Attorney R. Clayton Allen

Author: Attorney R. Clayton Allen, Esquire

In Part One, I talked about some considerations of why you might hire a personal injury attorney, and some ways insurance companies may take advantage of you if you don’t have an attorney. In Part Two, I’ll discuss some additional considerations.

1. The more money that is involved, the more you have to lose if you handle it wrong. And the more incentive the insurance company has to take advantage of you.

If your injuries and losses are small, then if you make a mistake in handling your claim then you haven’t lost much. However, if your losses are more substantial, then you have more at risk if you make a mistake. And the insurance company has more incentive to help you make that mistake.

2. Insurance companies train their adjusters to keep people from going to an attorney. The insurance companies call that “controlling the case”.

Why would they do that? Because the insurance companies know that an experienced and knowledgeable attorney will be able to ascertain the full extent of all your damages and losses that you are entitled to collect, will know what a fair value for those losses is, and will file suit if the insurance company won’t pay it. In other words, because the insurance company knows they’ll have to pay out more money if you have an attorney.

3. Most personal injury attorneys charge one-third of the recovery as a fee.

Because your attorney is charging a percentage of the recovery, even if he does a lot of work but doesn’t recover much, you won’t owe him much. The attorney’s financial incentive is to get as much money for you as possible. Suppose your tax preparer’s fee was only a percentage of the money he saved you on your taxes. How hard do you think he’d look to find you more savings?

Some people think a third (thirty-three per cent) sounds like a lot. Usually that’s because they don’t know what the markup is one most of the products they buy. Did you know that the average hot dog vendor on the corner is charging you fifty to sixty-three percent of the price you pay for what you buy? (1) Did you know that when you get a repair at the auto body shop, they are charging you 25% to over 100% “fee” added to the cost of the parts they provide (labor is extra)? (2) Even when you buy a shirt from a store, the store is charging you about a third of the cost you pay. (3) What about paper and envelopes (stationery)?  Average is 40%. (4) So with extensive education, experience and skill required to be an attorney, one-third is a bargain compared to what you pay for products you buy. And remember, too, that the attorney doesn’t get paid until you get paid, too. If the insurance company is difficult, a case may last a year or more, and the attorney doesn’t get paid anything for all the work done until the very end. In the meantime, normally not only is he paying his staff and office expenses and insurance and everything else, he’s also fronting the expenses to file suit, pay doctors for conferences and depositions, court reporter charges, medical records charges, and many other expenses. It’s not unusual for our Firm to be fronting expenses to clients that total in excess of a million dollars, for which we charge no interest. (Many of our competitors do charge interest on advanced expenses, but we do not).

4. You may never have a more educated, more skilled, more experienced advocate for you than when you have a personal injury attorney.

Almost all attorneys have successfully completed a four year college, successfully completed a three year law school, and successfully passed a rigorous licensing examination to be able to practice law. In our Firm, we have attorneys who have attended some of the top colleges in the country, we have attorneys who have attended some of the top law schools in the country, we have attorneys who are listed in the “Best Lawyers in America” books, we have attorneys who have received local, state, national and even international recognition for their accomplishments in the law. We have attorneys who have successfully tried many difficult cases in court on behalf of our clients and have obtained a number of the top verdicts in Virginia. And we enjoy helping people.

Attorney R. Clayton Allen

Author: Attorney R. Clayton Allen

As a personal injury attorney, one of the questions I am most frequently asked is why an injured person needs to hire an attorney to represent them. Here’s an outline of how I usually answer that question.

Sometimes you don’t. If your injuries are relatively minor, if your medical treatment is for only a short period of time, and if your medical expenses and other damages are small, and if you are pretty savvy about business matters and negotiating generally, then you may be able to negotiate a settlement with the insurance company that will net you about the same or maybe even a little more than if you had an attorney. But that’s a lot of ifs, and that only applies to small cases for reasons I’ll discuss below and in Part 2 of this article. Consider the following:

1. Insurance companies have professional adjusters who handle their claims for them, and that’s who you’ll be dealing with.

These are trained professionals whose job it is for your case to cost the insurance company as little as possible. And that means for you to receive as little as possible. They are trained in how to handle claims and how to do that. They know that you have not hired an attorney and that you probably don’t want to. The adjuster assumes you are a person who is willing to struggle along on your own without getting the information and help that you need. And that creates the opportunity for you to be taken advantage of.

2. When you are trying to handle something that you are not knowledgeable about or experienced in handling, it’s very stressful.

You are making decisions about your claim without knowing how to properly make the decisions. Should you give a recorded statement to the insurance company? Should you sign the authorizations the insurance company wants you to? Are you including all the items that you can claim for in your case? Are you calculating them the right way? Is the amount the insurance company offering in settlement a fair amount? Should you sign the release they want you to as part of the settlement?

Facing all these decisions without the proper knowledge and information to feel comfortable with the decisions you are making will make most people miserable. Isn’t the peace of mind of knowing it’s being properly handled to protect your legal rights worth something? And if you end up with the same amount of money as you might net with an attorney handling the case, then in essence you’ve just paid for an attorney you didn’t get. Or the peace of mind.

