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August 4, 2022

Former Insurance Adjuster Turns Personal Lawyer - Absolute Nightmare for Insurance Companies

If you've been injured in an accident, you're probably looking for the best personal injury lawyer you can find. You may have heard that a law firm with a former insurance adjuster on staff is the ideal choice. But what you may not know is that this is an absolute nightmare for insurance companies! Insurance adjusters are skilled at minimizing payouts, but they often lose when they're up against the strategies used by a personal injury attorney.

Let's take a look at how using a law firm with a former insurance adjuster on staff can help you get the best settlement possible.

Benefits of a Former Insurance Adjuster In Claims Management

Insurance adjusters are responsible for preserving the financial stability of their company. They are the first point of contact for people who have experienced a disaster and need to make a claim. Insurance companies are in the business of making money. They want to keep as much of that money as possible, so adjusters will do whatever it takes to avoid paying out claims when they can get away with it.

Claims management is a process of managing the occurrence of a loss and starts with the reporting of an event, like an accident, and ends with the settlement or payment for the loss.

Strategic risk management insurance adjusters are hired for their claims management skills which go into the pre-litigation and litigation stages.

They want to pay their insurance adjusters and attorneys rather than the injured claimant. This is because claims come out of the bottom line when paid out, while lawyers are a tax deduction and expense.

Once the money runs out for insurance defense attorneys, they will settle to halt expenses. 

When your personal injury lawyer is skilled in insurance claims, insurance adjusters are more likely to settle with them. Insurance companies will not want their reputation tarnished by a long and drawn-out trial, so they would prefer settling out of court rather than taking on a personal injury lawyer who has insurance industry experience.

A Personal Injury Lawyer Uses Adjuster's Own Strategy Against Them

The insurance adjuster is responsible for minimizing payouts. They use information gathered from insurance companies, medical records, and other sources to determine how much should be paid out on each claim. Insurance adjusters also try to convince claimants not to hire a lawyer by telling them that they can get more money without one or even threatening litigation if they do hire an attorney.

Suppose insurance adjusters are successful in convincing claimants not to hire lawyers. In that case, insurance claims can be settled for much less than what they should be worth because insurance companies know that someone who doesn't have legal representation on their side will not know how to seek proper compensation. The insurance adjuster has a lot more power when dealing with an individual who doesn't have a lawyer.

However, when insurance adjusters are up against their own strategies employed by a personal injury attorney, they often lose.

That's because a personal injury attorney with experience in the insurance industry knows how to use the insurance adjuster's tactics against them. They understand what an insurance company does to lower the payout. They use this knowledge to gather as much information about the claim as possible and prevent insurance adjusters from getting away with anything.

An attorney will also work hard to negotiate fair compensation for you, ensuring that insurance companies understand they must pay out more money because if they don't, your personal injury lawyer will file a genuine lawsuit. Therefore, the insurance company will acquire further expenses than simply paying out.

Insurance adjusters have time on their side; the Texas personal injury statute of limitations is specified in the Texas Civil Practice & Remedies Code. It states that any civil action for "personal injury" must be filed within two years after the date that "the cause of action accrued," or two years from the date of the accident that resulted in the harm. Insurance adjusters know this and may take their time when negotiating a settlement.

On the other hand, your personal injury lawyer knows how to use this against insurance adjusters. They will work quickly to gather all of their information and file a lawsuit if negotiations break down.

This can be an absolute nightmare for insurance companies who are used to dealing with claimants who don't have legal representation. Having a former insurance adjuster as your personal injury lawyer gives you the upper hand in negotiations and ensures that insurance companies pay out what they should for your claim.

Why do Insurance Companies Have Such High Reserves?

In terms of insurance, a reserve is a sum of money held by an insurance company to meet its future commitments and obligations to its policyholders. In other words, insurance companies have to pay out insurance claims, so they make sure that they have enough money on hand to cover any damages caused by an incident. One thing insurance companies do is keep a lot of money in reserve. That way, if something happens and they have to pay out a lot of claims at once, they won't go bankrupt.

Claims can be complex for insurance adjusters who work for companies with high reserves because their job is more challenging when fewer funds are available. This is why insurance adjusters are always looking for ways to minimize payouts because it's good for the company's bottom line.

An insurance company typically has a 3:1 reserve ratio. This means that for every $3000 in liabilities, the company has $15000 set aside to cover costs. The company would rather pay its attorneys than the injured claimants since doing so results in less significant financial losses (e.g., tax deductions and expenses).

Furthermore, insurance firms must maintain a reserve equivalent to the worst potential outcomes to plan for even the worst of events. 

This is why insurance companies have higher reserves than other types of businesses.

