appraisers and adjusters are better then others and may have the the correct mindset to do what should be done. One has to remember that the job of a shop is to repair the vehicle to preaccident condition. The insurance company is responsible for the payment of such. One has to be able to take the vehicle to a competent shop. So called "steering" is against the law in a lot of states. The owner gets to pick the shop. Check with your local insurance commissioner. If the vehicle is considered a total loss, check local listings for a comp vehicle so that when one talks with the total loss settlement adjuster, one has some info to back up what one wants for the vehicle. Newspapers, Auto trader, etc are good resources. The accident does not have to be a stressful situation if one does some homework.
"Schwinn" admitted to drinking before the accident. Ever hear of "contributory negligence?" Schwinn was impaired and may have made the accident worse. So keeping his mouth shut as the slime who wrote this slanted article implied, is promoting fraud. Nice.
I've been a mechanic and also an independent insurance agent for over 25 years, and I've never once seen one of the things that you've mentioned. Maybe it's because I don't deal with discount insurance companies, but still, I've never seen the blatant and illegal acts that you report happen on a regular basis.
If you have a legitimate problem with an adjuster, ask to go and see a claims supervisor in person. Be respectful, and cooperative. Some of the commenters here will have trouble with a claim, not because the adjuster is a crook, but because they refuse to cooperate with reasonable and legitimate requests from their adjuster. The adjuster's job is to verify the facts of the claim before they pay it, and they won't process your claim until they know the facts.
Refusing to cooperate with adjusters is just plain foolish and bad advice. This kind of advice comes from "claim advocates", public adjusters and lawyers. Most if not all of these people get a percentage of the claim money for "helping" you settle the claim. Most provide little if any help or additional money, and they almost always slow down the payment of your claim.
I noticed that no one mentioned getting help from your agent. That's why you have an agent. To inform and educate you, and to advocate for you in a claim! Insurance is a service, and not a product like everyone thinks it is. We provide financial protections and peace of mind by using insurance products. Much like how a good financial adviser helps you make money by using mutual funds and other investment vehicles. You don't buy a stock because it has the lowest price, you buy it because it provides the best return on your money! The same is true of insurance.
What poor advise. Whoever wrote this article is wrong. Insurance companies make money when there are no accidents. They loose money during large losses. Always tell the police what occured, walk them through the loss, draw a diagram if needed. If you listen to this idiots advice your claim will just sit. Work with the adjusters and amazingly your car will be repaired or totaled in a timely manner. If the offer for a total loss is not agreeable it is the guidelines from the state controling them, Insurance pays what the state allows based on documentation. Most issues regarding a total are incorrect options or dreams of grandure.
The process is simple most of the time, you can always make it as hard as you want. Oh yeah, those prefered shops are prefered for a reason, they are good at what they do. By law it is the customers choice where they want the car repaired at, you own the car... Keep it simple and all is well..
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