3. When you are trying to handle something that you are not knowledgeable about or experienced in handling, and money is involved, you are likely to be taken advantage of.

Many people do not like to buy a car. Why? Often because the salesman is very skilled at getting you to buy and you are worried about being pressured into buying, but also because you don’t really know which car is best and what is a good price. When you deal with an insurance adjuster, usually you are dealing with a very knowledgeable professional who is trained to persuade you to do what the insurance company wants and, ultimately, to accept a low offer. The adjuster knows “how the system works” and you don’t. How will an adjuster try to take advantage of you? Well, here are a couple of the most common ways.

Insurance adjusters are trained to try and settle cases shortly after an accident for a small amount of money. The goal is to tempt someone who may not yet fully recognize the extent of their injuries and losses into settling cheap. The insurance company wants a quick settlement for a low amount so it can avoid having to pay a larger amount later when the losses are fully known. In the industry, it’s called “flash money”. The idea is to “flash” the prospect of immediate money in front of the injured person in hopes they’ll take it. That’s just one of the ways that insurance companies try to take advantage of injured people.

Another way insurance adjusters take advantage of claimants is the recorded statement. The insurance adjuster knows the right words to use in asking the questions to lead you into saying things using words that have a meaning or effect that you didn’t realize. That type of interviewing is a learned skill.

Many people are shaken up after an accident, and have a fuzzy memory of the events of the accident. There’s a medical reason for this. Often in the whiplash motion that accompanies many impacts, the brain hits against the inside of the skull and affects immediate short-term memory. This is called a “contre coup” injury. (1) Insurance adjusters take advantage of this when they take recorded statements. The questioning may go something like this:

Q: I guess things seemed to happen pretty fast out there when the accident happened.

A: Yes, it’s almost like a blur.

Q: Do you remember seeing how many people were in the other car before it hit you?

A: No, I don’t recall that.

Q: Do you remember seeing the color of the other car before it hit you?

A: No, I don’t recall that.

Q: Do you remember noticing what make and model the other car was before the impact?

A: No, I don’t remember noticing that either.

Q: It sounds like you didn’t notice very much. I guess it happened so fast you didn’t really see the other car before the impact.

A: No, I guess I really didn’t.

What the adjuster knows and you don’t is that Virginia has a rule of law called contributory negligence. Under that rule, even if the other driver is 99% at fault in causing your accident, if you as the injured person are even 1% at fault in a way that significantly contributes to cause the accident, then you lose. You don’t get a dime. And based on your statement, the insurance company will argue that you are partly at fault too, because you weren’t paying attention since the car was in plain view approaching before it hit you in the side. But the truth is you probably did see it, you just don’t remember because of the type of injury you sustained. But the adjuster knows you don’t know that.

About the Author: Clayton Allen is a Richmond car accident attorney with over 20 years of experience with the Allen Law Firm.

How Insurance Companies Deny, Delay, Confuse or Refuse

The American Association for Justice Reports

Click here to download the full American Association for Justice report.

Here is a snapshot of the report in the Executive Summary:

“The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom line even further.

The current economic turmoil affecting the insurance industry on Wall Street has only made the outlook bleaker for consumers living on Main Street. Insurance companies are likely to demand huge rate hikes and refuse more claims than ever. Some of America’s most well-known insurance companies-the same ones that spend billions on advertising to earn your trust-have endeavored to deny claims, delay payments, confuse consumers with incomprehensible insurance-speak, and retroactively refuse anyone who may cost them money.

This report describes some of the most egregious ways the insurance industry attempts to make money at the expense of consumers. These are some of the tricks of the trade:

Denying Claims

Some of the nation’s biggest insurance companies- Allstate, AIG, and State Farm among others-have denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying Until Death

Many insurance companies routinely delay claims, knowing full well that many policyholders will simply give up. Some have gone so far as to lock paperwork away in safes. Undoubtedly, the most shameful use of delay tactics has been by long-term care insurers, who often take advantage of their policyholders’ age and ill health. In the words of one regulator, “the bottom line is that insurance companies make money when they don’t
pay claims…They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

Confusing Consumers

Insurance contracts are some of the most dense and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted “plain English” laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to. After Hurricane Katrina, insurance companies used obscure “anti-concurrent” clauses to get out of paying claims. Consumers who purchased hurricane insurance and thought they were covered suddenly found the coverage eliminated by an obscure clause they could not hope to understand.

Discriminating by Credit Score

Increasingly, insurance companies are using credit reports to dictate the premiums consumers pay, or whether they can even get insurance in the first place. The practice penalizes the poor, senior citizens with little credit, and those who have suffered financial crisis through no fault of their own. Insurance companies have denied fiscally responsible people who paid their bills in cash, but refused renewals because of a lack of credit history. Others have seen auto rate hikes near 600 percent despite clean driving records after falling on economic troubles.

Abandoning the Sick

Health insurers looking to cut costs have taken to canceling retroactively, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals.” Rescission targets patients in the midst of treatment when they are at their most vulnerable-even cancer patients in the midst of chemotherapy have been targeted.

Canceling for a Call

Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy because the policyholder did as little as inquire about the possibility of making a claim. Many times an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything
in their power to drop the policyholder.