Picture this: You’ve just been in a car accident. You’re dealing with injuries, medical bills, and the stress of being out of work. Then your insurance adjuster calls – friendly, helpful, and seemingly on your side. They tell you they want to “take care of everything” and get this resolved quickly.
But here’s the hard truth that many people discover too late: that adjuster doesn’t work for you, and they’re not your friend.
As personal injury attorneys in Arizona, we’ve seen countless clients who initially trusted their insurance adjusters, only to realize later that they were being taken advantage of. The reality is that insurance adjusters work for insurance companies, and their primary job isn’t to help you – it’s to save their employer money.
Let’s pull back the curtain and examine what insurance adjusters are legally allowed to do, what they’re not allowed to do, and how Arizona law protects you when they cross the line.
Understanding the Adjuster’s Real Role
When you file an insurance claim, you’ll likely interact with a claims adjuster – either from your own insurance company (in a first-party claim) or from the other driver’s insurance company (in a third-party claim). While these adjusters may present themselves as helpful problem-solvers, their fundamental duty is to their employer: the insurance company.
The adjuster’s job is to investigate claims, determine liability, and settle claims for the lowest amount possible while staying within legal boundaries. This creates an inherent conflict of interest when you’re trying to recover fair compensation for your injuries and damages.
In Arizona, insurance adjusters must be licensed by the state, which requires passing an exam and meeting certain qualifications. However, having a license doesn’t mean they’re working in your best interests – it simply means they’ve met the minimum requirements to handle insurance claims professionally.
What Adjusters Are Legally Allowed to Do
1. Request Documentation and Information
Adjusters have the legal right to request relevant documentation related to your claim. This can include:
- Medical records related to your injuries
- Police reports and accident documentation
- Employment records to verify lost wages
- Photos of the accident scene and vehicle damage
- Witness statements
However, they cannot demand irrelevant medical records or personal information that doesn’t relate to your claim. For instance, if you injured your back in a car accident, they cannot request mental health records from five years ago unless there’s a legitimate connection to your current claim.
2. Conduct Reasonable Investigations
Adjusters are allowed – and actually required – to conduct thorough, reasonable investigations of claims. This might involve:
- Inspecting damaged property
- Interviewing witnesses
- Reviewing medical records and reports
- Consulting with experts when necessary
Under Arizona law, insurance companies must “immediately conduct an adequate investigation” of claims. This means they can’t simply deny your claim without doing their homework first.
3. Request Recorded Statements
Adjusters can ask for recorded statements, but here’s where many people get into trouble: you’re not legally required to give one. Many adjusters will make it sound mandatory or urgent, but you have the right to decline or postpone until you’ve consulted with an attorney.
If you do give a recorded statement, be aware that adjusters are trained to ask leading questions that might undermine your claim. They’re particularly skilled at getting you to downplay your injuries or accept partial responsibility for the accident.
4. Make Settlement Offers
Adjusters can make settlement offers – and they often do so quickly, sometimes within days of an accident. While this might seem helpful, early settlement offers are typically far below what your claim is actually worth. Remember, once you accept a settlement, you generally cannot seek additional compensation later, even if your injuries turn out to be more serious than initially thought.
What Adjusters Cannot Legally Do
While adjusters have significant leeway in handling claims, Arizona law places important limits on their conduct. Here are the key things they’re prohibited from doing:
1. Deny Claims Without a Reasonable Basis
This is where Arizona’s bad faith insurance laws come into play. Under Arizona law, insurance companies breach their duty of good faith and fair dealing if they “intentionally deny, fail to process or pay a claim without a reasonable basis.”
The landmark Arizona Supreme Court case Noble v. National American Life Insurance Company established that a claim for bad faith requires the plaintiff to show the absence of a reasonable basis for denying benefits of the policy and the defendant’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.
This means adjusters can’t simply deny your claim because they feel like it – they need legitimate, reasonable grounds for denial.
2. Delay Claims Unreasonably
Arizona law requires insurance companies to handle claims promptly. Insurers must “immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim.”
While some delay might be reasonable (for example, waiting for medical records), deliberately dragging out the process to frustrate you into accepting a lower settlement is illegal bad faith conduct.
3. Misrepresent Policy Language or Legal Requirements
Adjusters cannot lie about what your policy covers or misrepresent Arizona law. They cannot tell you that you’re required to accept their first offer, that you have no right to an attorney, or that your injuries aren’t covered when they actually are.
Unfortunately, this happens more often than you might think. Some adjusters will deliberately misinterpret policy language to avoid paying claims, hoping that policyholders won’t know better.
4. Force You to Use Specific Doctors or Repair Shops
While adjusters might recommend certain healthcare providers or auto repair shops, they cannot require you to use them. You have the right to choose your own doctors and repair facilities. Be wary of adjusters who insist that you must use their “preferred providers” – this is often a tactic to control costs and limit your compensation.
