Founded in 1922, State Farm employs more than 58,000 people and 19,000 insurance agents.[1] The largest auto insurer in the U.S., the company reports it earned total revenues of $79.4 billion and a net income of $5.6 billion in 2019.[2] According to the Insurance Information Institute, State Farm had the second-highest number of auto insurance policies in Arizona in 2019 with a market share of 14.8%.[3] This means that almost one out of every seven auto insurance policies written in the state are issued by State Farm. The accident lawyers at Lamber Goodnow have handled countless claims filed by negligence victims in Arizona. Our experience in dealing with State Farm has allowed us to establish a highly successful record on behalf of our clients against this company.
As compared to other auto insurers in Arizona, State Farm is more likely to force negligence victims to take their cases to trial. The company often makes unreasonably low offers of settlement, making it impossible to resolve the victims’ claims without filing formal lawsuits.
State Farm is efficient with its claims process and will typically extend settlement offers quickly in response to demand packages. However, the initial settlement offers that the company makes are often unreasonably low to fairly compensate victims of accidents.
Assignment of claims to insurance adjusters
When State Farm receives claims, it assigns them to insurance adjusters. The company has claims units to which it assigns claims when they are filed. Teams of adjusters within the units are assigned to handle injury claims that the company believes are less severe. Serious injury accidents are assigned to individual adjusters. For people whose claims are assigned to teams of adjusters, State Farm tends to extend initial settlement offers that are much less than the claims’ fair values. An experienced Phoenix accident lawyer at Lamber Goodnow might secure a settlement or verdict that is significantly higher than the initial offer from State Farm.
Claims that are assigned to individual adjusters vary broadly, depending on the adjuster. Some adjusters are reasonable and will agree to settle claims fairly. Other adjusters extend low offers, making it necessary to file a formal lawsuit to secure a reasonable damages amount.
As the litigation process continues, State Farm tends to increase its settlement offers. In some cases, a later settlement offer from State Farm might be three times higher than the initial offer the insurer made. The increases in the value of settlement offers after lawsuits are filed might be due to the fact that the claims are turned over to defense lawyers for State Farm instead of being handled by adjusters. Defense attorneys for State Farm understand the risks involved with trying cases before juries. The values of offers also rise when State Farm figures out that an accident victim will not accept a quick offer of settlement to avoid a potential lawsuit and trial.
When a trial is scheduled, defense lawyers take a harder look at the claim’s quality and the legal arguments. They provide State Farm with realistic explanations of the risks of taking the cases to trial. In many cases, the initial offer from State Farm insurance adjusters will only be enough to pay for the victim’s medical bills and not enough to cover his or her other losses. By contrast, later offers may be much higher and pay for the victim’s economic and non-economic injuries.
How State Farm calculates settlement offers
State Farm uses a proprietary software program to calculate accident claim damages. Insurance adjusters use this software when they determine how much to offer to accident victims. In most cases, the results returned from this system are unreasonably low.
Information from an accident victim’s medical records is entered into the program. The information is then analyzed, and the software calculates the amount and value of the medical treatment that might be necessary. It also adds the past and future income losses and places a value on the victim’s non-economic damages. Each of these categories of damages is normally undervalued.
In most cases, it will be necessary to file a formal lawsuit to recover a fair damages amount. State Farm is a huge corporation that is in business to make money. By extending low settlement offers, the company tries to minimize its losses. State Farm also needs to see additional evidence to prompt it to make reasonable offers. During the discovery phase of a lawsuit, the company will receive more evidence that can help to convince it of the claim’s actual worth. Some adjusters also take the trial records of the attorneys who represent the claimants as a factor in the settlement offers they make.
Frequently asked questions about State Farm accident claims
The attorneys at Lamber Goodnow are often asked questions about accident claims against State Farm. Here are some of the most commonly asked questions that we receive.
