Why Won’t the Insurance Company Pay My Car Wreck Claim?

Twenty or so years ago, car wreck cases were relatively easy to settle even for people representing themselves. You reported the wreck, the insurance adjuster shows up to do appraisals of the damages and took pictures, the claimant who was not at fault sent their medical bills and gave a written statement and then the case settled. The person representing themselves didn't always receive as much money as they should but they generally received enough to be able to tolerate the results.

Then, it seems like overnight, everything changed. The settlement offers on car wrecks without significant damages being apparent from the outside dropped to next to nothing, sometimes not even enough to pay the medical bills, and many cases now required lawyers to get an offer up to the level of "very low" from "ridiculously low". Insurance adjusters were also willing to let cases go to trial more often and take their chances on juries awarding smaller amounts.

There were a number of factors that caused this change in attitude.

First, there were major changes in the way the insurance companies handled their issue of attorneys for their insured. Many insurance companies went to "captive counsel" where law firms were actually only working for the insurance company. I thought then, and still think, this creates some major ethical issues because there are times when what is best for the insurance company and what is best for the client are completely different. However, it allowed the insurance companies to cut their costs dramatically for defending a case.

Along these same lines, insurance companies who were not using captive counsel began contracting out cases for defense. Some firms agreed to do a certain number of cases for a flat fee, negotiated a single flat fee for a case from beginning to end but with a guarantee of a number of cases, etc. 

Second, insurance companies began taking the "long view", knowing that many of the lawyers who did personal injury cases would not be able to justify taking small cases if they knew they were not going to be able to settle them. In addition, I have been told that the costs of defending cases can be used when the companies approach the insurance regulators in a state and request an across the board rate increase. This creates a way to offset the increased costs.

Third, insurance companies began to see a reduction in the amount juries were awarding, primarily due to the massive amount of money and time "big business" had spent to establish the idea that there were too many frivolous lawsuits and too many "lawsuit lottery" winners.

Lastly, the idea of a type of case known as a MIST case appeared and experts began popping up to support the theory. 

MIST is an acronym for Minor Impact Soft Tissue case. The concept, as well as how to handle this defense, are discussed in detail in our book The Guerrilla Guide to Settling Your Car Wreck Case, but essentially this is a designation the insurance companies have decided to use for wrecks with minimal external damage to a vehicle and no broken bones or (sometimes) no MRI or CT scans showing other injuries.

The concept of MIST cases is based on faulty (and outright dishonest) science, an assertion that you can't be injured if your car shows no major damage. 

In reality, the bumpers on cars now are designed in such a way that they absorb a lot of the impact without showing deformation. Many bumpers contain small gas filled cylinders which compress when an impact occurs (kind of like the shock absorbers in a car's suspension system) and absorb the damages which would crumple metal in the older cars.

It is important to realize that the insurance companies often have a policy where they make an offer in a case they classify as a MIST case and then refuse to go any higher. If that occurs then the only thing to do is sue them and work out a way to demonstrate to the jury that an impact can have more of an effect on a person that it shows on the car.

I've used the example of going grocery shopping and opening up an obviously undamaged carton of eggs and yet you occasionally find one broken because the energy was transferred to the egg without damage to the carton.

I've also used a croquet mallet and two croquet balls, whacking one with the mallet while holding it in place with my foot and then showing how the other ball shoots across the room because the energy is passed into it through the stationary ball.

Another example I once used was asking an expert hired by the insurance company expert if he would wear a football helmet and let me hit him across the top of the head with a baseball bat I had brought with me and hidden under the table in an experiment to see how much damage the helmet suffered versus the damage to his head. He declined and we won the case.

It is possible to win low impact minor injury cases and to even get reasonable settlements out of them but it requires that you understand the concepts involved as well as how adjusters think. There is also a secret weapon, again discussed more thoroughly in our book, in the form of a demand letter that can be used to at least worry the adjusters a little.

If you are considering representing yourself in your car wreck case whether in the initial attempts to settle or even in trial then you must prepare thoroughly and understand your case and their arguments. We hope you'll consider our book The Guerrilla Guide to Settling Your Car Wreck Case to help you do that.

NOTE: There is a computer program, originally called COLOSSUS, which many companies are now using to set the value of a car wreck case. There are a number of tricks you can use to get the computer to assign a higher value. These are also discussed in the above referenced book.