5. Threaten You or Use Coercive Tactics
Adjusters cannot threaten you, use intimidation tactics, or pressure you into quick decisions. If an adjuster tells you that an offer is “take it or leave it” or that you’ll get nothing if you don’t accept immediately, they’re likely engaging in bad faith tactics.
The “Delay, Deny, Defend” Strategy: A Legal Perspective
One of the most important things to understand about the insurance industry is the widespread use of what’s known as the “Delay, Deny, Defend” strategy. This approach has been thoroughly documented in academic research and legal literature.
Insurance companies now often try to delay payment of justified claims, deny payment altogether, and defend these actions by forcing claimants to enter litigation. While this strategy might seem unethical, many of its components operate within legal gray areas – which is exactly why having an experienced attorney is so crucial.
Delay Tactics
The first D is delay. A claim is made and the demands begin: You need to fill out a form, you did not fill out the form correctly, you need to fill out another form, your claim is too late, your claim is not covered back and forth, back and forth.
Common delay tactics include:
- Repeatedly requesting the same documentation
- Claiming forms were filled out incorrectly when they weren’t
- Taking excessive time to respond to communications
- Scheduling and rescheduling inspections or medical exams
Deny Tactics
Claims are denied for any number of reasons: tenuous interpretations of policy language, willful misunderstanding of the facts, and even out-and-out fraud.
Adjusters might deny claims by:
- Disputing obvious liability
- Claiming injuries are pre-existing when they’re not
- Arguing that medical treatment is unnecessary
- Misinterpreting policy language to exclude coverage
Defend Tactics
If all else fails, a person with a legitimate claim may have no choice but to force the insurer to defend itself in court. This all but ensures a delay of several more years while the issue is litigated.
Insurance companies know that most people can’t afford lengthy court battles, so they use this to their advantage.
Arizona’s Bad Faith Insurance Laws: Your Legal Protection
Arizona has some of the strongest consumer protection laws in the country when it comes to insurance bad faith. Understanding these laws can help you recognize when an adjuster has crossed the line from aggressive claim handling into illegal bad faith conduct.
The Implied Covenant of Good Faith and Fair Dealing
In Arizona, all insurance contracts have an “implied covenant of good faith and fair dealing.” In plain English, this means that your insurance company is required to deal with you (the “insured”) honestly, fairly, and in good faith so that you can receive the benefits of the insurance contract.
This covenant means that insurance companies can’t just focus on their own interests – they have a legal duty to consider your interests as well.
What Constitutes Bad Faith in Arizona
Arizona courts have established specific criteria for bad faith. Arizona holds that an insurer may be liable for the tort of bad faith if it intentionally denies or fails to process or pay a claim without a reasonable basis for such action.
Importantly, An insurer may not escape bad faith liability by delegating its claims handling responsibilities to an agent or adjuster. This means that if an adjuster acts in bad faith, the insurance company itself is responsible.
The Arizona Unfair Claim Settlement Practices Act
Arizona has additional protections under the Arizona Unfair Claim Settlement Practices Act. This Act (along with the Arizona Administrative Code) lists specific standards of conduct that must be met by all insurance companies.
While the Act doesn’t allow you to bring a lawsuit based solely on your insurance company’s failure to meet state standards, it can be used as evidence in bad faith cases to show that the insurance company’s conduct was unreasonable.
Damages Available for Bad Faith
If you can prove bad faith in Arizona, you may be entitled to more than just your original claim amount. Potential damages include:
- The original amount owed under the policy
- Consequential damages (additional costs caused by the delay)
- Emotional distress damages
- Attorney’s fees
- Punitive damages (to punish the insurance company)
In Arizona, punitive damages will usually be limited by the court to a ratio of punitive damages to compensatory damages that doesn’t exceed 4:1.
Common Adjuster Tactics You Should Recognize
Based on our experience representing injury victims in Arizona, here are some of the most common tactics adjusters use – and how you should respond:
The Quick Settlement Offer
Within days of your accident, an adjuster might call with what seems like a generous settlement offer. They’ll often say things like “We want to take care of this quickly for you” or “This will help you avoid the hassle of a long claims process.”
The Reality: Early settlement offers are almost always far below what your claim is actually worth. The adjuster is hoping to close your claim before you fully understand the extent of your injuries or have time to consult with an attorney.
Your Response: Politely decline and tell them you need time to fully understand your injuries and damages. Consider consulting with a personal injury attorney before accepting any settlement.
The Friendly Interrogation
Adjusters are trained to be personable and trustworthy. They might ask casual questions about your injuries, your daily activities, or your medical history – often in ways that seem like friendly conversation.
The Reality: Everything you say can and will be used to minimize your claim. If you mention that you’re “feeling a bit better,” the adjuster will use that to argue your injuries aren’t serious. If you say you were able to grocery shop, they’ll claim you’re not really injured.
Your Response: Keep communications brief and factual. Don’t discuss your injuries in detail, and don’t speculate about your recovery. Consider having your attorney handle all communications with adjusters.
