Negotiating With Auto Liability Insurance in Texas
When trying to negotiate your personal injury claim, you must take into consideration the insurance company you are dealing with, and why that insurance company acts the way they do, and why the insurance company feels like it can get away with treating people so poorly.
Who Are You Dealing With?: You are dealing with a liability insurance company. First you have to understand what liability insurance is, and what it says in Texas. Liability insurance typically has language that says that the insurance company will "pay for what you become legally liable for" due to whatever type of policy it is (driving for automobile, doing business in commercial policies, etc.). Obviously there are exclusions - they don't cover everything. But most important is the language itself - "what you become legally liable for". How do you determine if someone is legally liable? By a judgment, that is how. In other words, if you want to force the insurance company to pay you - you need a judgment against the person they are insuring. You don't sue the insurance company, you have to sue the person who was the driver, or the company that caused the injury, once you prove that the insured person or company is "legally liable" then the insurance company can be forced to pay.
Typically most insurance companies don't force you to file a lawsuit prior to negotiating with you. They will often try to settle the case without you needing to go to litigation. But if they have decided that they want to get out of your case cheap, or want to use and excuse not to pay, there is nothing you can do about it other than file a lawsuit - and they know it.
Why the Insurance Company Acts the Way They Do?: To explain this, I have to go back in history regarding "Bad Faith". Bad Faith claims are where a person can sue their insurance company for treating them deceptively or unfairly/fraudulently. You can get "punitive" damages (damages to punish for bad behavior) - the worse the behavior of the insurance company, the more a jury would be likely to give to punish the insurance company and send a message that you can't treat your customers this way. Sometimes this would be 6 or 7 digit figures if the behavior was bad enough. This frightened insurance companies, so they had a fear of treating people badly back with Bad Faith had teeth.
Before becoming a Dallas personal injury attorney, I used to be an insurance claims adjuster from 1989 until 1997. Back when I first started working as an adjuster, the law was not clear on whether a liability insurance company could be held to be acting in "Bad Faith" when dealing with a 3rd party (a 3rd party is the victim who is trying to file a claim against the liability insurance to get his car fixed, or medical bills paid for due to the insurance company's insured driver or person causing injury or harm negligently). The 3rd party claimant is making a claim against someone else's insurance. As a 3rd party claimant - you do not have a contractual relationship with the liability insurance company. In the mid 1990's the Tort Reform movement swept across Texas in elections all across the state. The Texas Supreme Court shortly thereafter made it clear that "Bad Faith" claims could NOT be made against liability insurance policies, since the people making the claims did not have a contract with the insurance company, and therefor the insurance company had no duty to treat 3rd party claimants fairly in any way. This combined with the legislation passed by the Texas government that put caps on damages, and other restrictions on Bad Faith claims, gave the green light to insurance companies to act any way they want in dealing with liability claims.
Why does the Insurance Company fell like they can Get Away With it?: The bottom line with any large company or corporation is making a profit. The less money paid, the more the profit. There is a conflict of interest between the policy-holders, and the stock-holders or owners of the insurance company. Policy holders want to be treated fairly when they have a claim, meaning they want to be paid for their claim, or want the insurance company to ensure they are not dragged into court on cases that should be settled. The owners, or stockholders, on the other hand, have an interest in making a profit - meaning that they want to pay as little as possible in order to increase profit. This often is in direct conflict with the policy holder's interests. Officers of corporations are responsible to their stockholders if they want to keep their position. So the bottom line is . . . the bottom line. Its about money. Insurance companies are pressured - by competition, and by stockholders, to keep payments as low as they can. Historically, because this conflict is as old as the insurance business, government has passed rules and laws to keep insurance companies in check.
Unfortunately, in the past 20 years in Texas, the law's teeth has been removed, allowing insurance companies to feel like they run rampant over people who have been victimized by wrongful acts, negligence, and other wrongdoing. People who are least able to do anything about being treated poorly (seriously injured, financially ruined by the wrongdoing of others), these are the people who are the victims of Texas allowing insurance companies to behave so badly. This is also the reason you need a lawyer to help you in dealing with the liability insurance company. The only way to force the insurance company to take responsibility is to hire a lawyer who knows his way around personal injury laws.
If you have a serious personal injury, or serious amounts of money that you are owed due to the harms, losses, or personal injury, caused by an automobile accident or a personal injury claim, hire a Texas auto accident lawyer immediately to handle your personal injury claim. You need professional help to ensure you don’t mess up your case or get screwed over by unscrupulous insurance company tactics. Believe me, they will take advantage of you as quickly as they possibly can if you let them. They don’t care if you are right or wrong. They don’t care how bad your injury is. They don’t care how “right” you are. If you give them an “out” to get out from paying anything on your case – whether on purpose or accidentally on your part – they will take that “out” and you will be left wondering what happened.
