How Insurance Companies Make Money | Everything You Need To Know
Jim Adler | The Tough, Smart Lawyer
By Jim Adler September 1, 2020

You already know the scenario: you’re in your car at a stoplight waiting for the light to turn green. You’re rear-ended because the driver behind you was looking down at his cellphone and didn’t look up in time to see you, or the red light. After making sure everyone is alright and calling the police, you call the other party’s insurance company. They send out an adjuster to take a look at the damage and after a few days stop getting back with you after repeated attempts to contact them. Or, you report the accident to the at fault party’s insurance, but the insurance company says it was partly your fault (which it wasn’t) and declare that you were 25 percent responsible because you “didn’t maintain a proper look-out.” For accident victims that translates to “We, the insurance company, are trying to save money by only paying 75 percent of your medical bills and 75 percent of the costs of repairing your vehicle. So, you have to pay the rest.”

If this hasn’t happened to you, then it’s very likely it has happened to someone you know because unfortunately it’s standard practice in the insurance industry. Insurers are known for trying to pay less or avoid paying at all – that’s how insurance companies make their money. They may offer much less than what you need for car repairs and medical bills, not return your phone calls, or give you a different agent every time you call. Insurance companies will try and minimize your injuries and damagesadd fault where there might not be any or even say your medical costs are exaggerated and tell you they won’t pay what the hospital charged you – leaving you with four to five figure bills to pay. Accidents can be confusing and overwhelming – dealing with insurance companies can make things even more stressful and frustrating. Our personal injury lawyers are here to help make this troubling time easier. Let us handle the heavy lifting. Our clients know we aren’t afraid to take on the big insurance companies, so give us a call today at 1-800-505-1414, or fill out our free case review form.

So, how exactly do insurance companies make money? 

Insurance claims are a claimant’s formal request for compensation.  The cost for your car insurance premium (the cost of your insurance) is lumped together with the premiums of the insurance company’s other clients. By collecting premiums from lots of people, insurance companies are “pooling their risk.” That means that they are spreading the risk that they will have to pay out on claims over numerous people who pay their monthly premiums.

By repeatedly denying, minimizing and ignoring insurance claims, insurers save money by not paying out, while continuing to collect insurance premiums that they turn around and invest for a profit.

  1. Insurers avoid paying two main ways:
  2. Denying as many car accident claims as possible; and
  3. Negotiating as low of a settlement as possible on vehicle damage and bodily injury claims.

What can I do when my, or the at fault party’s insurance company won’t help me?

Not every insurance company will play dirty, but the at fault party’s insurer isn’t looking out for your interests, even if you didn’t cause the accident. You can even damage your own case for compensation by speaking with the at fault party’s insurance company, yourself. They know all the industry games and lingo and will later try and use what you said against you to avoid paying what you’re owed. But if you have a good personal injury attorney representing you on your claim– they know they can’t do that.

Inexperienced attorneys might walk away when insurance companies play hardball, but not us. We also work on a contingency fee, so we don’t get paid unless you get paid. Our payments come out of a favorable settlement or win at trial, but never out of your pocket.

You need to know that you have options and you don’t have to settle for insurance companies lowballing you, avoiding you or falsely accusing you of causing some or all of an accident. Your first move after a car, motorcycle or truck crash should be to get help from an experienced personal injury attorney like Jim Adler.

If your accident happened in Houston, Dallas, San Antonio or somewhere else in Texas – the team at Jim Adler & Associates has the experienced attorneys you need. We have over three decades of experience hammering insurance companies that don’t want to pay what they owe. We are good at what we do, and we make them pay.
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