Challenging State Farm: Your Guide To Disputing Auto Insurance Claims

Disputing an auto insurance claim with State Farm can be a challenging process. As the largest auto insurance provider in the United States, State Farm handles a significant number of auto accident cases each year, and their claims adjusters are known for making low initial settlement offers. Dealing with State Farm on auto accident claims can be frustrating, as they often require legal action to be initiated before offering a fair settlement. Additionally, State Farm is more willing to take cases to trial compared to other insurance companies, making it crucial to have competent legal representation when disputing a claim. To maximize your chances of a successful dispute, it is important to document the accident scene, seek immediate medical attention, delay settlement discussions until you understand the full extent of your injuries and required medical care, and refrain from signing any medical authorization forms or admitting fault.

State Farm's initial settlement offers

State Farm's first settlement offer will likely be much lower than the estimated damages you have suffered. They will try to discount your claim by assessing what they believe to be "reasonable" expenses and providing very little extra for pain and suffering damages.

If you have received an initial settlement offer from State Farm, it is highly recommended that you consult a personal injury attorney who can explain your rights, value your case, and handle the process for you. An experienced attorney will know State Farm's weak spots and how to negotiate a higher settlement amount.

You can also do the following to help your case:

• Gather evidence, prove fault and damages.
• Calculate the expenses and get the highest possible settlement.
• Do your homework and be prepared to explain the reason for your injury claim.
• Save all medical bills, receipts, and written repair estimates.

Settlement offer increases after a lawsuit

When dealing with State Farm Auto Insurance, it is advisable to get an attorney involved early in the process, especially if there are significant injuries or disputes over vehicle value in your auto claim. This can help preserve evidence of liability and damages that may otherwise be lost or distorted, leaving you with a weaker case if a lawsuit needs to be filed.

State Farm's initial settlement offers are often "lowball" amounts, and their adjusters tend to be aggressive in requesting recorded statements that can later be used against the claimant. An attorney can help negotiate a fair and reasonable settlement amount on your behalf and guide you on your next steps.

Upon commencement of litigation, the settlement offer from State Farm tends to increase, especially as the trial date approaches. This is because, like most insurance companies, making a settlement offer is usually a business decision, and the costs of proceeding with a trial often outweigh the benefits of "playing hardball".

• Example 1: A client was involved in a major side-impact motor vehicle accident with multiple fractures to his femur that required surgery. State Farm made no offer before a lawsuit was filed. After a mediation resulting in a mid-five-figure offer, which was rejected, the claim was litigated up to three weeks from the trial. Ultimately, a six-figure offer was made and accepted.
• Example 2: A client was hit from behind at high speed, resulting in a total loss of his vehicle. State Farm claimed that his injuries were pre-existing due to his age. They offered nothing before a lawsuit was filed. After approximately a year of litigation, they offered $30,000 to settle the claim, which was rejected. The case went to trial, and the jury awarded the plaintiff almost twice the amount offered by State Farm (approximately $58,000).

These examples illustrate the importance of competent and aggressive legal representation when dealing with State Farm, the nation's largest auto insurance carrier. Without legal representation, it is almost impossible to obtain fair compensation for a personal injury claim.

State Farm pushes hard on small claims

State Farm is the largest auto insurance provider in the United States, with over 30 million policies written annually and an 18% share of the US auto insurance market. When it comes to auto accident claims, State Farm is one of the most challenging insurers to deal with, particularly for bodily injury claims.

State Farm has a reputation for pushing hard on small claims. Adjusters often take a tough stance, presenting very low initial settlement offers and challenging claimants to pursue legal action if they are not satisfied. Small-value injury claims are often handled by a "team" of adjusters who operate with limited authority and focus on minimising costs by vigorously disputing minor claims.

