Twenty-two lowballing techniques used by unscrupulous insurance adjusters

A variety of techniques can be used to lower the amount of damages that should be reasonably paid to the personal injury claimant. The following list outlines some of the possible strategies that may be used by a less than scrupulous claims representative.

Using a personal injury attorney

The claims representative may use a personal injury attorney to write an opinion letter stating that the claim is worth very little, if anything, when the claims representative has not submitted all the known facts to the attorney for the opinion letter. The adjuster can then share this letter with the claimant to influence the claimant to settle for the adjuster’s offer.

Geographical defense

Claimants living out of the state where their injury occurred can be forced to compromise the full value of their claims. The inconvenience and expense of taking time away from a job (lost wages, travel and lodging expenses), to litigate the claim may force the claimant to accept a lesser settlement amount. The claims representative knows these facts of life and can offer less than he or she would offer if the claimant resided in the local jurisdiction of the trial court. 

Social stigma defense

Another technique is for the claims representative to consider whether the claimant’s social station or lifestyle, such as belonging to the Hell’s Angels, would be looked upon favorably by an average juror. If jurors feel that this type of association is negative, then the full value of the claim could be reduced.

Expert shopping

Some claims representatives may “shop around” for an expert who will, for a price, testify to anything that will cause the claim to be denied or mitigated. One of the purposes of this improper claim handling practice is to make sure the file contains an expert report to provide the adjuster with “cover” for what would otherwise be an improper adjustment of the claim. However, the adjuster and his or her supervisor control the scope and the nature of the investigation conducted by the so-called expert. If the expert’s report or investigation is limited or slanted to be biased, unfair, or incomplete, it is up to the insurer to review, revise, and sometimes throw out the expert report if it does not serve a proper purpose.

Previous litigation experience

When a claims representative learns that the claimant has been represented by a personal injury attorney in a previous matter that took years to settle, and the attorney got half of the settlement (fees and costs), then the use of that history is a valuable tool to reduce the fair settlement value of the claimant’s claim up to 50%. The claims representative may argue that it is better for the claimant to take half of what he or she is entitled to at this time, rather than hire an attorney, wait years, and then have the attorney take half.

Also, if the claims representative learns that the claimant has had previous litigation experience that resulted in a defense verdict, it would be advantageous to disclose this information when negotiating with the claimant.

It’s your fault

The claims representative may hold the claimant responsible for consequential damages, stating that the claimant did not protect his or her property after the accident. If the claimant’s damaged vehicle left at the scene of the accident was vandalized or personal property was stolen from it after the claimant left the scene (by ambulance), the claims representative will argue that this is an independent act and not related to the accident. Another tactic is for the adjuster to accuse the policyholder of failure to cooperate or provide necessary documentation to continue the claim investigation. It is not unusual for the insurer to improperly use this accusation against the policyholder, even though it is the insurer and not the policyholder who must conduct the claims investigation.

Slow mitigation efforts

The claims representative may hold a claimant responsible for not quickly mitigating his or her damages. An example is when the claimant did not seek medical attention fast enough, in the opinion of the claims representative. Hence, the claimant aggravated his or her own medical problems and the insurance company will not pay.

Keeping premiums down

The claims representative may tell the claimant that the settlement of the claim must be kept down in order to keep premiums from going up.

Tax benefits

Another technique is for the claims representative to tell the claimant that the claim is being reduced since the general damages that are being paid are tax free. The claims representative is taking credit for that percentage of taxes that the claimant usually pays when earning money.

Attorney leverage

If the claims representative can determine that the claimant hates attorneys, then the representative can offer an unreasonably low settlement, knowing that the claimant will have no other alternative but to accept the claims representative’s low offer.

If you don’t ask, you don’t get

There may be no offer to pay for anything not demanded by the claimant. If the claimant does not ask, the claimant does not get. However, an insurer may commit bad faith by failing to disclose the insured’s rights under the policy. Insurers under established insurance industry customs and practices, and as codified in most state insurance statutes and claim regulations, have an affirmative duty to disclose to their policyholders all coverage they are entitled to after a claim is made. The policyholder should never be left guessing as to what benefits he or she may be entitled to after proper notification of the loss.

