Attorney Involvement In Auto Claims

A few years back, a study commissioned by the American Property Casualty Insurance Association looked at the increasing rate of attorney involvement in auto insurance claims. Among the various impacts, the study found that attorney representation in commercial auto claims drove a 21% increase in total loss costs in 2019 compared to 2015.

Today, instances of attorney involvement in insurance claims continue to rise. A 2023 Sedgwick report found that more than 47% of auto liability bodily injury claims involved attorneys — a 2% increase from the previous year. 

So what exactly is driving people to pursue legal support following an auto accident?

This is a question a variety of insurance professionals should be actively considering — from claims adjusters, actuaries, underwriters, and beyond. And it’s precisely what the Stepwise team was determined to find out. We held in-depth interviews with a diverse set of individuals who recently pursued legal support to assist with their auto insurance claims. While the exact motivations of the claimants varied from person to person — ranging from complex accidents to negative past insurance experiences — several common threads emerged.

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Reason 1: Complex Cases Require Expertise

One of the main reasons people sought legal help was the complexity of their cases. Accidents involving significant injuries or disputes with insurance companies often required specialized legal knowledge to navigate. For claimants like Brad J., a 30-year-old man from Chicago, who found himself overwhelmed by the details of his case, having an attorney with experience in similar situations was invaluable.

"I wanted an attorney who had more experience dealing with cases like mine and could provide guidance on the process and potential outcomes," Brad explained, emphasizing the reassurance that expertise brought to the process.

Similarly, Chrissy A. from Dallas appreciated how her attorney handled all communication with the other insurance company. "It took about 6-7 months to resolve and get me compensated," the 35 year-old recalled. Without that guidance, managing the claims process would have been an additional burden during an already stressful time.

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Reason 2: Severe Injuries Drive Legal Help

When accidents result in severe injuries, the need for expert legal guidance becomes even more critical. For claimants like Chrissy A., the physical and emotional toll of the accident made it difficult to manage both recovery and the claims process.

"After the accident, I was dealing with a lot of pain and medical issues, so having a lawyer handle the case was a huge relief. I couldn’t focus on recovery and fight with insurance at the same time," she explained.

In more severe cases, like that of Mary S., whose daughter required surgery after an accident, the complexity and severity of injuries made professional legal representation not just helpful, but essential. "My daughter sustained significant injuries, including the need for surgery, which required professional legal handling," the 60-year-old Scarsdale, NY resident shared, highlighting the critical role her attorneys played in her complex cases.

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Reason 3: Accessible Contingency Fee Structure

One of the key barriers to hiring an attorney is often the perceived cost. However, the contingency fee model — where attorneys only get paid if they win the case — helped alleviate financial concerns for many claimants.

"The contingency fee model made it easier for me to make the decision to hire an attorney since I didn’t have to pay unless I received a settlement," said Brad J., pointing out how this structure allowed him to seek justice without the burden of upfront costs.

Similarly, Mary S. shared her initial hesitation due to cost concerns. "I was initially afraid to hire an attorney due to cost concerns, but the attorney explained they only get paid if they win a percentage of the settlement, so there was no risk."

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Reason 4: Negative Past Insurance Experiences

For many claimants, past negative experiences with insurance companies were a driving factor behind hiring an attorney. The frustration of poor service, inadequate communication, or feeling shortchanged in previous claims pushed people to seek legal representation to ensure they were treated fairly this time around. Attorneys can help balance the scales, especially when claimants feel outmatched by insurance companies' legal resources. This desire for fair treatment and peace of mind drives people like Brad J. to avoid repeating bad experiences and seek legal expertise from the start.

Brad J. recounted his frustration with an earlier claim: "After dealing with my insurance company in a previous accident, I knew I needed an attorney this time to avoid being shortchanged. They made the process so frustrating and difficult last time, I didn’t want to take any chances."

Lauren F., a 45-year-old from Baton Rouge shared a similar sentiment: "I had a bad experience with my insurance company in the past where they were not responsive, and I felt like I was fighting them alone. This time, I didn’t want to go through that again, so I hired an attorney right away."

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Reason 5: Better Outcomes with Attorneys

Claimants who hired attorneys generally experienced better outcomes, including higher settlements and more favorable resolutions. The specialized expertise attorneys bring, from negotiating with insurance companies to managing complex claims, often resulted in more substantial compensation than claimants would have achieved on their own.

Lauren F. was satisfied with the resolution of her claim, stating, "I was satisfied with the resolution of my claim once the process was completed, including having my vehicle repaired and receiving compensation."

Mary S. also emphasized the impact an attorney had on her case, saying, "The lawyer was able to get a much better outcome than if I had handled it alone."

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Putting People First in Auto Claims

Behind every auto insurance claim is a person dealing with emotional, physical, and financial stress. The decision to hire legal help can often stem from complex circumstances, severe injuries, or distrust in insurance companies. By understanding these human experiences and motivations, insurance professionals can better contextualize where their policyholders are coming from and what compels them to take action. 

Stepwise Innovation partners with insurance companies to understand their policyholders as humans first, and premiums second. This empathy-driven approach helps our clients uncover new insights that foster stronger relationships, drive new product growth, and create a more human insurance industry. 

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