If your life is devastated when another car or truck comes out of nowhere and broadsides your car, severely injuring you and changing your daily routines forever and causing you to incur hundreds of thousands of dollars in medical bills, lost profits and lost opportunities, you would expect the insurance company of the driver who hit you to pay those bills, right? 

When Roxanne Martinez was hit by an SUV on the passenger side of her car, she was severely injured.  Her medical bills quickly accumulated and she thought Allstate, the insurer of the driver who hit her, would pay for her injuries. Three years later after incurring massive doctors bills and a list of medical problems, Roxanne was still fighting Allstate. The company finally offered her $15,000, a sum that did not cover her expenses, much less her pain, lost wages, or the emotional anguish of not knowing whether or not she would be able to afford her treatment.

This tactic is part of a strategy insurance companies are using to save themselves from paying billions of dollars in honest claims. CNN’s year-and-a-half investigation into the insurance industry found that if you are injured in a minor accident, major insurance companies will likely challenge your claim, drag you into court, and take years before making you an offer. This offer is often significantly less than your claim is worth.

Industry insiders say this results in 80% to 90% of injured victims capitulating and accepting what the insurance company offers instead of fighting for what is right.

Why would an insurance company, especially one that you  trust and have given significant amounts of money to over the years to take care of you in the event you’re injured, act with such reckless disregard toward your personal well-being? The answer is simple: Insurance companies answer to stockholders.  They take from the poor and give to the rich.  If they pay you less money for your injuries, even if you need the money to cover necessary medical bills, lost wages, and rehabilitation, they make their stockholders a lot of money and that is the bottom line.  

According to a Nevada insurance law professor, accident victims are getting hurt further by being dragged into court by insurance companies. Other policyholders aren’t seeing any benefit, such as reduced premiums, when Allstate or State Farm takes someone who needs money for their  injuries to court. This practice isn’t saving the consumer money at all. In  fact, the only real beneficiary of keeping money from the people who need it are the insurance companies themselves. One law professor has stated, “To continue this kind of program is, in my view, institutionalized bad faith.” These insurance  companies seem to believe their money is better spent dragging someone hurt who needs insurance money for their injuries through court instead of helping them pay their bills.

Both Allstate and State Farm would not discuss the investigation’s results with CNN.  Jim Mathis, a former insurance company insider, told CNN, “As long as the public allows this to occur, insurance companies will get richer, and people will not get a fair and reasonable settlement. Period.”

The math behind the insurance companies’ strategy is simple: Take $1,000 off of 1 million claims and you’ve essentially made $1 billion. Do this with every claim over a number of years and you’ve made billions of dollars.

Insurance companies achieve this cost cutting through a process known as the “Three Ds:” Deny the claim.  Delay the claim.  Defend their denial of the claim.

By forcing take-it-or-leave-it offers years after the actual accident occurred, battles have already been fought, bills have added up, and people are afraid that they won’t get any money for their claims, insurance companies hope to essentially force an  injured victim to accept whatever it is they’re offering. This tactic preys on the fear of a car accident victim who wonders if there will ever be any justice in a system that seems to be a money machine for the big insurance company at the expense of the little guy. Some people lose hope altogether and throw their hands up.  That is exactly what the insurance company wants.

One trial court judge told CNN that many insurance company lawyers have confided in him that they want to settle many of these minor impact cases, but the insurance companies won’t allow them to. The insurance companies would rather fight every claim, even though that means not giving their paying customers the money they need to heal and get back to their lives.

A lawyer for Allstate said that the company’s strategy was to drive lawyers who represent victims out of the insurance industry. The company tried to accomplish this by making the act of fighting a claim “so  expensive and so time consuming that lawyers would start refusing to help clients.”

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