The Odds are Nearly Even That Your Injury Claim Will be Denied: Regardless of Who the Insurer is!

A personal injury lawyer will tell you that one of the most frustrating tactics used by auto liability insurers is to suddenly find an excuse to cancel the policy of customers once they are involved in an injury-related accident. Insurance companies employ many different strategies to avoid paying claims. Some cancel policies for no stated reason, while others claim that the monthly premium payment didn’t arrive before the wreck was reported, even if it did come a day or two later during the mandated ten-day grace period. These cancellations often occur right when the policyholder needs coverage the most, leaving accident victims in a precarious position without the financial protection they thought they had purchased.

A personal injury lawyer should reference the Texas Department of Insurance records on how insurance companies honor claims, as they have revealed some very sobering data about claim handling practices. One Texas minimum coverage insurer took in over $271 million in premiums in one year, yet it has a claims complaint index that is two-and-a-half times higher than the state complaint average. Another insurer took in $575 million and had a complaint index of nearly four times the state average. The TDI also maintains a “top 10” list of insurers that have the highest total complaints in the way they handle claims, and many of these companies are well-known national carriers. More on this website

A personal injury lawyer reviewing the Insurance Department’s consumer complaint figures will find that 11 of the 25 largest auto insurers in the state, all of whom are supposed to be honoring over 100,000 policies, had a complaint index that was above average. Complaints that drivers filed with the state included such practices as delays in processing claims, “low-ball” offers and settlements, denial of claims, and liability disputes. These patterns suggest that some insurers have systematized their approach to minimizing payouts, treating claim denial and delay as standard business practices rather than exceptions.

Video Transcript

I’m Jamie Shaw with Carabin Shaw in San Antonio. How long do you actually have to file a car accident claim in Texas? Generally two years from the date of the crash. Miss that deadline and the court can throw your case out, no matter how strong it is. People think two years is plenty, so they wait. But evidence disappears, witnesses forget, and the insurance company uses that delay against you. And watch out — claims against a government vehicle can have deadlines as short as six months. Don’t guess. If you’ve been hurt in a San Antonio crash, call Carabin Shaw. Free consultation and you pay nothing unless we win. 210-222-2288.

Another favorite trick of some insurance companies in denying an injured claimant is for an adjuster for the company to tell the injured party that if the claim isn’t paid, the person will have to hire a lawyer and will probably wind up with little money for the trouble. At that point, the driver feels forced to take 50 percent or less of the claim for damages. This excuse is patently false and designed to intimidate unrepresented claimants. Since the driver probably hasn’t talked to an experienced auto accident attorney, he’s probably unaware of this fact, feels that he’s alone against the big bad insurance company, and accepts the substandard offer. The reality is that hiring an experienced attorney often results in significantly higher settlements than what an insurer initially offers.

In one year alone, consumers filed more than 6,600 complaints against auto insurers in Texas. More than half were filed by drivers who said they were not at fault in an accident but had trouble getting an insurer to pay their claims. Texas Watch is a watchdog consumer group that has turned more of its attention to auto insurance issues and their trend of higher denials. The group says that unethical companies have an advantage because they undercut regular insurers on price mainly because of their claims payment practices. A spokesman says, “the business model is they drag their feet and make it as difficult as possible for the claimant to collect in hopes they will take a low-ball offer or give up.”

Texas Watch completed a survey of customer complaints when filing damage claims against auto insurers in Texas. The largest complaint types and their percentages were: Delays in handling claims 36.7%, Unsatisfactory offers 21.8%, Denial of claims 16.3%, Other 14.6%, Customer service 10.5%. These statistics demonstrate that claim denial and delay are not rare occurrences but rather systemic problems affecting a significant portion of policyholders. The high percentage of delays in handling claims suggests that insurers may be using time as a weapon to wear down claimants and force them into accepting lower settlements.

In an underinsured motorist coverage claim, things can get very complicated for non-attorneys. For an underinsured claim to be valid, you have to show that you exhausted the other available policies. In other words, if you have $100,000 in total damages and the negligent driver has only $60,000 coverage, you have to get all $60k, or your UIM claim is viewed by your insurance company as invalid. This requirement means that claimants must first pursue every dollar available from the at-fault driver’s policy before they can access their own underinsured motorist coverage.

It is common for the defendant’s insurer to pay you only 70% of the value of their policy, sometimes even less depending on negotiation circumstances. The fact that you didn’t collect the full amount makes it impossible for your UIM claim for the difference to be honored by your carrier. There are a few well-known insurance carriers on that top-10 list that is kept by the Texas Department of Insurance; firms you would think would not be on that list. This practice essentially punishes injured parties twice: first by the inadequate coverage limits of the at-fault driver, and second by their own insurer’s refusal to honor UIM coverage.

In short, it is all the more important to have an experienced vehicle accident injury attorney help you with both claims — the liability claim against the other party and the UIM claim against your insurance. Your success lies in collecting full damage value from both. In cases where you successfully get the other party to tender policy limits, thereby exhausting that policy, you still encounter the difficulties of your company’s insurance adjuster’s alleged ignorance in regard to Texas laws, particularly the Texas Deceptive Trade Practices Act.