The Playbook: Common Tactics Insurance Companies Use
Insurance companies are for-profit entities, and their primary fiduciary duty is to maximize shareholder value, not to pay out claims. This fundamental conflict of interest is the engine that drives a multi-billion-dollar industry built on collecting premiums and then minimizing the amounts paid on claims. They employ a sophisticated, well-funded playbook of tactics designed to delay, deny, and diminish legitimate claims. Policyholders, often already in vulnerable positions due to an accident, injury, or property loss, find themselves facing an adversarial system rigged against them.
The Delay Tactic: Wearing Down the Policyholder
Time is a powerful weapon for insurers. The longer a claim remains unresolved, the more financial and emotional pressure mounts on the claimant, increasing the likelihood they will accept a low-ball settlement out of desperation.
- Requesting Repeated Extensions: Insurers will routinely request 30-day extensions to “investigate” the claim, often multiple times in a row. They cite the need for more information, even if they have already received it.
- Asing for Irrelevant or Duplicative Documentation: A claims adjuster may ask for the same document multiple times or request records that have no conceivable bearing on the claim. This creates unnecessary work and frustration for the claimant.
- Failing to Return Calls and Emails: Adjusters are frequently “unavailable,” their voicemail boxes are full, and emails go unanswered for weeks. This strategic silence stalls the process indefinitely.
- Rotating Adjusters: A common tactic is to reassign a claim to a new adjuster multiple times. Each time, the new adjuster claims they need to “get up to speed,” resetting the clock and forcing the claimant to repeat their entire story.
The Deny Tactic: Outright Rejection of Valid Claims
When delay isn’t enough, insurers will move to outright denial, often based on questionable or misinterpreted policy language.
- Citing Policy Exclusions and Fine Print: Insurance policies are dense, complex contracts filled with exclusions, conditions, and definitions. Insurers will seize on obscure, often broadly interpreted clauses to deny coverage. They may claim the specific cause of loss isn’t covered or that a technical violation of the policy’s conditions voided coverage.
- Arguing “Pre-Existing” Conditions: In injury claims, this is a cornerstone denial tactic. The insurer will argue the injury wasn’t caused by the accident but was a pre-existing condition, attempting to shift liability away from them. They will scour medical records for any prior mention of similar pain.
- Misrepresenting Policy Language: An adjuster may flatly misstate what the policy covers, hoping the policyholder doesn’t have a copy handy or lacks the legal knowledge to challenge them. They rely on the policyholder’s trust in their authority.
- Blatant Bad Faith Denials: Sometimes, an insurer will deny a claim with no valid basis whatsoever, effectively gambling that the policyholder will not have the resources or will to fight back.
The Diminish Tactic: Undervaluing the Claim
If a claim can’t be delayed into oblivion or denied outright, the strategy shifts to devaluing every component of it to pressure the claimant into accepting a fraction of its true worth.
- The Low-Ball Initial Offer: The first offer is almost always insultingly low. It’s a test. If a claimant accepts it, the insurer saves a significant amount of money. The offer is designed to capitalize on financial pressure and a claimant’s ignorance of the claim’s actual value.
- Disputing Causation: The insurer accepts that an accident happened but disputes that it caused all the alleged damages or injuries. They might say the car damage was from an old accident or that a back injury was due to age, not the crash.
- Undervaluing Total Loss Vehicles: Insurers use proprietary software like CCC One that often relies on flawed data, comparable vehicles from outside the local market, and adjustments that systematically undervalue cars. They will refuse to include things like recent repairs or upgrades in their valuation.
- Disputing Medical Treatment: They will argue that certain treatments (like physical therapy, chiropractic care, or specific diagnostic tests) were “unnecessary” or “excessive.” They may also refuse to pay full price for medical bills, claiming the “usual and customary rate” is lower, leaving the injured party with balance bills.
- Challering Future Damages: For personal injury claims, insurers notoriously downplay the need for future medical care, future lost wages, and non-economic damages like pain and suffering. They treat these very real losses as speculative.
How a California Lawyer Fights the Insurance Company Tactics
A skilled California attorney doesn’t just react to these tactics; they anticipate them and build a claim from the ground up to be bulletproof against the insurance company’s playbook. They level the playing field by understanding the rules better than the insurer does.
1. Investigation and Evidence Preservation
A lawyer immediately begins an independent investigation to prevent the insurer from controlling the narrative. This includes:
- Scene Investigation: Photographing the accident scene, property damage, or conditions that led to the loss.