Forced structured settlement

The claims representative may try to force a structured settlement on the claimant to avoid a full cash payment of a claim. In a structured settlement, the claimant is paid over time, rather than in a lump sum. This will allow the insurance company to avoid payment of the lump sum settlement and to invest this savings for its own financial gain.

No diminution value

Another technique is to refuse to pay for the diminution value of the claimant’s vehicle after repairs are completed. On certain makes and models of automobiles, if that vehicle has been damaged, even though it has been repaired, it will have lost market value because it is not factory original. (This kind of case usually involves very expensive vehicles.)

False settlement authority

A claims representative may go to the claims supervisor and secure a memo that states that only X amount of dollars will be paid to the claimant. The claims representative, knowing the case to be worth more, can take that memo to the claimant as evidence of the maximum amount of money that the insurance company is willing to pay in settlement of the claim.

Excessive depreciation

Use of excessive depreciation tables or depreciation tables that do not have any reasonable relationship to the particular claimant’s case is a tactic employed by some claims representatives.

Free help

Another technique is to refuse to accept the claimant’s vehicle salvage and force the claimant to dispose of the vehicle salvage at his or her own expense and without consideration.


A claims representative may refuse to volunteer damages owed to the claimant. The representative may not offer to pay for the rental vehicle for the claimant while the claimant’s vehicle is under repair. Rather, the claims representative will tell the claimant to get a friend to drive him or her to work.

Likewise, the claims representative may not offer to pay lost wages the claimant has incurred. Rather, the claims representative will explain that the claimant can use sick leave or vacation time.

The claims representative may also not offer to pay medical bills incurred by the claimant as a result of the accident that involved the insured. The representative may tell the claimant to use his or her own auto medical coverage or the employer’s accident and health policy.

Professional time defense

If the claims representative learns that the claimant is a doctor, dentist, lawyer, small business owner, or self-employed person, the representative may surmise that the claimant probably can’t afford the time to go to trial. Most of the people in these categories cannot afford to shut down their business for enough time to litigate. Their time is too valuable, and therefore, they may accept a lesser sum of money for their claim.

Hardship defense

A claims representative may want to determine whether the claimant has been or is unemployed. Usually a claimant will accept a lower settlement amount if there is an immediate need for money. The principle is also applicable to low-income claimants.

Jury appeal

Learning something about the claimant and determining whether he or she is wealthy or a landlord is advantageous to a claims representative. Usually juries do not like these classes of people and will not award large settlements.

Terminal illness

The claims representative might also investigate the condition of the claimant’s health and determine if he or she is suffering from an incurable disease. If the claimant has a catastrophic health problem, would he or she outlive lengthy litigation and collect damages? It is a general rule that the general damages for pain and suffering die with the claimant. Those damages are personal and cannot be claimed by a survivor (or an heir).

Internal policy

Using the lowball technique, the claims representative informs the claimant that the insurance company’s internal policy is that certain damages will not be considered. Such a policy is usually a direct violation of good faith claims practices. The following examples highlight some of the damages that the claims representative may insist are not covered, but that should be.

  • Lost wages — Wages lost by the claimant due to having to take time off from work to secure estimates of damage for a vehicle, delivering the vehicle to a body shop for repairs, and picking up the vehicle after repairs have been completed. These are proximate cause damages and should be considered by an insurance company acting in good faith.
  • Transportation costs — Transportation costs to and from the claimant’s doctor’s office and other travel expenses that are directly related to the subject claim are also proximate cause damages.
  • Long distance phone expenses — Long distance phone calls made to the claims office, if the claims office is not local, are also proximate cause damages.
  • Court costs for children with attorneys — The court costs involved in obtaining a minor’s compromise for the sole benefit of the insurer should be considered proximate cause damages. This should be a cost of doing business of the insurance industry. This cost should be borne by the insurance company and not by children represented by attorneys. When a minor is not represented by an attorney, the insurance company pays the court fees and attorney’s fees to secure a minor’s compromise by superior court. Insurance companies only discriminate against children represented by attorneys.