There are approximately six million car accidents in the U.S. each year. Car insurance, mandated in almost all states, is an insurance policy that covers individuals or companies against the cost of auto-related damages to third parties and their properties.
Founded in 1922, State Farm is the largest car insurance company in the nation. Therefore, if an accident injured you, the other party may have a State Farm insurance policy.
After an auto accident, you may be dealing with pain, medical expenses, and lost wages. Many people find the claims process confusing and stressful. If the driver who caused your crash has State Farm insurance, you probably have questions and concerns about the process. Learn how a personal injury lawyer can support you and your claims below.
How do insurance claims work?
The process begins when an insurance company assigns a claim to a claims adjuster employed by the company. That person’s job is to investigate the accident and determine how much the claim is worth. The insurance company focuses on paying as little as possible on the claim, which keeps the company more profitable. The adjuster works for the insurance company, so their goal is to place a low value on the claim.
However, there is always a chance that the injured person will not accept the settlement offer. The injured person may file a personal injury lawsuit if the case doesn't settle out of court. If that happens and the case goes to trial, a judge or jury will determine who is liable and the damages awarded.
The damages awarded can potentially be very high and may also involve the legal fees and costs associated with a trial. With that in mind, the insurance adjuster tries to settle the case for the lowest amount possible without a lawsuit. On the other hand, State Farm is a large company, and generally, they are not afraid to take a case to trial if necessary.
How does State Farm calculate injury claims?
Most insurance companies use a computer system to do this. State Farm uses a claim estimating software called TEACH to determine their estimate of your claim’s value. The value of the claim is the amount the company offers injured victims hurt by the drivers insured by State Farm. This computer system evaluates an injury victim’s medical records and decides what treatment is necessary and the cost of that treatment. It also calculates lost wages. Finally, it estimates the value of the victim’s pain and suffering.
However, TEACH usually undervalues these losses and calculates settlement offers well below fair market value. This means the offer may not be adequate to cover all the damages and losses suffered by the injury victim.
Factors that affect the claims offer include:
- The severity of a victim’s injuries,
- Medical bills,
- How much medical treatment should be necessary to treat the injuries, and
- What the medical treatment should be
- The long-term effects of the injury
- Pain and suffering, and
- Other adverse effects of the claimant’s injuries.
Some of these losses, such as actual expenses, are relatively easy to quantify. Others, such as pain and suffering, are more subjective. Pain and suffering “refers to the pain, discomfort, anguish, inconvenience, and emotional trauma that accompanies an injury.”
Often, the insurance company resists paying for costs such as future lost income or medical bills without seeing the evidence from the discovery process after filing a lawsuit. Insurance adjusters assess the strength of the injured person's case. If the victim has a strong case supported by evidence, the insurer is more likely to offer a larger settlement. However, if the case is weak, the insurer may offer less. Insurance companies also consider whether the injured person has experienced legal representation.
The policy limits are also an essential consideration. The insurance company will only pay up to the insurance policy’s limits. For example, if the at-fault driver carried $100,000 in liability insurance, the insurance company will not pay more than $100,000. If your damages exceed the at-fault person’s coverage limits, you must pursue compensation directly from them.
How does State Farm Insurance compare to other insurers?
If you were injured in an accident and you or the other driver have State Farm insurance, you need to know more about them. Although data from the National Association of Insurance Commissioners indicated that State Farm had relatively few complaints about auto insurance to state regulators relative to its size, in some cases, injured victims experienced problems with their claims, particularly if they did not have legal representation.
All insurance companies must investigate, negotiate, and settle claims in good faith.
Indications that an insurance company may be using bad faith tactics include:
- Failure to investigate the claim
- Unreasonable delays
- Failure to communicate
- Misinterpreting policy
- Omitting material facts
- Underpaying claims
- Irrational denial of coverage
- Refusing requests for documentation
Getting started with your State Farm insurance claim
Even if the at-fault driver has not reported the accident to their State Farm insurance representative, the injured party may do so. It is best to get the claim process started as soon as possible.
If you are insured with State Farm or in an accident with an individual it insures, follow its claims procedures, timelines, and reporting processes. If you have an attorney, they will contact State Farm for you to begin your claim. Then, State Farm assigns the accident to a claims adjuster.
Typically, they will:
- Review the materials and information regarding your claim
- Ask all involved parties for a recorded interview
- Gather additional information or evidence
Communicating with State Farm
If you are dealing with any car insurance company on your own, the claims adjuster may appear to be sympathetic, caring, and friendly. However, it is essential to understand that the claims adjuster, or anyone working for State Farm, represents their interests, not yours.
