State Farm is the largest insurance company in the country. Through several subsidiaries, State Farm companies service over 80 million insurance policies in the United States, including over 44 million automobile policies. It goes without saying State Farm has a massive marketing budget, which they use to convince consumers that, like a good neighbor, State Farm is there. Unfortunately, State Farm rarely acts in accordance with their tagline.
Insurance claims adjusters are at the forefront of the settlement process. They are tasked with evaluating the details of an accident in Colorado, reviewing medical records, and determining the extent of liability. Here are some important considerations regarding the claims adjuster’s role:
Understanding how State Farm assesses personal injury claims is essential for achieving a favorable outcome for your clients:
In 2007, CNN conducted an 18-month investigation to evaluate the practices of major insurance companies in America. In interviewing former employees of various insurance companies, the investigation revealed State Farm (along with Allstate) employed a hardball scheme when evaluating personal injury claims that consisted of delay, deny, and defend.
Despite being “a good neighbor,” the investigation revealed State Farm requires insurance adjusters to employ delay tactics by taking significant time investigating and determining liability. The investigation also demonstrated State Farm also required insurance adjusters deny valid claims, oftentimes forcing injured parties to file a lawsuit. Finally, the investigation showed that, once a case is in litigation, State Farm aggressively defends their insured.
Even when State Farm is not employing the three D’s (Delay, Deny, Defend), insurance adjusters have become known for tough negotiation tactics, including making lowball offers in an attempt to gauge a claimant’s willingness to settle quickly. Another common tactic employed by State Farm is repricing medical bills. Specifically, State Farm often uses arbitrary criteria to recalculate medical bills and other expenses based on the location of medical treatment. According to State Farm, the bills are repriced to reflect the variation in facility costs in a specific geographic area.
It is important that personal injury victims do not fall victim to State Farm’s strategy to avoid paying a fair and reasonable settlement in a car accident injury claim. Fortunately, there are several ways to help counteract the three D’s, including the following:
When a person is injured in a car accident in Colorado, they should seek medical treatment as soon as possible. It is best to proceed directly to the emergency room by way of ambulance. Of course, no one should fake an injury. They should only seek medical treatment if they are injured. If a claimant is not in pain immediately following a car accident in Colorado, that does not mean they are not injured. It could be that adrenaline is rushing through their body following a car accident, numbing them to pain. It is common for people who initially believe they are uninjured to wake up the next day or several days later with significant pain, soreness, or limited range of motion. Importantly, with no medical treatment or gaps in medical treatment, State Farm will devalue the claim.
State Farm is oftentimes swift at contacting claimants and requesting a recorded statement. Personal injury victims must understand there is absolutely no legal requirement that they have to provide a recorded statement to the at-fault driver’s insurance company. If, however, State Farm is the victim’s first party insurance company, they will need to provide a recorded statement. People should keep in mind, simply because State Farm is the first party carrier does not mean they have their insured’s best interests in mind.
A “nuisance” offer is an offer made by an insurance company to quickly settle a case for a ridiculously low amount. These offers often range anywhere from the low hundreds to the low thousands of dollars. Additionally, the insurance adjuster may make it seem like a sweet deal by offering to pay a claimant’s emergency room bill or a few chiropractic sessions along with some money. Of course, the insurance adjuster fails to mention they would negotiate the bills down beforehand.
If State Farm is offering a claimant for a bodily injury claim, there is likely more money on the table. It is also likely the insurance adjuster does not have all relevant information and documentation. Once a claimant executes a settlement release, it is going to be extremely difficult, if not impossible, to continue with a personal injury claim. This is because a settlement is final. Prior to settling a claim, claimants should consult with a personal injury lawyer in Colorado.
The Eggshell Plaintiff Doctrine is a judicially-created doctrine (common law) that says the at-fault party must take the injured victim as he finds him when he exacerbates a pre-existing condition. This means an at-fault party is liable for aggravating an issue that an injured party had prior to a car accident in Colorado.
For example, an at-fault driver causes a minor fender-bender with an elderly person with brittle bones and shatters her hip. Notwithstanding her pre-existing issues of glass bones, the at-fault driver is responsible for making the condition worse. It does not matter the fender-bender would not have caused this type of injury to most people. Another example is when a man with an asymptomatic (i.e., no symptoms) herniated disc in his lower back becomes symptomatic. It does not matter that the careless driver did not cause the herniated disc. All that matters is that the careless driver aggravated a preexisting injury, for which he is responsible under the Eggshell Skull Plaintiff doctrine.
State Farm will use a pre-existing injury or condition to argue their insured did not cause the injuries. The insurance adjusters will claim there is no causal relationship to sort out a prior injury versus a potentially new or aggravated one. This is simply not how claims should be handled. It can be, however, complex to prove an aggravation of a pre-existing injury. Hence the importance of consulting with a personal injury lawyer in Colorado.