When insurance adjusters can get away with not paying out insurance claims, they do it. For this reason, it is crucial to have an experienced personal injury lawyer on your side who knows how insurance companies work and will make sure you receive the compensation you deserve.

The Stowers Doctrine

The Stowers Doctrine is a legal principle that holds insurance companies liable for the bad faith conduct of their adjusters.

This means that if an insurance adjuster does something wrong- like denying a claim without a legitimate reason (bad faith conduct) or trying to lowball a claimant- the insurance company can be held responsible.

Stowers Demand letters, a peculiar type of litigation in Texas, have been used for decades to force insurance carriers to pay the policy limits on a claim. This tricky and somewhat complex law issue is not new to insurance companies. This doctrine stemmed from 1929's G. A. Stowers Furniture Co. v. American Indemnity Co. This simple case started with an insurance company deciding not to pay the total amount owed and has since become the most expensive rear-end in Texas history.

A Stowers Demand is a form that plaintiffs' lawyers in Texas often send to insurance companies to force them to either pay the policy limits to settle the claim or face exposing their insureds and themselves to a potentially higher verdict. This allows insurance companies to make things right with injured claimants and avoid being held liable for delayed or denied insurance claims. It also prevents insurance companies from retaliating against insurance adjusters who point out such behavior. 

By hiring a personal injury lawyer with experience in insurance coverage, you will know how to apply the Stowers doctrine to your advantage. Doing this may provide an extra benefit to your case.

Are Insurance Payouts Tax Deductible?

Typically, you won't pay tax on the money you receive due to an insurance claim or settlement. The IRS taxes your income, defined as money or payment received that boosts your net worth above what it was previously.

The purpose of insurance is to help you after something bad happens. This means that you should only get money from the insurance company to fix what was damaged or to help to put you back into the same place as before the bad thing happened. 

However, there are exceptions. There are some types of insurance claims that are still taxable. Some insurance payments will be taxed like any other source of money. Your taxable income, for example, would be $60,000 if your yearly earnings are $50,000 and you received an insurance payout of $10,000.

The payment made to the beneficiary of a life insurance policy after the insured person has died is not taxed. If you receive insurance money for lost wages or earnings, the insurance payment is considered income and must be reported to the IRS.

When your insurance claim turns into a lawsuit, the tax implications become more complicated. Because you may receive several distinct sorts of compensation that will be taxed in various ways throughout the process, it's essential to contact an experienced attorney immediately. In a lawsuit, none of the money you receive is taxed. Compensation for medical expenses and property repairs is not taxed.

The IRS does not tax pain and suffering, emotional distress, or any other non-economic damages in a personal injury case. The money you receive for lost wages is taxed as income, just as it would be if you received the insurance payment outside of a lawsuit. You may also be taxed on punitive and other damages that do not stem from physical injuries.

When insurance companies have to pay out insurance settlements, it comes out of their bottom line. This is one reason why insurance adjusters are always looking for ways to minimize payouts. 

What is the Benefit of Using a Personal Injury Lawyer who Worked in Insurance?

Injury lawyers with insurance industry experience are better equipped to deal with insurance company claims. They understand how to confront insurance company tactics and change their approach as needed. They are more likely to know how to negotiate a fair settlement because they understand what they're looking for. 

If you have been injured in an accident, seeking legal representation is vital. A personal injury lawyer can help you get the money you deserve for your injuries. You also want an attorney who will go to bat for you and make sure insurance companies pay out what they should.

You don't have to deal with intimidating insurance adjusters on your own. Speak to a personal injury lawyer before deciding whether or not to take legal action. 

Mr. Charles Sanders is the co-founder and partner of Rose Sanders Law Firm, PLLC. Previously, Mr. Sanders worked for Allstate as a bodily injury and flood adjuster. He understands how insurance companies operate, which allows him to negotiate with insurance adjusters on his client's behalf more effectively.

Mr. Sanders has seen first-hand and dealt with the unscrupulous and deceptive tactics that big insurance firms use against injured claimants, as well as their insured consumers.

Do you have any questions for Mr. Sanders or one of our experienced personal injury lawyers? Contact us today.


Rationale

Insurance adjusters are skilled at minimizing payouts, but they often lose when they're up against the strategies used by a personal injury attorney. Therefore, it’s the best choice to go with a personal lawyer who used to be an insurance adjuster!

Having a former insurance adjuster as your personal injury lawyer gives you the upper hand in negotiations and ensures that insurance companies pay out what they should for your claim.

If you have been injured in an accident, seeking legal representation is vital. 

Mr. Charles Sanders is the co-founder and partner of Rose Sanders Law Firm, PLLC. Previously, Mr. Sanders worked for Allstate as a bodily injury and flood adjuster. He understands how insurance companies operate, which allows him to negotiate with insurance adjusters on his client's behalf more effectively.


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