1. An adjuster contacted me for a recorded statement. Do I need to give one?
When you file an accident claim against the person who caused your accident, his or her insurance company will be tasked with defending against the claim. When the at-fault driver’s insurance company is State Farm, you are not contractually obligated to provide a recorded statement to the adjuster. Many insurance companies have contractual provisions in their policies requiring their insureds to give information about their accidents. However, if you are simply filing a claim against a driver who caused your accident, your claim is a third-party claim. This means that you are not a part of the contract that State Farm has with its insured and are under no obligation to provide a statement.
The reason why adjusters for State Farm ask for recorded statements is to try to get victims to make statements that can be used against them in their claims. They ask leading questions that are designed to elicit responses that will help State Farm to defend against claims rather than to help you secure the compensation that you deserve. If you are asked to give a recorded statement, you should politely state that you want to talk to an injury lawyer at Lamber Goodnow before you agree to do so. We can handle the communications with the insurance company for you.
2. State Farm asked me to sign an authorization to release my medical records. Should I give them permission to access my records?
Another tactic that State Farm uses to try to minimize the amounts that they might have to pay on claims is to request broad access to accident victims’ medical records. If you grant the company broad access to your medical records, it will dig through your medical history to try to find an earlier incident on which to blame some of your injuries and reduce the value of your claim. For example, if you suffered injuries to your neck after being rear-ended, State Farm might blame your injuries on a sports injury in which you injured your neck while playing football in college. You should not agree to sign an authorization for State Farm to access your medical records. Instead, your attorney will provide relevant medical records to the company that relates to your accident and the injuries that you suffered from it.
3. Will State Farm make an unreasonable offer to me?
If State Farm decides that your injuries are not serious, it may assign your claim to a team of adjusters. These teams are comprised of adjusters who have less experience. Typically, these adjusters are given little authority to take additional evidence into account when calculating settlement offers. In most cases, they offer settlements that are worth far less than the actual value of the claims. If you receive an early settlement offer, you should consult with the accident attorneys at Lamber Goodnow to determine the value of your claim. You should not agree to accept an early settlement offer from State Farm since it is unlikely that it will cover all of your losses.
4. What justifications does State Farm use when it makes low offers or denies claims?
State Farm might make several claims when it tries to dispute or deny the liability of its insureds. It might try to blame your injuries on a prior accident or medical condition. It might also argue that your medical bills are too high or that you were provided with unneeded treatment. State Farm sometimes tries to argue that accident victims were not injured or are malingering. Finally, the company may try to argue that the value of your claim is not worth as much as you believe to try to get you to agree to a lower settlement offer.
5. How long will it take my claim against State Farm to settle?
After your attorney sends your demand package to State Farm, the company tends to act quickly. In many cases, State Farm will respond with an initial settlement offer within about a month. However, securing a fair settlement may take much longer. If you have to file a lawsuit, securing a fair settlement offer from State Farm may take many months up to a couple of years.
6. Will an offer from State Farm dramatically increase after I file a lawsuit?
State Farm often increases the offers it makes after lawsuits are filed. However, your case might have to go through a significant portion of the discovery phase before you might see a dramatic increase in your offer. After your claim goes through depositions, the company might increase its settlement offer. Depositions allow State Farm and your attorney to evaluate the witnesses when they testify and give them a better idea of how a jury might view the evidence. State Farm is still much more likely to take a case to trial than other insurance companies even though it might end up paying a verdict that is much higher than the policy’s value.
7. Will State Farm settle my claim before trial?
Whether State Farm will allow your case to go to trial or will settle it before trial will depend on what is in dispute. If the primary issue is the liability of the driver, the company will often let the case go to trial. However, if the company is simply disputing the value of the claim, it is much likelier to make a reasonable settlement offer before trial.
8. Why does State Farm choose to go to trial more often than other companies?
State Farm often threatens to take cases to trial to try to get plaintiffs and their attorneys to accept low offers. Some attorneys never go to trial and only settle cases. For these lawyers, the threat of a trial by State Farm will be enough to get them to try to convince their clients to accept a low offer. This tactic also works well for State Farm when the company is dealing with people who are attempting to handle their claims without the help of experienced attorneys.