There are many factors that affect value in a personal injury case in Colorado. The following represents a non-exhaustive list of factors claimants should be aware of if attempting to settle a bodily injury claim with State Farm:
While many facts are important, a crucial fact involves the property damage of the vehicles. This information is important because the more significant the property damage, the higher the likelihood of serious injuries. Another important fact is the location of the accident. State Farm pays attention to the county where the accident happened because some counties, such as Boulder County and Denver County, offer a more plaintiff-friendly venue.
State Farm pays more money when the injuries are more severe. Soft tissue injuries, such as whiplash, are going to be valued lower than cases involving a broken bone or brain injury. It is helpful to keep in mind, simply because a person suffered a soft tissue injury, does not mean their injuries are not serious. The value of cases involving soft tissue injuries will come down to proper and consistent medical treatment.
If State Farm places any fault on the injured party, it could be problematic, especially if it is determined the parties share equal fault or that the injured party is more than 50% liable. In situations where a claimant is more than 50% liable, they may be barred from recovering all damages.
Policy Limits
In all cases against State Farm, the potential compensation in a personal injury claim will be limited to the amount of the at-fault party’s policy limits. For example, if the at-fault party carried the state minimum in Colorado of $25,000.00 per person/ $50,000.00 per accident, that is the maximum State Farm will pay out. Another important note on State Farm is that when their insured has a large insurance policy and the claimant’s injuries are minor, the insurance adjuster will likely extend a nuisance offer.
In a personal injury case based on negligence, the claimant merely needs to prove the at-fault party failed to meet the reasonable person standard and, as a result, caused demonstrable damages, harms, and losses. In cases where the at-fault party acted with gross negligence or recklessness, both of which are elevated levels of culpability above regular negligence, they may be liable for punitive damages, which can be awarded in addition to compensatory damages (medical bills, lost wages, pain and suffering), and are intended to punish the at-fault driver for their conduct. An example of this is an accident caused by a drunk driver.
State Farm will also consider the profile of their insured. If a company is liable by way of a negligent employee, the corporation may be responsible for the damages under a theory of Respondeat Superior. In many counties in Colorado, juries and oftentimes State Farm will adjust numbers upwards when a corporate entity is involved, conceivably because they believe corporations have deeper pockets and because they may be less sympathetic to companies with sizeable assets. The at-fault driver’s profile is also relevant. If, for example, the insured has a significant criminal history or terrible driving record, such evidence may help increase the value of the case against State Farm.
Personal injury victims should start by extending a high offer to State Farm, a figure the carrier will not likely pay but one based in reality. By way of example, a claimant should not begin negotiations at $750,000.00 when they suffered whiplash injuries and only treated with a chiropractor for two months. That said, claimants should not begin negotiations too low either, as this will reduce the amount of money State Farm will be willing to pay.
Personal injury victims should know the figure they want to settle before beginning negotiations. With each round of offers and counteroffers, it may be a good idea to match the movement of the insurance adjuster as they move from the previous offer. That said, it is also important not to bid against oneself by lowering an offer in response to the insurance adjuster not increasing the offer. Typically, State Farm will begin with a low-ball offer, especially if the claim involves soft tissue injuries.
Typically, State Farm will move from the initial offer anywhere between 3-5 times throughout negotiations. If the parties reach a point where the offers cease to increase, claimants should consider providing additional information and documentation in an effort to aid the insurance adjuster in increasing the reserves. It would also be helpful to review each line of damages with the insurance adjuster, including each line item of the medical bills. It is important to make sure the bill State Farm has is equal to the bill the claimant has. As highlighted above, keep in mind, State Farm will likely attempt to discount the medical bills based on an arbitrary calculation relating to geography, as well as what the insurance adjusters will label “usually and customary.”
Ultimately, claimants should keep in mind the insurance adjusters are simply doing their jobs within the confines of the policies and procedures dictated by State Farm. There is no point to be disrespectful or aggressive, or use foul language. All of this will be recorded in the claims file and, frankly, it will not help in the resolution of the claim. Personal injury victims should be kind and use facts to support the value placed on the claim.
If the case does not seem to be moving in the right direction, another option is to speak with the insurance adjuster’s supervisor. State Farm operates under an organizational hierarchy, just like most large corporations, with lower-level employees, middle management, and upper management. The insurance adjusters that handle the vast majority of claims at State Farm, especially at the team level, do not have a significant amount of settlement authority. They are required to strictly adhere to the policies and procedures dictated by State Farm. It is possible to make further headway by circumventing the process by discussing the claim directly with the assigned insurance adjuster’s supervisor. It is possible State Farm will consider taking a second look at the evidence to see if the insurance adjuster missed something.
Of course, a claimant may get pushback from the assigned insurance adjuster. They may indicate their supervisor is unable to add any value to the claim. Personal injury victims should not take this statement at face value. They should continue to push until they speak with the supervisor directly. Also, as highlighted herein, if a claimant has additional information or documentation that may increase the value of the case, provide it immediately.