The Surveillance Threat
Sometimes adjusters will mention that insurance companies “keep an eye on” claimants to ensure their injuries are legitimate. While they might not explicitly threaten surveillance, the implication is clear.
The Reality: Insurance companies do sometimes conduct surveillance, but they cannot trespass on your property or violate your privacy rights. They can only observe you in public places where you have no reasonable expectation of privacy.
Your Response: Continue to follow your doctor’s orders and be honest about your limitations. Don’t let the possibility of surveillance prevent you from engaging in activities your doctor has approved.
The Independent Medical Exam Request
Adjusters might request that you see a doctor of their choosing for an “independent” medical examination (IME).
The Reality: These exams are rarely truly independent. The doctors are often paid by insurance companies and have financial incentives to minimize injuries. However, depending on your policy language, you might be required to attend.
Your Response: Review your policy carefully and consult with an attorney before agreeing to an IME. If you must attend, bring a witness if allowed and document everything that happens during the exam.
When You Need an Attorney
While not every insurance claim requires an attorney, there are several situations where legal representation becomes essential:
Serious Injuries
If you’ve suffered significant injuries – especially those requiring surgery, extensive medical treatment, or resulting in permanent disability – you should consult with an attorney immediately. Insurance adjusters are not qualified to assess the long-term impact of serious injuries, and they have no incentive to ensure you receive adequate compensation for future medical needs.
Disputed Liability
If the insurance company is claiming you were partially or entirely at fault for the accident, you need legal representation. Arizona follows a comparative negligence system, which means your compensation can be reduced by your percentage of fault. An experienced attorney can help investigate the accident and build a case to minimize your assigned fault.
Bad Faith Conduct
If you suspect the insurance company is acting in bad faith – denying your claim without reasonable basis, unreasonably delaying your claim, or using deceptive tactics – you may have grounds for a bad faith lawsuit in addition to your original claim.
Complex Cases
Some cases involve multiple parties, commercial vehicles, defective products, or other complicating factors that make them difficult to handle without legal expertise.
Protecting Yourself: Practical Steps
Here are some concrete steps you can take to protect yourself when dealing with insurance adjusters:
Document Everything
Keep detailed records of all communications with adjusters, including:
- Dates and times of phone calls
- Names of people you spoke with
- Summary of what was discussed
- Copies of all written correspondence
This documentation can be crucial if you later need to prove bad faith conduct.
Be Careful with Recorded Statements
Remember that you’re generally not required to give a recorded statement to the other party’s insurance company. If you do decide to give one, keep your answers brief and factual. Don’t speculate about what happened or how you feel.
Don’t Sign Anything Without Understanding It
Insurance companies often send documents that look routine but actually contain important legal language. Don’t sign medical authorizations, settlement agreements, or any other documents without fully understanding their implications.
Keep Track of All Damages
Maintain detailed records of all expenses related to your accident, including:
- Medical bills and treatment records
- Lost wages documentation
- Property damage estimates and receipts
- Transportation costs for medical appointments
- Any other out-of-pocket expenses
Follow Your Doctor’s Orders
Continue all recommended medical treatment and follow your doctor’s advice. Insurance companies will look for any excuse to claim that your injuries aren’t serious or that you’re not taking proper care of yourself.
The Bottom Line: Know Your Rights
Insurance adjusters are skilled professionals who are trained to minimize claim payouts while staying within legal boundaries. They’re not inherently evil people, but they work for companies whose interests are directly opposed to yours.
Arizona law provides significant protections for injury victims, but these protections only work if you know about them and assert your rights. In Arizona, insurance bad faith claims have a 2-year statute of limitations, which begins to run the moment the insurance company commits the bad act. This means that if you suspect bad faith conduct, you need to act quickly to protect your rights.
The most important thing to remember is that you don’t have to navigate this process alone. While insurance companies have teams of lawyers and adjusters working to minimize your claim, you have the right to level the playing field by hiring your own experienced attorney.
Understanding Your Leverage
One thing many people don’t realize is that you have more leverage than you might think. Insurance companies don’t want to go to court any more than you do—litigation is expensive and time-consuming for them as well. However, they’ll only offer fair settlements if they believe you’re serious about protecting your rights and willing to fight for fair compensation.
Having an experienced personal injury attorney on your side sends a clear message that you understand your rights and won’t be taken advantage of. This often leads to better settlement offers and more respectful treatment throughout the claims process.
Moving Forward After an Accident
If you’ve been injured in an accident, the most important thing is to focus on your recovery while protecting your legal rights. Don’t let insurance adjusters pressure you into quick decisions or settlements that don’t adequately compensate you for your injuries and losses.
Remember that insurance adjusters are not your friends—they’re professionals doing a job that requires them to minimize your compensation. By understanding their tactics and your rights under Arizona law, you can protect yourself and ensure that you receive the compensation you deserve.
The path to fair compensation isn’t always easy, but with the right knowledge and support, you can navigate the insurance claims process successfully and focus on what really matters: your recovery and your future.