The company's adjusters use a computer program called TEACH (Total Evaluation and Claims Handling) to assess the value of claims. This program is designed to automatically undervalue claims by applying predetermined parameters that result in reductions across various expense categories. For example, TEACH offers predefined estimates for medical treatments based on injury types and automatically discounts any expenses that exceed those estimates. This often leads to lowball offers, especially for small claims, as the adjuster teams have limited authority and focus on cost-cutting.

State Farm's strategy for small claims can be frustrating for claimants, requiring them to expend additional time and resources to pursue legal action. It is advisable to consult an attorney early in the process, especially for significant injury claims, to help preserve evidence and strengthen your case.

State Farm's willingness to go to trial

State Farm is one of the largest auto insurance carriers in the US, writing over 30 million car insurance policies a year. The company has an "in-house counsel" arrangement to litigate most auto accident claims. This means that they pay a salary to their lawyers, and are therefore not paying them by the hour. This can work for and against the injury victim. On the one hand, in-house attorneys are less likely to want to take every case to trial and are more likely to provide a "voice of reason" to the claims settlement negotiation process. On the other hand, if the claims adjusters want to "dig in their heels", they will likely refuse to settle.

State Farm, like most insurance companies, wants to pay out as little as possible. They charge premiums, which most customers pay monthly, but then try to avoid paying out claims when people need help. This is how they make their profits. State Farm's net worth grew by more than $10 billion in one year.

State Farm has been known to use the "Three D" approach: "Deny, Delay, and Defend", particularly on claims they consider lower impact. They fight back as hard as possible against people making accident claims, which increases their profit margins. This makes it very hard for injured accident victims to pursue fair compensation, and many people give up the fight and settle for low offers.

State Farm will often try to stall, knowing that the victim's medical bills are piling up and they are unable to work. They drag out the claim process, waiting until they know the victim is desperate and will accept any offer to alleviate their financial hardship.

State Farm will also try to talk you out of legal representation, swooping in with a settlement offer that is far less than you deserve and telling you that hiring a lawyer will only reduce the amount of money you receive. However, in most cases, having legal representation results in significantly more compensation for victims, even after factoring in attorney fees.

How State Farm calculates the value of injury claims

State Farm uses a computer program called TEACH (Total Evaluation and Claims Handling) to assess the value of claims automatically. When entering details like injury type, medical treatment, and bills into TEACH, the adjuster initiates the calculation process.

TEACH then processes this data using predetermined parameters to determine the claim’s worth. These parameters often result in reductions across various expense categories. For instance, the software offers predefined estimates for required medical treatments based on injury types and automatically discounts any expenses exceeding those estimates.

This program and programs like it are designed to evaluate medical reports, treatment costs, and other data relevant to personal injuries sustained during an accident. The software often includes algorithms that help adjusters assess the severity of injuries, estimate reasonable medical expenses, and determine compensation for pain and suffering.

Primarily designed to undervalue claims, TEACH frequently leads to the issuance of lowball initial settlement offers by State Farm adjusters. Moreover, it poses challenges in seeking compensation for future losses like lost wages or medical expenses, as the software only factors in expenses or losses that have already occurred.

State Farm determines settlement amounts in personal injury claims by evaluating several factors that influence the overall severity and impact of the bodily injury. First, they assess the medical expenses related to the bodily injury, considering both current and future medical needs that may arise from the injury. This includes hospital bills, costs for physical therapy, and any long-term care needs. This is a big settlement value driver because the medical costs are not only compensable dollar-for-dollar but they serve as a marker for pain and suffering damages.

Secondly, State Farm considers the extent of the bodily injury in terms of its impact on the claimant’s ability to work and perform daily activities. This includes lost wages, diminished earning capacity, and the potential for ongoing disability.

Lastly, they factor in non-economic damages, which cover pain and suffering, emotional distress, and loss of enjoyment of life resulting from the bodily injury. These calculations are based on the severity of the injury and its long-term consequences on the individual’s life. By combining these evaluations, State Farm arrives at a settlement amount it thinks fairly compensates the injured party for their losses.

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