Artificial Intelligence Is Dramatically Changing Car Insurance Claims Lawsuits
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Artificial intelligence (AI) is the driving force behind the digitization of our lives. It has changed how many industries operate and car insurance is no exception.
From calculating annual premiums to determining car insurance claims payouts, the industry is increasingly reliant on the fledgling technology.
Recently, another use has been found for artificial intelligence, and that is adjudicating claims lawsuits between insurers and claimants. AI is speeding up the process, but questions remain over whether or not it is helping victims of car accidents.
Artificial intelligence is changing almost every aspect of car insurance.
Is artificial intelligence beneficial to insurance customers?
Artificial intelligence is used in many areas of car insurance, including risk assessment and for calculating claims payouts.
Insurance companies say this is a good thing. AI is quick, so customers receive payouts faster (it also takes less time to have a claim denied). In addition, the savings from increased efficiency will lead to lower premiums.
Skeptics assert that rates keep going up and claims payouts are getting smaller. The consumer benefits of AI are not yet obvious.
That said, most experts agree that AI will change car insurance for the better. AI is improving risk evaluation, which means safe drivers can look forward to cheaper coverage.
MORE: Artificial Intelligence Is Poised to Play a Key Role in Preventing a Costly Car Insurance Crime
AI is changing the car insurance claims process
Forbes explains how AI is disrupting the insurance claims process.
For example, when a personal injury claim begins, an insurance adjuster will assess the extent of the injury and its impact on the victim’s future earnings.
The insurance company feeds the adjuster’s report into an AI-powered computer system. The system reviews the claimant’s details against all of the information stored in its database, and determines how much the insurer should pay.
Unfortunately for claimants, AI calculated payouts are relatively low. One explanation is that AI, while a simulation of human intelligence, does not replicate human emotion. The payouts are the bare minimum the insurance company can get away with.
In speaking to Forbes, Robert Hunter, director of insurance at the Consumer Federation of America, says ““Before you settle, ask to see the calculation used to arrive at the offer…It’s often below what the real payout should be.”
A new use for AI: car insurance claims lawsuits
If an accident victim receives an offer they are not happy with, the first recourse is to negotiate with the insurance company.
Often, the insurer will point to the AI’s findings, citing its objectivity in assessing the amount of the payout, and refuse to budge. A significant number of victims then find an attorney to begin a personal injury lawsuit.
Forbes describes how this process has also become reliant on artificial intelligence. Lawyers representing both the plaintiff and defendant will consult one of three major information systems: Bloomberg Law, WestLaw Edge, or Lex Machina.
These AI-powered systems can sift through billions of pieces of relevant litigation data from across the U.S., and quickly show what kind of settlement is likely, based on similar cases.
Attorneys on both sides are using the same tools, so it’s not surprising that 97% of claims lawsuits are settled with insurers before having to go to trial.
Save on car insurance using the power of AI
Artificial intelligence is certainly good for one thing, and that’s finding cheap car insurance.
An intelligent AI-based tool like Jerry is the easiest and most effective way to find a car insurance policy that is customized for you.
After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to.
If that’s not enough, consider this, the average Jerry user saves $879 a year on car insurance!