- Securing Evidence: Obtaining police reports, witness statements, surveillance footage, and expert opinions (accident reconstructionists, medical experts, engineers).
- Preserving Electronic Data: Filing spoliation letters to ensure all relevant electronic data (from vehicles, devices, etc.) is preserved.
- Documenting Everything: Creating a meticulous record of all communications with the insurer.
2. Mastering the California Insurance Code and Bad Faith Law
California has some of the strongest consumer protection laws in the nation. A proficient lawyer uses this legal framework as a weapon.
- Leveraging the Covenant of Good Faith and Fair Dealing: Every insurance contract in CA contains an implied covenant that requires the insurer to treat the policyholder fairly. Violating this is “bad faith.”
- Invoking the California Fair Claims Settlement Practices Regulations: These regulations (Title 10, §2695.1 et seq.) explicitly dictate how insurers must handle claims. Violations are illegal. Examples include failing to acknowledge claims promptly, failing to adopt standards for investigation, and not providing a written basis for denial. A lawyer will cite specific violations in demand letters.
- Pursuing Bad Faith Litigation: If an insurer acts unreasonably, a lawyer can file a lawsuit not just for the value of the claim, but for bad faith damages. This can include:
- Consequential Damages: All financial losses caused by the denial (e.g., a lost house due to no payout).
- Emotional Distress: Compensation for the mental anguish caused by the insurer’s conduct.
- Punitive Damages: Designed to punish the insurer for particularly egregious misconduct and deter it in the future.
- Attorney’s Fees: Under California’s “private attorney general” doctrine and specific statutes, a prevailing policyholder may be awarded their attorney fees, making the insurer pay for the cost of the fight.
3. Strategic Negotiation and Making a Record
A lawyer communicates with the insurer strategically, never off-the-cuff.
- Everything in Writing: Phone calls are followed up with confirming emails or letters. This creates a clear record of promises, delays, and inconsistencies.
- Formal Demands and Deadlines: A comprehensive demand letter outlines the claim’s value, the legal basis for it, the evidence supporting it, and the specific insurance regulations the insurer has violated. It sets a reasonable deadline for response, creating urgency and showing the lawyer is prepared to file suit.
- Cutting Off Delay Tactics: A lawyer will not tolerate endless extensions. They respond to requests for irrelevant information by denying them and citing the insurer’s duty to investigate promptly. They escalate issues to supervisors when adjusters stall.
4. Litigation Readiness and Leveraging the Court System
The ultimate leverage is the credible threat of a lawsuit. Insurance companies know that a case in front of a jury is unpredictable and expensive.
- Filing a Lawsuit Promptly: If negotiations hit a wall, a lawyer files suit without hesitation. This moves the case from the insurer’s controlled, private setting into the public court system, where discovery rules apply.
- Using the Discovery Process: This is a powerful tool. A lawyer can use:
- Interrogatories: Written questions the insurer must answer under oath about their handling of the claim.
- Requests for Production: Demanding the insurer’s entire claim file, internal manuals, training documents, and communications about the claim. This often reveals the deliberate tactics used to deny the claim.
- Depositions: Taking sworn testimony from the adjuster, their supervisors, and the company’s corporate representative. This exposes the human decision-makers behind the denial and locks in their testimony.
- Motions for Sanctions: If the insurer continues bad faith conduct during litigation (e.g., destroying documents, refusing to comply with discovery), a lawyer can file motions for sanctions, asking the judge to penalize the insurer.
5. Employing Expert Witnesses
Lawyers use objective third-party experts to counter the insurer’s arguments and validate the claim.
- Medical Experts: Doctors who can testify that the injuries were caused by the accident and that the treatment was necessary.
- Economic Experts: To calculate the full value of future medical care, lost earning capacity, and other long-term damages.
- Vocational Rehabilitation Experts: To demonstrate how an injury impacts a person’s ability to work.
- Property Appraisers and Engineers: To provide independent valuations and opinions on the cause of property damage (e.g., why a roof leaked or a foundation failed).
The fundamental role of a California insurance lawyer is to shift the balance of power. They take a policyholder from a position of weakness, facing a corporate Goliath, to a position of strength. They force the insurance company to play by the rules of law and fairness, not just its own profit-driven playbook. By demonstrating an unwavering willingness to litigate and expose bad faith, they compel the insurer to do what it should have done from the beginning: provide the full and fair coverage the policyholder paid for.