If you have a small case, or one that you insist on handling yourself for some reason, then here are some tips if you run into a road-block with an adjuster handling your personal injury claim:
1) Ask to speak to a supervisor or manager in the liability insurance company’s claims department. Sometimes the auto accident claims adjuster handling your claim might not be the sharpest pencil in the box. They may have just put in their two weeks notice and do not care. They may be filling in for someone who is on vacation and not care. They may have a personality conflict with you – so speaking with someone else might just do the trick. They might be having a bad day/week/month/year due to personal problems. Or, they might be doing just what their management tells them to do . . . only one way to find out – ask to speak to the manager/supervisor and you will find out quickly if this is just a bad liability adjuster, or a bad liability insurance company handling your automobile personal injury case.
2) Make a complaint to the Texas Department of Insurance – If you have tried to submit your claim to the automobile claims adjuster, and then tried going through management, and you still get nowhere on your claim, you can make a complaint to the Texas Department of Insurance. They make a record of all complaints against insurance companies. If it is an issue that they can force the insurance company to act differently on, they might possibly do so (don’t hold your breath, it is a very rare case that they Texas Department of Insurance will force any change – typically in a vast majority of cases, you get a letter back from the Texas Department of Insurance saying there is nothing they can do to resolve the situation – even if there is something they could do – often they just refuse to help). Even if they cannot force the insurance company to treat you fairly in your case, the complaint goes on record – and every complaint helps others in the future to see what insurance companies are good and which are bad, and what the complaints are about.
Here is a link to the complaint form page with the Texas Department of Insurance - http://www.tdi.state.tx.us/consumer/complfrm.html
Be sure and make your complaint each and every time an insurance company treats you unfairly. The problem is that the State of Texas has appointed people who don’t do anything to ruffle feathers with insurance companies right now. But eventually things will change with those in charge at the Texas Department of Insurance – it may be years, but all these things cycle around eventually – and one day there will be a pro-consumer person at the head of the Texas Department of Insurance again. When eventually that happens, a record of complaints will be helpful in determining which insurance companies have been good and which have been bad and in determining what punishment should be doled out to those who deserve punishment, and possibly compensation to those who were hurt by those acts. So be sure to lodge your complaint and be on record for unfair treatment.
3) Be sure to “Gather all witness information”. Your adjuster might not believe what you are saying. An insurance adjuster is suspicious of every personal injury claim, regardless of how legitimate your personal injury claim is. They are trained from the beginning to treat all personal injury claims with a suspicious eye.
a. People who saw accident – eyewitnesses who saw the actual running of the light, or rear ender, etc.
i. Witnesses who saw the wreckage at the scene.
ii. Witnesses who saw how or overheard how people were behaving or what they were saying at the scene of the accident, if any admissions were made, etc.
v. Other drivers.
vi. Other people involved in the accident.
vii. Tow truck drivers.
viii. Emergency response personnel from the fire department or ambulance.
ix. 911 operators who took the call – get the tapes – there may have been more than one person who called it in – and what was said on the tapes may help.
b. People who saw anything regarding any part of your personal injury.
i. Bystanders and witnesses.
iii. Ambulance Personnel.
iv. Fire Department Personnel.
v. Other drivers or passengers involved in the accident (including your own passengers/drivers).
vi. Emergency Room personnel
vii. Personal Physician – for two reasons 1) if he saw you for the injury in question, or 2) to show your history and that you never complained of the current condition before, or if you had a prior condition that was made worse by the accident, then to show how the injury/condition was changed or made worse by the incident.
viii. Lay Witnesses – these are friends, family, coworkers, people you know at church, people you know at school, teachers, bosses. These can be the most important witnesses you have. They can confirm the difference in how you appear and act before and after the accident. This way its not just your word, but you have people to vouch for you. It doesn’t matter if its your mom, dad, sister, best friend, coworker, etc. In fact, if those people won’t vouch for you, that makes your claim suspicious in the eyes of the insurance company and to a juror if your case had to go to trial.
ix. Insurance Adjusters for your insurance company, and for the other driver(s) insurance company.
4) Gather all records (medical bills and records, ambulance and fired department records, police reports, 911 call sheets, towing records, property damage estimates, proof of your lost income, rental car bills or records, proof of anything else out of pocket).
