Your insurance company won't be looking out for you after a crash

You pay for motor vehicle insurance partially because it's the law and partly because you want protection in the event of a crash. Then, an accident happens, caused by another driver's negligence, mistake or even intoxication. You contact your insurance company, expecting that you won't really need to worry about anything once they're involved.

You've been a faithful customer for years. You pay your policy on time. Maybe you've had a minor claim or two in the past, or maybe this is the first time you've ever needed help from your insurance company. You may think your insurance company will look after you. They may make a settlement offer or pay your claim, but you need to know from the start that they are mostly interested in limiting their own financial liability to you after an accident.

Insurance companies want to make money, not spend it

Insurance companies make the most money off of customers who never need to file major claims. That's why they increase rates on people with traffic violations or accidents on their recent driving records. Those people present a greater liability for a serious claim. No matter how long you've had your policy, once you need serious coverage, you become a liability.

Your insurance company wants to pay as little as it can legally get away with paying. That's just good business for them. The more they pay out per claim, the less profit the company makes. In order to do so while complying with their obligation under your policy, they may try to trick you into taking less than you deserve.

Question settlements and don't offer a statement

You probably already know that you should never apologize after an accident. Even if the other party was clearly at fault, others may consider an apology an admission of guilt. More importantly, be clear and concise when you talk to law enforcement about what happened. That way, the police report makes it clear you were not at fault.

Your insurance company may ask for a written or recorded statement. You should politely decline and refer them to the police report on the accident. You could very well face leading questions intended to make you imply you shared fault for the crash.

You should be similarly skeptical if your insurance company offers a lump sum settlement. First settlement offers are often far lower than they should be. The company hopes you'll take it because you're desperate to start paying off your expenses after the accident.

Before you agree to anything, you need to carefully look over the impact of the crash, including medical bills, property damage and lost wages. Be sure to consider ongoing and future expenses, too. If the settlement doesn't cover it all, you should explore all of your available options, possibly including legal action.

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