While the timeline will depend heavily on the injuries a claimant suffered, most minimal injury cases settle in three to six months. Of course, this will also depend on how much medical treatment an injury victim pursues. Soft tissue injuries usually heal in about 6-8 weeks and need about that much time of chiropractic treatment and/or physical therapy. A broken bone or fracture can take anywhere from 6-20 weeks to heal completely. But a claimant may be able to resolve these types of cases quickly with State Farm since the injuries are apparent, especially if the State Farm bodily injury policy limits is under $100,000/$300,000.
More catastrophic injuries or wrongful death cases may resolve immediately with State Farm, assuming liability is clear and the policy limits are under $500,000/$1,000,000. It will, however, depend on the seriousness of the injury, impairment, scarring, and other general damages elements.
The value of your spinal injury will depend on the several factors, including the extent of the spinal injury, policy limits, and medical treatment. The more severe and permanent an injury, the more the claim will be worth. That said, the claim may be limited by the amount of the State Farm policy limits the at-fault party carried. Medical treatment is a huge factor in determining how much a case is worth with State Farm. If a claimant requires surgery, their case will be worth more than a case where someone only sought minimal treatment with a chiropractor.
The most common type of spinal injuries in a Colorado auto accident are sprains and strains to the muscles and tendons surrounding the spine. State Farm pays the least on these types of spinal injuries since they are not permanent and usually heal in 6-8 weeks with minimal treatment. State Farm can pay anywhere from the low hundreds to several thousands of dollars for back/neck sprains or strains.
Herniated discs are also a common spinal injury in an auto accident. A herniated disc can be worth much more than sprains and strains since this injury is permanent and can be debilitating. These can settle anywhere from the low five-figures to several hundreds of thousands of dollars. The higher end settlements for a herniated disc injury usually involved surgery.
The important thing to take away is that serious injuries, such as spinal fractures, are worth more than sprains/strains and can be worth more than a herniated disc case. However, the settlement amount will depend on what sort of medical treatment is required and whether there will be any impairment. Surgical cases involving fractures can be worth millions of dollars if the injury is life-altering (e.g., paralysis).
Like most insurance companies in Colorado, State Farm uses claim adjustment software to calculate most of the auto accident claims. The basic calculation is to add the medical expenses, lost wages, and general damages (e.g., pain and suffering, emotional distress, etc.) and then adjust for any contributory negligence. However, State Farm may reject paying all medical bills if the insurance adjuster does not find the medical treatment to be reasonable or if the provider overcharged for services.
The calculation of the pain and suffering and other general damages components is less straight forward. Several soft factors will be entered into their software including whether there is any objective proof of pain such as MRI film/reports and photos of the injuries, orthopedic devices, or surgical hardware (e.g., screws, plates, pins).
Generally, State Farm is not very fair or reasonable when it comes to paying personal injury claims. This is especially true with soft tissue injury cases. In fact, according to the personal injury lawyers at Bowman Law, State Farm ranks close to last when considering reasonableness against the top five insurance carriers (i.e., Geico, Progressive, Allstate, Liberty Mutual). Unfortunately, this has resulted in more lawsuits against State Farm than any other insurance company. Moreover, not only is a lawsuit oftentimes required, usually the case has to go pretty deep in litigation to get fair and full value.
While it is encouraging to see claimants attempt to settle their bodily injury claim directly with State Farm, the personal injury lawyers at Bowman Law have seen far too often how doing so creates issues. We have taken cases where clients have attempted to settle their cases directly with State Farm and have had to spend countless hours fixing problems that were unnecessarily created. We have also rejected potential clients where the issues became too unsurmountable to overcome. The point is, claimants attempting to handle a claim themselves may actually make things worse. When the damage is done, there is not much our personal injury lawyers can do to get these cases back on track.
This is why our personal injury lawyers try to educate members of the community on injury claims ahead of time, but also highlight the importance of consulting with our attorneys early in their cases.
A consultation is always free and may mean the difference between a case that had significant value versus a case that will only receive a nuisance offer. It is very rarely the case that a claimant will make more money by not hiring an attorney. In fact, a study by the Insurance Research Council revealed that attorney-represented claimants received 2-3 times more in settlements than those without a lawyer. Even when considering the contingency fee, claimants end up with far more money in their pocket when retaining qualified personal injury lawyers.
Schedule a free consultation to speak to one of our personal injury attorneys about your claim. Our office is located in Denver and we serve Colorado Springs, Boulder, Fort Collins, Aurora, and the surrounding areas.
Owner and Managing Attorney
Jerry Bowman, J.D., M.A., Owner and managing attorney of Bowman Law LLC, takes his responsibility to the legal profession seriously and dedicates his time and effort to providing quality and competent legal representation to clients in Denver and throughout all of Colorado. He holds an MA in Political Science from Wayne State University and earned his law degree in two and a half years from Michigan State University College of Law.
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