5) Gather all photographs / videos – of the accident scene while the wreckage is still there – if possible, of the accident scene at a later date to show what traffic or conditions are like at the scene, of any part of your body that verifies your personal injury claims (cuts, bruising, etc), of any identifying information on the other vehicle (such as the license plate) in case they need to be tracked down, any other photos or videos that you feel may be helpful in describing what happened to you in the liability / negligence part of you claim, AND in the damages / injury part of your claim.
6) Hire a good lawyer – hire a Texas auto accident lawyer or personal injury attorney that has a history of handling personal injury claims. You may have someone who has helped you with a family law or will situation, but if they don’t do personal injury cases, they will likely miss something that will affect the amount you can recover. Hire a competent lawyer who has a long and successful history of handling automobile personal injury claims both against adjusters in negotiations, and in trial in those cases where negotiations break down for some reason.
I am having a hard time negotiating / dealing with the insurance company on my claim. What do I do?
What is the Adjuster Looking for? First, it helps to understand how insurance adjusters are trained. What they do. The following are the areas, in order, that an adjuster attacks on each injury claim. It goes in order of a) coverage, b) liability, c) damages:
a. Coverage: The first thing an adjuster is trained to look for is whether the claim being made is a “covered loss”. Meaning – is there insurance coverage. They look to see if the person driving was a covered driver. They look to see if their insured made their payment on time. They look to see if the vehicle was a covered vehicle. They look to see if the accident happened in a way that would not be covered by them (on the job, intentional act such as road rage, etc). In other words, the very first thing they do is try to get out of coverage so they don’t have to pay – regardless of how serious your injury is or how liable their driver is. If there is no coverage, then there is no point in worrying about liability or damages – it doesn’t matter anymore to the adjuster.
b. Liability: The second thing the adjuster looks for is liability. Did their driver do something negligent or worse to cause the accident. Even if they did something to cause the accident was that action “negligence”. Sometimes, someone can cause an accident, but have done nothing wrong – such as if they had a heart attack and passed out. Many courts consider this type situation (heart attack causing driver to pass out) to not be negligence. Some insurance companies will deny liability for this type of “cause” – saying that their driver did nothing wrong – that you can’t prove he was “negligent” in any way. Some things to consider when pursuing your claim when dealing with the “liability” issue:
i. Your negligence – many insurance companies will acknowledge that their driver did something wrong, but then they will try to say that “so did you”. You were driving too fast, that you were driving too slow, you were not paying attention and could have avoided the accident if you had been paying attention, that you swerved when you should have braked, that you braked when you should have swerved, etc. These are all reasons that they will either deny your claim, or reduce the amount by a percentage that they claim you are responsible.
ii. Intentional Acts: Road rage, etc., are problems when driving on the roadways. From time to time, a hot head will do something rash to cause an accident and actually injure someone. Most liability insurance policies say they will not cover “intentional acts”. So how do you interpret this, what about it was “intentional?” Some courts will decide that an intentional act is one where you intended the consequence. In other words, the road rage driver may have swerved at you to scare you, but not intended to actually hit you, or not intended to actually hurt you – if that is the case, the courts will often find that there is coverage. But if he actually intended to hit / hurt you, then this type action is typically not covered under a liability policy, and gives an insurance company a reason to deny the claim (say it is not covered).
iii. Acts of God: Many insurance companies try to claim their driver was not negligent in the accident due to an “Act of God”. This is something caused by nature that is beyond anyone’s control. Events such as lightning, tornados, hurricanes, floods, those things that cause damage are “Acts of God”. To successfully avoid liability by using the “Act of God” defense in Texas, an insurance company must show that the cause of the accident / injury constitutes an act of God and that the insurance company’s driver was guilty of no negligence that contributed to the injury at issue. See Buffalo Marine Serv., Inc. v. Monteau, 761 S.W.2d 416, 425 (Tex.App.—Houston [14th Dist.] 1988, no writ); see also Valley Line Co. v. Musgrove Towing Service, 654 F.Supp. 1009, 1011-12 (S.D. Tex. 1987).
