When you make a personal injury claim, remember that part of the insurance adjuster's job is to save their company money. And although most adjusters do their jobs within the rules, there are a few who will try to bend (and sometimes break) those rules if they think they can get away with it. Let's look at some improper negotiating tactics that adjusters sometimes use, and explain how to respond if an adjuster tries one on you.
When beginning personal injury settlement negotiations, an adjuster may tell you to contact the company that insures another person or business involved in the accident, because that other person or business was more at fault for the accident than its insured. Politely remind the adjuster that until one company or the other commits itself in writing to be the primary insurance carrier, you are entitled to proceed against either responsible party.
If there was any delay between your accident and when you notified the insurance company in writing of your intention to file a claim, an insurance adjuster might try to intimidate you by telling you that you waited too long and that the delay might now disqualify your claim.
In fact, with third-party claims there is no time limit to file a notice of claim (a filing deadline set by a law called the "statute of limitations" only applies when you take the matter to court and file a personal injury lawsuit). If the adjuster for a third party contends that you delayed "too long" or asks why you waited to file your claim when you are still well within the statute of limitations window, remind the adjuster that there is no other time limit for filing a liability claim.
If you are filing a claim under your own insurance coverage, your policy may require that a notice of injury be filed within a specific number of days or within a reasonable time after the accident. But even if you have delayed before filing a notice of claim, the insurance company must honor your claim unless the claim was so late that it negatively affected (prejudiced) the insurance company’s ability to investigate the claim. It's up to the insurance company to prove any prejudice caused by the delay—for example, that it was unable to investigate the scene of the accident or that evidence was destroyed—and it's very difficult for insurers to meet this proof burden.
Tell the claims adjuster the reasons for the delay in notifying the insurance company: for example, you didn’t know who the responsible party might be; you were not provided with adequate insurance information. But do not concede that the time was unreasonable. And do not permit the adjuster to put you off your claim. This tactic of suggesting that you filed your claim too late is just an attempt to make you so nervous that you will jump at any small settlement offer out of fear of losing your claim entirely.
It's none of an insurance adjuster’s business whether your lost time from work was covered by sick leave or vacation pay. And in most cases, it's none of the adjuster’s business if your medical bills were paid by your health insurance company or some other insurer (except if your accident was in California; see "The California Exception," below). That's because under what's known as the "collateral source rule" it's improper for an adjuster to consider other ("collateral") sources of payment in determining a reasonable settlement amount. In fact, the adjuster isn’t even supposed to ask you about such payments.
The reasoning behind the collateral source rule is simple. A person who causes your injuries (or his or her insurance company) should not benefit from the fact that you have taken the precaution of paying for health or other insurance, or that you have earned the right to sick pay or vacation time.
So, if an adjuster asks about other sources of payments you have had to cover your medical bills or lost earnings, remind the adjuster that the collateral source rule prohibits such questions. If the adjuster pushes the matter, ask to speak to the adjuster’s superior and, if necessary, let the adjuster and the superior know that you will report the matter to your state’s insurance department.
The California Exception. As explained above, in general it is none of an insurance adjuster’s business whether you have health insurance that has paid the medical bills from your accident. A 2011 case from the California Supreme Court changes that (but only slightly) for insurance claims arising from accidents in California. The court in the case of Howell vs. Hamilton Meats & Provisions said that in an accident lawsuit to recover payment of medical bills in California, an injured person whose medical costs were covered by his or her insurance may only collect (from the at-fault party) the amount that was actually paid by the injured person’s health insurance company. The injured person may not collect in court the full amount of the medical provider’s bill when no one actually had to pay that full amount.
Based on the Howell ruling, an insurance adjuster in California is likely to ask an injured claimant whether he or she has health insurance coverage that paid the medical bills that arose from the accident. If you are in that situation, remind the adjuster that you are not asking the insurance company specifically to reimburse you for your medical bills; you are simply using those bills as a starting point in calculating your losses.
If the adjuster mentions the Howell case, tell them you are well aware of the ruling and that it does not change how an appropriate amount of damages (total compensation) for your injuries is figured. The court in Howell decided only the much more specific, narrow question of the amount of medical bills that can be recovered in an actual lawsuit. Remind the adjuster that you are negotiating a claim settlement; you are not in a lawsuit. And you can tell the adjuster that if your claim winds up in a lawsuit, there will be plenty of time for the lawyers to sort out the question of actual medical payments.
For a step-by-step guide to the injury claim negotiation process—and everything else you need to know about dealing with an insurance company after an accident—get How to Win Your Personal Injury Claim, by Joseph L. Matthews (Nolo).