Consider the following hypothetical: You are in a car accident and it is
the other driver's fault. You make a claim with the other driver's
insurance carrier, Allstate Insurance, which promptly sends you a flier
entitled "Do I Need an Attorney?" The flier extolls the benefits
of not hiring an attorney in negotiation and settlement of your claim.
The flier states that claims are resolved faster without attorneys and
Allstate will treat you as if you are their "customer" (thus
ignoring the inherent conflict of interest), you should sign authorizations
allowing Allstate to obtain your medical records, and that Allstate will
conduct prompt investigations on your behalf.
Initially, you are receptive to the idea, and believe that you are fully
capable of handling it without an attorney. Plus, the Claims Representative
is nice and seems to be looking out for your best interests.
Then, in your research, you discover something that Allstate won't
tell you: the "nice" Claims Representative has been trained
with a series of telephone scripts and form letters aimed at convincing
you not to hire an attorney. He has been taught to speak to you with empathy
in order to gain your trust and make you feel as if Allstate will be your
advocate, not your adversary (which is the reality of the relationship).
In fact, you even discover that the Claims Representative will be rewarded
with a bonus if you do not hire an attorney.
Allstate's actions beg the question: Why are they putting so much effort
into discouraging accident victims from hiring an attorney? The reason
is pure and simple, and hardly surprising: so that Allstate can pay you
less money. And that's not just the opinion of a trial attorney that's
based on a 1995 Allstate internal training document, which contains statistics
demonstrating that when lawyers represent claimants, the settlement is
two to three times higher than when claimants represent themselves. According
to the manual, in settlements under $15,000, claimants without attorneys
averaged $3,464. Those with counsel averaged $7,450. Even with the standard
33% attorney fee contingency, claimants make out much better having legal
representation. But Allstate won't tell you that.
Allstate's tactics are deceptive, illegal and spawned lawsuits in several
states on behalf of deceived claimants. A judge Pennsylvania stated: "without
the benefit of an attorney to review the documents, the claimant could
lose any benefit in a settlement and the information could be used against
him or her if the matter went to litigation." The judge concluded
that Allstate's activities were willful and designed to boost its
bottom line by urging victims to forego legal representation. In litigation
in Connecticut, Allstate's attorney unbelievably argued that Allstate
has no legal duty "to settle fairly with third-party claimants"
despite what it tells them.
What's the lesson? In all matters involving an insurance claim, never
deal directly with the insurer without first consulting an attorney. Their
adjusters are professional negotiators trained to get you to forgo your
legal rights and ultimately accept less than you may be entitled to and
regardless of what they tell you, it is their "bottom line"
not yours that they will protect.