Most people involved in a car accident turn to their insurance companies for financial protection and support. After all, that is what insurance is for.
However, what many individuals may not realize is that insurance companies, like any other business, are profit-driven entities. To maximize their bottom line, some insurance companies resort to downplaying car accident claims, thereby saving substantial amounts of money.
Deny legitimate claims
One common strategy insurance companies use is to deny legitimate claims outright. They may scrutinize the details of an accident meticulously, looking for any reason to reject a claim, even if it is entirely valid.
Delay claim settlements
Insurers may engage in protracted investigations and requests for additional documentation, which can leave claimants in a vulnerable and financially strained position. As the wait for a resolution continues, insurance companies can retain their money longer and invest it to generate returns.
Offer low settlements
When a company cannot deny a claim or delay it indefinitely, the insurer may offer low settlement amounts. This practice minimizes companies’ payout while still appearing to fulfill their obligations. Claimants, not realizing the extent of their losses, may accept these insufficient offers.
Brooklyn accounts for 33% of car accidents in New York City, the highest of the five boroughs. Many of the people in these accidents turn to their insurance companies for help. Unfortunately, insurance policies are notoriously complex, and policyholders may not fully understand the intricacies of their coverage. This can lead to confusion and discourage those involved from pursuing their claims.
Impose excessively high deductibles
If the deductible is close to the cost of repairs or medical bills, policyholders may decide to pay for the damages out of pocket rather than risking increased premiums. This keeps insurance companies from paying out claims while collecting premiums.
While insurance companies can serve an important role in mitigating financial risks, they are not altruistic institutions. Ultimately, understanding the profit motive of insurance companies can help individuals navigate the claims process more effectively and ensure that they receive the compensation they deserve after a car accident.