When accident attorneys seek compensation for their clients, they almost always have to deal with insurance companies.
Car accident attorneys dealing with insurance companies is the norm rather than the exception. Because of this, car accident attorneys have plenty of strategies for getting an insurance company to pay up. But why does it sometimes take an attorney to make an insurance company pay up? And what does insurance have to do with lawsuits?
Defendants Rarely Pay, Insurance Companies Do
As you may already know, defendants in car accident and other personal injury lawsuits usually do not pay for any judgments or settlements against them out of their own pocket. Rather, it’s an insurance company. Even large companies with lots of cash rely on insurance coverage to help pay for legal judgments and settlements against them.
So when a defendant must pay a judgment or settlement amount to a plaintiff or group of plaintiffs, the money is usually coming from an insurance company. And of course, there are situations where the policyholder tries to get his or her own insurance company to pay for injuries and damages before filing a lawsuit. But sometimes an insurance company doesn’t pay up when they should. However, it’s not always for the reason most people think.
How Insurance Companies Make Money
Most people think an insurance company makes money by collecting premiums from policyholders and doing everything they can to avoid paying any claims. This is only partially true. As a general rule, insurance companies make far more money off their investments than refusing to pay valid claims.
Yes, insurance companies make money when they collect premiums and don’t use that money to pay for claims. However, taking a large chunk of cash and investing it will make them far more money (while avoiding bad publicity) than refusing to pay out a large number of valid claims.
Also, put yourself in an insurance company’s shoes. You have control of a bank account worth a lot of money. An attorney sends you a letter explaining that you need to pay $100,000 under a specific insurance policy you issued.
You review the claim file and see that the attorney may be correct, but there’s a chance the attorney is mistaken, and you don’t have to pay anything or perhaps you only need to pay $50,000 instead. Or maybe you could get away with paying nothing!
Are you going to agree with that attorney and pay $100,000? Probably not. You’re going to ask the attorney for more information and do your own research before you agree to pay the full $100,000.
The above hypothetical makes up the majority of situations where insurance companies don’t pay up as they “should.” So it takes an attorney to explain the situation and convince the insurance company why it should pay $100,000 instead of $50,000 or even $0. Personal injury attorneys, such as those who work in car accident cases, get many opportunities to do this. And in a situation where it’s clear what the insurance company must pay but they refuse is far less common than you might think. Those types of cases and situations happen, but not that often.
Schedule your complimentary consultation with the Wilbanks Law Firm, P.C. with one of our accident attorneys by calling [nap_phone id=”LOCAL-REGULAR-NUMBER-2″] now. We can help you deal with insurance companies and encourage them pay what you’re rightfully due.