9. What will happen if the jury returns a verdict that is higher than the defendant’s insurance policy limits?
In some cases, State Farm will pay the excess verdict amount for its insureds. However, this will depend on the facts of your case. To help you to recover the full amount of your losses, your attorney at Lamber Goodnow will thoroughly investigate your claim before it is filed to identify all potential sources of recovery and other parties that may have contributed to the cause of your accident.
10. Do I need an attorney for an injury claim against State Farm?
It is never a good idea to try to represent yourself in an accident claim against State Farm when you have suffered serious injuries. It is difficult for most people to understand the value of their claims, and State Farm can easily take advantage of its greater resources to undervalue your claim. If you want to secure a fair settlement from State Farm, you should talk to an experienced lawyer at Lamber Goodnow.
Sample settlements and verdicts against State Farm
The following list of settlements and verdicts are taken from cases filed across the U.S. These examples are provided only to give you a better idea of what you might expect. However, your outcome may be different. The damages that you might ultimately recover will depend on the unique facts and circumstances of your case.
California: $1.5 million total verdict against State Farm and Farmers Insurance – The plaintiff was a 22-year-old woman who was a passenger in a vehicle that was driven by her boyfriend. The car was involved in a multiple-vehicle collision, and her boyfriend was subsequently charged with drunk driving. The woman suffered serious back injuries. Her attorneys were able to prove that she was unaware of her boyfriend’s intoxication and that her back injuries were caused by the accident instead of a prior incident.
Florida: $100,000 settlement from State Farm – The plaintiff was a man in his 30s who was rear-ended in Miami, Florida. The crash did not cause his airbag to deploy, and he did not go to the hospital immediately after the accident. He later suffered back and neck pain and discovered that a lumbar disc had herniated. He underwent a lumbar laminectomy. His attorney was able to show that the injury was caused by the rear-end collision, and State Farm ultimately agreed to settle the case for $100,000.
Maryland: $100,000 verdict – The plaintiff was traveling in Maryland when the defendant tried to make a left turn in front of him. The defendant argued that she had a green left-turn arrow. The parties stipulated to a verdict of the policy limits of $100,000, but the case went to trial on the liability issue. The jury awarded $70,000 to the plaintiff and $30,000 to the defendant.
Arizona: $200,000 settlement – The plaintiff was a woman who was seven months pregnant when another driver collided with her vehicle. The accident caused the plaintiff to go into preterm labor, forcing her infant to stay in the neonatal intensive care unit. State Farm agreed to settle the claim for $200,000 to compensate the woman for her moderate injuries as well as the additional costs of the neonatal care required for her infant.
Virginia: $1.2 million settlement – The plaintiff was a 36-year-old man who was operating a motorcycle. The defendant turned left at an intersection where left turns were prohibited. The plaintiff suffered several open fractures of his left leg that required numerous surgeries. After his surgeries, the man continued to suffer from range of motion and strength problems. State Farm reached a negotiated settlement of $1.2 million before trial.
Indiana: $800,000 underinsured motorist settlement – The plaintiff was injured in an accident that was caused by a driver who fell asleep behind the wheel. The at-fault driver’s insurance company paid its policy limits of $50,000. However, the plaintiff suffered low back injuries, and his treatment costs far exceeded the at-fault driver’s policy limits. He filed a claim with his uninsured motorist policy through State Farm. State Farm disputed his claim and argued that his injuries were caused by a degenerative condition instead of the accident. The plaintiff’s attorneys presented evidence to State Farm at mediation just before trial that convinced the company to settle the case for $800,000.
Get help from the accident attorneys at Lamber Goodnow
If you suffered serious injuries in an accident caused by a driver who was insured by State Farm, you should talk to the experienced accident lawyers at Lamber Goodnow. We have an extensive track record of success for our clients in their claims against State Farm. Contact us today to schedule a free evaluation of your claim by calling us at 602.274.9662.
Sources
[1] Statefarm
[2] Statefarm
[3] iii.org