Auto Insurance Companies Don’t Accurately Calculate Car Accident Expenses

Key Points:

• After a car accident, the at-fault driver’s insurance company is responsible for paying the victim’s costs. The accident costs—or compensatory damages—include economic as well as noneconomic losses. 
• Noneconomic costs can be harder to determine because they include intangible losses such as pain and suffering and diminished quality of life. 
• Because pain and suffering can be challenging to quantify with an exact number and cannot be directly proven with bills and receipts, the insurance company will likely not consider this cost in a settlement offer. 
• In certain circumstances, you may also be entitled to recover punitive damages. However, the insurance company will likely not pay punitive damages unless you have an experienced car accident attorney fighting for you. 

If you have been hurt in a car accident, you may feel stressed and overwhelmed by the financial toll on you and your loved ones. When you are injured through no fault of your own, it is reasonable to expect the person who caused the accident to pay the costs. After all, why should you have to pay out of your own pocket for someone else’s negligence?  

Unfortunately, the auto insurance companies that are supposed to cover your losses are looking out for their best interests—not yours. That means they will do everything possible to avoid paying full compensation for claims. To save money, they avoid offering a settlement that accurately calculates your accident expenses because they know they can get away with it, unless you have an experienced car accident attorney handling your claim. 

Are Insurance Adjusters Responsible for Inaccuracies in Estimating the Costs Associated with Car Accidents?

Insurance adjusters are important when it comes to figuring out how much money should be given for car accident damages, based on what the insurance policy says. They need to be skilled and have enough experience to make accurate estimates, but sometimes it’s tough because car damages can be complicated and not all information might be available right away. Also, since they have to follow the rules set by their insurance company, there might be limits on how much they can say needs to be paid out. They also have to watch out for any fake claims that could mess with the accuracy of their estimates.

Despite their best efforts to be fair and accurate, adjusters have to juggle the needs of the person with the insurance, the insurance company itself, and the laws that regulate them. This can make things tricky. However, if there’s a disagreement about the damage estimate, the person with the insurance isn’t stuck. They can give more information to support their case, ask for another look at the damages, or get an opinion from an outside expert. It’s all about communicating clearly and providing the right documents to help sort out any issues, aiming for a fair outcome that matches what the insurance policy covers.

Insurance Companies Do Not Consider Paying for Pain and Suffering 

After a car accident, the at-fault driver’s insurance company is responsible for paying the victim’s costs. The accident costs—or compensatory damages—include economic as well as noneconomic losses. Georgia law provides for both types of costs so that the victim can be made whole after the accident.  

Economic costs such as medical expenses, vehicle repairs, and lost wages are easier to quantify and prove because there are bills and other records documenting them. Noneconomic costs can be harder to determine because they include intangible losses such as pain and suffering and diminished quality of life. If you suffer serious injuries, your insurance settlement should account for the physical pain and emotional distress caused by the accident.  

Though pain and suffering can be difficult to calculate, you are typically entitled to more compensation when your injuries require multiple medical treatments and/or lengthy rehabilitation. If you suffer disfigurement, post-traumatic stress disorder, or are unable to participate in your regular activities, those losses should be included in your settlement. 

Because pain and suffering can be challenging to quantify with an exact number and cannot be directly proven with bills and receipts, the insurance company will likely not consider this cost in a settlement offer. Insurance carriers make money by keeping payouts as low as possible, so they try to reduce or deny any expenses that are not supported by documentation. While it is hard to deny a hospital bill, insurers often argue that pain and suffering either does not exist or is only minimal.  

Insurance adjusters know that the average person has no way of knowing, much less proving, how much their pain and suffering is worth in terms of dollars. In cases where the injuries are serious, the insurance company may offer the victim a quick settlement that does not account for pain and suffering so they can avoid a large payout later. Many people accept the offer without understanding what their case is worth, which means they receive little to nothing for their noneconomic losses. 

Do Insurance Companies Avoid Paying Punitive Damages Unless a Lawyer Is Involved? 

In a typical car accident negligence claim, the insurance company is only required to pay compensatory damages. However, if there are aggravating circumstances or the at-fault party’s behavior is considered egregious, the victim may also be entitled to punitive damages.  

To award punitive damages, the at-fault party must have exhibited “willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.” O.C.G.A. § 51-12-5.1(b). In Georgia cases, punitive damages are often awarded in car accidents involving driving under the influence (DUI) of alcohol or drugs, reckless driving, or intentionally causing a crash. 

Unlike compensatory damages, which are meant to cover the victim’s losses, punitive damages are intended to both punish the at-fault party and deter others from engaging in similar conduct. In Georgia, punitive damages are capped at $250,000 unless the injury was caused by 1) product liability, 2) intentional conduct, or 3) DUI. O.C.G.A. § 51-12-5.1. If the case meets one of these exceptions, the jury is free to award any amount of punitive damages it sees fit. If the jury award includes punitive damages as well as compensatory, the insurance company is obligated to pay the entire amount.  

However, the insurance company will not offer you money to punish itself or its insured. To recover punitive damages, your attorney will need to specifically demand it as part of your settlement. Just as noneconomic damages can be difficult to quantify, knowing the appropriate amount of punitive damages for your case can also be challenging.  

