It should come as no surprise that insurance companies do not like to pay claims. They love to take your premiums and invest them in big skyscrapers. They love to have happy stockholders and report big dividends. Too many of them achieve this by focusing their efforts on minimizing claims payments, even to their own insureds. Allstate's business plan, to reduce claim payments, resulted in them being named the worst insurance company in the country in a recent study by the American Justice Association. Florida residents know the well-publicized battle state insurance regulators fought in 2008 against Allstate and other carriers seeking to significantly raise homeowner's insurance premiums.

Consumers need to understand that every step taken by an insurance company in the claims process is calculated to minimize payment of claims. My associate, Sean Conahan, worked more than five years representing insurance companies and witnessed firsthand the tactics they employ to avoid paying claims. Let's take an insider's view of what they do.

First: deny liability

One of the first steps every insurance company undertakes in evaluating any claim is whether they can deny liability. They immediately look for any argument their insured was not at fault, the injured party was entirely at fault or they are not otherwise legally responsible, as when their insured's auto was loaned to an unlicensed driver or that the policy has lapsed. In dog bite cases, many policies specifically exclude liability coverage for dog bites or coverage for specific breeds of dogs, like a bite from a pit bull.

Second: get the injured party to give a recorded statement.

Insurance adjusters are trained to get a recorded statement of the victim after a car crash, fall or other accident. They call at the earliest opportunity and try to put the victim at ease. Their goal is to obtain harmful admissions about how the accident occurred or to minimize the victim's injury complaints and need for medical care. Lawyers see the harmful effects of such recorded statements. For instance, it is not uncommon for someone injured in accident to downplay the significance and force of the impact. In addition, they may not feel the need for medical attention for several days. All too often, the adjuster is able to obtain a recorded statement in which the person says they feel good and don't need to see a doctor. When their condition worsens, requiring extensive medical treatment, they are left to later explain why they made such an earlier admission, making it appear they have changed their story.

Third: obtaining a signed medical authorization

The adjuster would love to have the victim sign a general, unrestricted medical authorization giving them the ability to request medical records from any medical provider ever seen. It gives the adjuster the advantage of having the information from treating and other physicians before the victim's lawyer has received those records. While we do not play "hide the ball" with medical records given to an adjuster, we certainly want to know what records they have in their possession. Additionally, the adjuster has no reason to have any medical records unless, and until, a claim is actually made seeking compensation for injuries received in the accident. At the appropriate time, once a claim is made, all relevant medical records will be delivered to them. There is no reason for an insurance adjuster to have them before a claim is made.

Fourth: quick settlement and release

A very common insurance tactic is to contact the victim quickly after an accident and offer a small amount of money to settle any potential claim. This is done before they have ever visited a doctor or realized their need for medical attention. Many serious injuries are not always apparent right after an accident. It is not uncommon for people to wait days or weeks before realizing they need treatment. Insurance adjusters are well trained and understand this fact. Some companies aggressively pursue people injured in a car accident, offering them $500, $1000 or $1500 to settle their case on the spot. The condition, of course, is giving the adjuster a signed release of all claims. The purpose of a release is to bar any further recovery, even if the person's condition turns out to be far worse than they realized at the time the release was signed. Accepting a small amount of compensation when no injury has occurred is one thing. Accepting a small amount of compensation, which turns out to bar recovery for a much more serious injury, is totally different. Insurance companies well know that paying a few people a little bit of money, when they have little or no injury, is much cheaper than paying them a great deal of money later after the full extent of their injury is known. I've written another free report on this very topic, which you will find on our website under our Library, entitled "Should You Settle Your Injury Claim without a Lawyer?"

Fifth: convincing the victim the adjuster will be fair to them and a lawyer will only cost them money

We speak with clients regularly who have been contacted by adjusters who have assured them their claim will be fairly evaluated. In addition, victims are actually told not to contact a lawyer. Adjusters do this for one purpose, to save money. They understand claims settle for larger amounts to clients represented by lawyers. The job of an adjuster is to minimize the amount they pay in settlement of any claim. There are evaluated on that basis. They are promoted on that basis. They know the injured party has never attempted to place a value on any injury, nor do they have any knowledge of verdicts juries award for similar injuries. Dealing with the adjuster without the assistance of a lawyer is not a level playing field and they know it.

Sixth: surveillance

It must be assumed that anyone with any significant injury in a car crash or other accident will be under surveillance. Adjusters hire investigators to photograph and videotape accident victims bending over to pick up the newspaper, walking the dog, working in the yard, shopping, going to the gym or to the store. They are looking for evidence of any activity, which "appears" to be inconsistent with any physical limitations claimed to have resulted from the accident. Often, at trial, they will attempt to introduce videotape of the victim simply carrying on their daily routine without any apparent difficulty.