Therefore, you should be very careful what you say. Never admit fault or share details about the accident. Answer questions honestly, but do not guess about the answers or volunteer information. The insurance representative may record your communications.
Also, do not share information about your medical condition with the adjuster or sign any medical record release without first consulting an attorney. Your medical history, even if it is not directly related to your accident injuries, can minimize what they offer in a settlement.
State Farm will use any statements, whether or not they record them, as a tool to minimize any future settlement offer. The claims adjuster's job is to ensure that State Farm settles your claim for the least possible amount.
What if the claims adjuster wants a recorded statement?
Soon after a car accident, the insurance company may want a recorded statement. A recorded statement usually won't help you and may damage your claim. An accident is always upsetting. Therefore, never give a recorded statement or answer any questions from the insurance company if you are in pain, taking medication, exhausted, or distressed.
The claims adjuster might tell you a recorded statement is necessary to process the claim. If the claim is with your own insurance company, there may be a “Cooperation Clause” in your policy that requires you to give them certain information. However, if your injury claim is a third-party claim against someone else’s insurance company, you don’t have to submit a recorded statement.
Potentially risky areas of questioning include:
- How the crash happened. Crash victims are naturally upset, so they may not know what happened or they may accept blame even if they didn't cause the accident.
- The nature and extent of the injury. In the early days following a crash, you may not know how badly you were injured and what treatment is necessary.
- Other accidents or claims. Claims adjusters are good at asking leading or open-ended questions about your claims history or anything designed to make you look bad.
The negotiation process
Negotiating an insurance settlement can be an intimidating experience. Many adjusters will begin by making a lowball offer. The idea is to lower your expectations regarding how much compensation you can expect. Therefore, if you attempt to negotiate a settlement on your own, remember that even if they make an offer that sounds reasonable, do not accept an offer without knowing the true value of your claim.
The insurance representative's strategy is first to deny that you deserve any compensation or to minimize what they should pay. For example, they may claim that you were never hurt and are just pretending; your injuries were the result of a prior incident; or claim your doctor provided unnecessary treatment,
An experienced car accident attorney has the skills to negotiate with the insurance company. Your attorney will review their insurance policy and establish that the insured was negligent or reckless. In this way, they can demonstrate the company is financially liable.
It is critical to determine the value of your claim. This process may be more complicated than it sounds. There are some easily quantifiable losses, such as medical expenses and lost wages. But it may take some time to find out how badly you are injured, the anticipated recovery period, and the long-term effects of your injury.
Therefore, your claim may involve future medical expenses, lost income, pain and suffering, and other ways your injury will affect your life in the future. It is more difficult to put a price tag on these types of damages and may involve medical or economic experts. Your attorney has the skills and resources to decide how much money you need now and in the future. The attorney generally sends a demand letter, asking for as much compensation as you need, up to the policy limit.
The insurance company will almost always disagree with the amount requested and respond with a lower settlement offer. Your attorney and the insurance company will probably go back and forth many times while negotiating a settlement or the insurance company resists negotiating. That is why an attorney will often file a personal injury lawsuit to show that you are serious about pursuing your claim and moving matters forward.
Get the compensation you deserve from State Farm.
There are steps you can take following an accident to ensure the best possible outcome for your claim and receiving compensation, such as:
- Call for help. The police report contains essential information about the crash.
- Seek medical attention. Even if you do not believe you were injured or that your injuries are minor, a medical report immediately after the accident sustained any injuries is essential to establishing the value of your claim.
- Keep detailed records of all bills and expenses related to the accident. Documentation of your medical expenses, lost income, and any other expenses help establish your damages.
- Keep a journal. An accident may happen in a minute, but it is far from over. Also, as time passes, you may forget the small details of your pain and medical treatment. Keeping a written record of your injuries, recovery, and every way your injury has disrupted your life helps prove your losses.
When you need a lawyer
In most cases, if you were in an accident, you need a lawyer to review your case and advise you of your legal options. In general, the more severe your injuries, the more you need a lawyer. A personal injury lawyer will handle all communications with State Farm and can negotiate a settlement on your behalf.
Settlement offers from State Farm almost always increase substantially once the injured person retains a lawyer because it becomes clear they will not simply accept a low offer to avoid a lawsuit. If the case goes to trial, your lawyer will zealously represent you in court. Contact us today to receive a consultation and how Nicolet Law can get you the results you desire.