How Insurance Companies Determine Compensation – An Insider’s Perspective

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How Insurance Companies Determine Compensation
An Insiders Perspective
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This is the blog Id like every client to
read.Before starting Derek Wilson Personal
Injury Law, I worked as defense for the insurance
companies. I saw, first hand, exactly how
insurance companies determine compensation and
make their decisions.
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I also saw why some people received generous
compensation while others with similar injuries
received none. The first thing to understand is
how insurance companies report profit.
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Its About Assessing Risk The insurance company
looks at all the money theyve brought in through
their policies and sets some of it aside in a
reserve fund. This reserve is to cover what they
expect theyll pay out in compensation.
Everything left over (less expenses and taxes of
course) is reported to the shareholders as profit.
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The key for insurance companies is to make sure
that enough money is put away in the reserve
because, once that reserve is set, it is very
hard to increase it.Why? Increasing the reserve
amount impacts profit and makes for unhappy
shareholders, so insurance companies have to
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a) Make sure they set aside enough to cover what
theyll need to pay out and b) make sure that
they dont pay out more than has been set aside
in the reserve fund. Building a CaseWhen you
hire me as your personal injury lawyer, my job is
to build your case.
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Basically, I work hard to prove to the insurance
company that your injuries are serious. If I can
convince them (with your help of course) they
will hopefully set aside a high enough
reserve that will allow them to pay out the
compensation you need.So what does this reserve
setting look like?
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If youve ever been in an accident, youve
probably seen it in action Let say my car hits
yours on the way to work. We each deal with our
own insurance company. A few days later, you get
a call from my insurance company asking how
youre doing, and details of the accident.
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Despite the good manners, theyre not calling to
help you.Usually theyll ask if youre working,
about your injuries, etc. Understand that theyre
trying to figure out if youre likely to make a
claim and, if so, how much money they should set
aside in a reserve fund.
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If nothing else, remember this You are under no
obligation to speak to that person! What You Can
Do to HelpMy advice? If the insurance company
calls, hang up the phone.If youre been injured,
you dont want to them to set that initial
reserve too low.
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The only time you should pick up the phone is to
call me. My job is build exposure for your case
over the long term. Basically to show to them
that yes, youve been seriously injured, yes,
this injury will likely impact your ability to
earn in the future, and yes, you are entitled to
a certain amount of compensation to cover your
care and/or damages.
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Think of it like this If you share that youre
an electrician and youve hurt your hands, the
insurance company is going to assess the chances
of your suing as high and set that reserve amount
higher. If youre an electrician but its your
neck thats been injured, they may set that
reserve low.
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Once that reserve is set, its very hard to
change. Even if we later discover that the
migraines induced by the neck injury are
debilitating, its still very hard to
change.This is why what you do immediately after
the accident is so important.
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A well-documented case with treating doctors,
with a consistently credible and honest client at
its heart will force the insurance company to set
those reserves higher. If you havent properly
documented your case or arent being super active
(i.e. working with your lawyer), theyll probably
set the reserve lower.
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If you want the insurance company to set the
right reserve and be able to pay you what you
need to heal, youve got to understand how things
work and be patient because its going to take
time.
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If you have any question about how insurance
companies think and why it makes sense to hire a
lawyer with experience on both sides of the
negotiating table, give me a call or leave a
comment below.http//derekwilsonlaw.ca/