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How Car Insurance Companies Make Money

How Car Insurance Companies Make Money

In every car accident case, we are across the table from an insurance company. The California car accident attorneys at Heiting & Irwin, APLC have a demonstrated track record of successfully taking on insurance companies, recovering over $500 million for our clients.

It is extremely important to have a tough and knowledgeable vehicle accident lawyer when you are dealing with a car insurance company because their motivation is the exact opposite of yours. Insurance companies do not want to pay your claim in full no matter what, and your car accident lawyer is the one to take that money from them.

Contact Heiting & Irwin today to begin the legal process through your free initial consultation. We will learn more about what happened and help put you in a position to seek maximum financial compensation. 

The Insurance Company Wants to Make as Much as Possible

Before you file an insurance claim, it is helpful to understand who you are dealing with in the claims process. The other driver is probably defended and represented by their insurance company, a for-profit business with its own financial interests playing a role in your claim. 

To know why you need your car accident lawyer to fight  for you, you simply must understand how the insurance company makes money and what their interests in your case are. Do not forget that you are an expense to the insurance company. No matter what, they are not your friend. 

Above all else, the insurance company wants to make money. Most likely, they are a publicly traded company that has shareholders to satisfy. These shareholders will be disappointed, and heads will roll if the insurance company does not continuously grow earnings. If the insurance company is privately owned, the owners still have the same exact motivation. 

How Insurance Companies Earn Their Revenue

On the revenue side, the formula for the insurance company is relatively simple. The insurance company takes in money from the premiums that they charge their customers each month. The insurance company then takes this money and invests it. They may own stocks, bonds, or anything else that they think would produce returns for them. In good years, the insurance company could make very healthy profits on its investments. Obviously, the more customers they sign up, the more money they have to invest. Of course, insurance companies have special investment committees and advisors that manage their money.

Your Case Costs the Insurance Company Money

The expense side is slightly more complicated. The insurance company has a number of expenses that it must pay from its premiums and investment returns. First, and most obvious, are the settlement funds that the insurance company pays out when their drivers are to blame for an accident. Second, the insurance company may need to pay expenses that are associated with car accident claims, such as the lawyers who defend them in court when you file a lawsuit, claims adjusters, risk managers, consultants, experts, lawsuit expenses, etc. Additionally, the insurance company will have overhead costs, such as paying its employees and advertising to get more customers. 

Your Car Accident Attorney Needs to Fight to Get What You Deserve

The insurance company has a motivation to keep costs as low as possible, including the cost of paying you on a legitimate claim. They want to economize on paying claims to the fullest extent possible. The more that they pay you, the less money they will make in profits. The insurance company has charged its own customers based on how they have priced the risk. If they settle claims for less than the true amount of damage that the driver has caused, it is a win for the insurance company.  Think about it: if the company pays $1,000 less on 1,000 claims, they save $1 million!  And they try to do it over and over and over again.

Your car accident lawyer will operate against this backdrop. An experienced car accident attorney knows the pressure points that could cause the insurance company to buckle in settlement negotiations. The insurance company thinks that it can control the tone and tenor of settlement talks. Of course, if your auto accident lawyer takes your case to court, the jury then could be the ultimate decision maker –  in your case. Plus, the insurance company would also need to pay litigation expenses that are associated with your claim.

When the insurance company makes money, it often comes at your expense. Any dollar that they save on your claim is one that comes out of your pocket. Hiring an experienced car accident lawyer is a way to keep that from happening. 

Contact a Riverside Auto Accident Attorney Today

Call the aggressive vehicle accident lawyers at Heiting & Irwin today for the hard-hitting legal representation that you need to fight the insurance company. You can schedule a free initial consultation with one of our Riverside car accident attorneys by calling us today at 951-682-6400. You owe us nothing unless we get you money though. 

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