An experienced car accident attorney can review the facts of your case to determine whether you are entitled to punitive damages. When your attorney sends a strong demand letter, the insurance company is more likely to agree to max out the policy limit to cover the damages. If the insurance company refuses to exhaust the policy to pay punitive damages, it may end up paying far more than the policy limit when your attorney takes the case to trial. 

Insurance Companies Avoid Explanations 

After a car accident, the at-fault driver’s insurance company will look for ways to reduce or deny your claim, often using deceptive tactics. One of these tactics is offering you a check almost immediately after the accident that does not include a detailed explanation of the covered costs. When an insurance company does this, it is relying on the assumption that you do not yet understand the full value of your claim. 

If you suffered serious injuries, it takes time to get the complete picture of your costs, including physical and emotional recovery, follow-up medical treatments, ongoing care or rehabilitation, and lost earnings. When you accept an offer before you know what you are facing, you will likely end up paying the costs out of your own pocket. 

Insurance adjusters handle enough car accident cases that they typically know when a claim is high value, but they keep that information to themselves so you will accept a lower offer. By not providing an explanation for the offer, they make sure you do not understand what costs are being left out. Not giving details also makes it hard for you to make a counteroffer because it is not clear what expenses are covered. 

A quick settlement offer without a specific explanation also allows the carrier to pay the claim without admitting to the reasons it is paying. If the insurance company detailed the reasons for its offer, it could be seen as an admission of fault, which may be a problem if the case goes to trial.  

Before accepting a check, keep the following in mind:  

• Settlement offers are negotiable.  
• You have the right to question the insurance company’s explanation.  
• You should keep copies of all communications with the carrier, including offers and counteroffers.  
• Hiring an experienced attorney can help you understand the full value of your claim, gather all necessary documentation, and negotiate for a fair settlement. 

Insurance Companies Avoid Reviewing Medical Bills 

If you are injured in a car accident that was not your fault, the at-fault driver’s insurance company is responsible for paying your medical costs. However, in Georgia the at-fault driver’s auto insurance company does not pay your medical bills on an ongoing or as-incurred basis. Instead, you must pay for or cover your medical costs as they come due. 

Generally, the way it works is that your health insurance company will pay your medical bills according to the terms of your policy, then it may be reimbursed later from your settlement or verdict through insurance subrogation. Whether an insurance company enforces subrogation depends on the type of policy you have. 

In other words, the at-fault driver’s auto insurance company does not receive medical bills directly from the doctor or hospital. That means it may not review your medical treatment until long after you receive it. Medical bills often take weeks to come in, so it takes time to understand the full picture of your injury costs. Simply explaining your injuries and treatment to the insurance adjuster is not enough to accurately calculate your costs. 

Even though the adjuster may have an idea about the severity of your injuries, any quick payout they offer you will likely not account for all your current and future medical treatment. Unless all your medical treatment is covered, your settlement will be less compensation than you deserve. 

Insurance Companies Will Try to Claim You Are at Fault 

Another way the insurance company can avoid paying full compensation for a claim is by blaming you for the accident. Georgia is a comparative negligence state, which means that you can still recover damages for your injuries as long as you were not at least 50 percent at fault. However, if you were partially at fault, your damages will be reduced by the percentage of fault attributed to you. O.C.G.A. § 51-11-7. 

For example, assume that a driver caused an accident because they failed to yield at an intersection and hit an oncoming car, which was traveling 10 miles over the speed limit. In this situation, a court may find that the driver who failed to yield was 80 percent at fault, while the driver who was speeding was 20 percent at fault. If the driver who was 20 percent at fault filed a claim against the other driver’s insurance company for $100,000 in costs related to their injuries, they would only be entitled to recover $80,000. 

If the insurance company can reduce its payouts to claimants by 30, 20, or even 10 percent, it saves a great deal of money over time. Because insurance companies can save money by trimming a percentage off the payout, adjusters will look for any small fact or mistake to justify apportioning fault to the injured victim. 

Mistakes they will use can include traveling a little over the speed limit, not using a turn signal when switching lanes, or making statements implying you might have done something wrong when speaking to witnesses or the insurance adjuster. Your attorney can help you avoid making mistakes that can hurt your case and gather evidence to prove that your actions would not have changed the outcome of the accident. 

Insurance Companies Prefer to Pay Partnered Vendors Directly 

If you cause an accident and file a claim against your own insurance policy, your carrier has the right to pay whomever they deem necessary to settle your loss. That means they can issue a check directly to a repair shop and may insist that you have your car repaired at one of the insurer’s preferred vendors (depending on the terms of your policy). The amount they pay directly to a vendor reduces the check that you will receive. 

However, if you did not cause the accident and the at-fault party’s insurance carrier is responsible for payment, you are under no obligation to use the carrier’s preferred vendors because you are not bound by any contract. That means the carrier cannot dictate who it pays the money to for your claim. 

Regardless, insurance companies will still encourage you to use one of their preferred repair vendors, and they work hard to have relationships with vendors that people are likely to use after a car accident. If you use one of the carrier’s preferred vendors, it may pay the repair bills directly to them rather than to you, which can make your settlement check smaller.