iv. Sudden Emergency: Many adjusters try to fall back on the “sudden emergency” defense. Claiming that due to circumstances their driver had no choice but to act the way they did due to a “sudden emergency”. Texas defines a “sudden emergency” as a condition or circumstance that (1) arises suddenly and unexpectedly, (2) calls for the driver to use action leaving no time to deliberate, and (3) not be caused by the negligence of the driver (or other person) seeking to use the “sudden emergency” doctrine as a defense, whether by failure to reasonably foresee or anticipate necessity for quick action or otherwise. See Skelly v. King, 443 S.W.2d 953, 955 (Tex.Civ.App.—Amarillo 1969) (citing Goolsbee v. Texas & N.O.R. Co., 243 S.W.2d 386 (1951)), reversed on other grounds, 452 S.W.2d 691 (Tex. 1970), subsequent proceedings, 454 S.W.2d 775 (Tex.Civ.App.—Amarillo 1970, no writ)
c. Damages: This is how you have been hurt. Physically, mentally, economically, etc. An adjuster will not automatically pay any and all bills that were caused by the accident. They often will claim several defenses (many of them false) to your claims in an attempt to not pay you or reduce the amount they pay – they are often false defenses because they are not true, but that doesn’t keep them from pursuing these defenses: They will claim the following (among others – each case is to be taken on its own facts) –
i. That you had a preexisting condition – Adjusters love to look into your medical history and claim any complaint you ever had of a similar nature is the same as the one in the accident in question. So if you suffered a back or neck injury, and if at any time in the past you complained to your doctor about a sore neck or back (even if it was just a one-time complaint 10 years ago that went away and was never followed up upon, and you totally forgot you ever even made that complaint, that’s how insignificant it was). They will try to claim that this prior complaints shows that the injury already existed and you are just trying to blame a preexisting condition/injury on their accident and trying to make money on the situation.
ii. Damage to vehicle doesn’t support injury claimed – The adjuster will often claim that your damage to your vehicle was too small to cause injury, or if the damage was high, that the type of impact wasn’t the type that would cause your injury that you claim. They will say it was a sideswipe, or a glancing blow and that you shouldn’t have felt anything.
iii. Another accident that caused a similar injury – If you have ever had another automobile accident where you were injured, they will find that information (all insurance companies share information through a service that almost all of them subscribe to). This allows them to know if you ever had a claim anywhere for anything , and know if you said your back or neck or shoulder, etc., was sore previously. They will use this information against you to claim that the injury was caused by this other accident, not theirs, and that you are trying to double-dip and get paid on both the other accident, and then again on theirs.
iv. Bills are too high – Often, insurance adjusters will claim that the doctors charged too much for the treatment that was provided. The problem is that you don’t create the rates, and you still owe the bill, regardless of whether it is high or not. If you ask the adjuster to give you something that will help you prove to the medical provider that their bill is too high (so you can ask the medical provider to lower their bill), the adjuster will not give you anything to help. In other words, he is just making this up because he doesn’t like how high the bill is. If he had some “source” the proved the bill was too high, he would be happy to share that information with you so you could approach your hospital, doctor, therapist, etc., and get them to agree to reduce their bill based on the documentation the adjuster provided. But because the adjuster is just making it up, he can’t provide you with any documentation for you to use.
v. You skipped treatments that could have healed you – Adjusters will often look through your medical records to see if you skipped appointments. If you did, they will say that you contributed to your own injury by not following the doctor’s orders. That if you had followed the doctor’s orders, your injury would have healed quicker and cost less. They will try to avoid paying your claim for your medical bills based on this argument.
vi. You went to a “non-traditional” medical provider – If you go to a chiropractor, doctor of osteopath (DO), acupuncture, herbal medicine, or other “non-traditional” medical provider, some adjusters will offer less money on your medical bills because they “don’t believe” in such treatment. Even though the treatment helps you, and keeps you off medication that would make you drowsy and unable to work, they still try avoid paying the full value of these types of claims.
vii. Your injury is “soft tissue” – Adjusters consider an injury “soft tissue” if it is the type of injury where you can’t see it with the naked eye (such as cuts or broken bones on xrays), and it requires no surgery to repair. These types of injuries are the “stepchildren” of injuries in the eyes of adjusters. They are given lower priority, and lower value due to the injury not being visible in some way. The reason for this is because if you are forced to take the case to trial to win your money from a court, a jury will be forced to rely on you saying that you were actually feeling pain, and how much pain you claim you felt. If they can see cuts, surgery, or broken bones, typically most people can see and imagine how much that hurt. With whiplash or back injuries, they have to rely on you being honest with them on the amount of pain it was causing (are you exaggerating, being honest, are you just saying what your lawyer has told you to say? – these are questions in a jury’s mind when deciding the value of a “soft tissue” claim, and can affect the amount they award – thus affecting the amount that adjusters offer to settle).
viii. Your injury should have healed quicker – In other words, you are malingering or exaggerating the severity of your injury in order to try and add value to your settlement on your injury claim. They claim that the “average” person will heal on this type of injury – with or without treatment – in 6-8 weeks. The problem with this argument is that no person is truly and “average person”. Each case must be handled on its own merits and with that particular person’s circumstance. But this doesn’t keep the adjuster from the insurance company from trying to devalue your personal injury claim by saying that your injury should have healed quicker, and that they will not pay any bills beyond “x” date.
ix. Your diagnostic testing had “no findings” – therefore it was unnecessary and the adjuster refuses to pay for it. Your doctor wants to rule out a herniation in your neck or back. You have exhibited some symptoms that are similar to herniations – and if you do have a herniated disc in your neck or back, this could be very dangerous. It could even cause paralysis in some cases – so they order an MRI to verify whether they can put you through a physical therapy regimen, or need to refer you to a specialist to see if you need surgery to repair any herniations you may have. The MRI comes back all clear. You have no herniation. The adjuster then says that because you had no herniation, you must have been exaggerating your symptoms, or that the doctor misread your symptoms, and that they will not pay for the MRI.
x. You won’t make a good witness for yourself – if you are “too” argumentative by nature, or a little quirky in a way that they think would turn off others, or if you have a criminal history that the adjuster uncovers, they will lowball you on offers due to this information. They think that a jury will not give you money, even though your claim is legitimate, because they got lucky and you have these issues they can use against you to avoid payment of a legitimate personal injury claim.
xi. You treated too little – If you had large gaps in treatment (so you didn’t treat enough). If there are gaps of a few weeks or months between the times you went to a doctor to treat your injury, the adjuster will claim that this is evidence that you must have gotten better, and then must have reinjured yourself somewhere or somehow else, and are now trying to blame that reinjury back on the accident to make some money on it.
xii. You treated too much – If your doctor has you on a treatment plan, and you go by the doctor’s plan and never miss any appointments, then the adjuster will often say that you went too often for treatment. And that the doctor’s plan was over-treatment. (So you can see that you are damned if you do, and damned if you don’t follow the doctor’s plan. If you go every time, your doctor is being greedy and treating too often just trying to make money off the situation. If you miss appointments – then you contributed to your own injury by not following doctor’s orders).
xiii. Your bills were not paid – Often, when you are dealing with an auto liability adjuster to pay your medical bills, the process can take a very long time. Sometimes it can take months, even years in some circumstances. Hospitals and some doctors will not wait that long before they turn you over to collection companies. Insurance adjusters will play dumb, and then argue “you never paid these bills, and because you have never paid them, this is evidence that you never intend to pay them, so why should we pay for something you have no intention of paying”. This, after ruining your credit, and having collection letters and calls coming at you daily for months or years, all due to their person’s negligence, and they try to dump it off on you. This is typical behavior of insurance company adjusters – cold, calculating, and uncaring.
xiv. Your bills were paid by an insurance company – Often, if you have health insurance, they will pay for your bills. So all you have out of pocket are your deductible and copays. The adjuster will try to settle with you for this amount. What they don’t tell you is that when you sign the release, you also keep your health insurer from being able to collect for what they paid. This can now affect your coverage with your health insurer. Some health insurance companies will withhold coverage for the amount of money that you cost them. They will claim that they paid $15,000.00, and should have been able to collect that from the auto insurance adjuster, but because you settled without letting them collect their amount owed to the health insurer, you breached the contract. So now the health insurer will withhold paying any additional health insurance claims until you pay the $15,000 you owed (in other words, the next $15,000 in claims is your new additional deductible). Be very careful when you have insurance companies on both sides, you are likely to be gotten from both ends in this situation. Your health insurance company is just as cold, calculating, and uncaring as the automobile liability insurance company. At the top end, they are run by the same people generally.
These are just some of the ways the adjuster will attack your claim. Each case is handled based on its own facts, and each case has its own issues that may pop up that an adjuster will try to use in order to avoid paying all or part of your legitimate claim.
Remember, each step the adjuster is looking for a way out of paying your claim. 1) Coverage – If none, then they don’t have to pay, 2) Liability – if none, no payment, if they can put some on you, then they can cut the percentage that they say your are at fault, 3) Damages – if they can say your injury was caused by something else, somewhere else, or by some other reason, they can avoid paying some, if not all of your damages claims.
Nowhere is the adjuster looking to pay you. They are looking to find ways to not pay you. Remember this, and you will understand what is happening to you when you are dealing with the adjuster.
Usually, the best bet is to hire an attorney who has been through this time after time, and can see what is coming on your case and head it off at the pass. As you can see, it is quite complex, and you are not dealing with a system designed to pay you. You are dealing with a system set up to NOT pay you.