Why Won’t The Insurance Company Just Settle?

Clients often don’t understand why insurance companies take such an adversarial position with their claims for personal injuries. Many clients are even shocked when an insurance carrier offers an alternative version of the accident which completely eliminates their insured from fault for the injury. Despite most insurance carriers’ initial opposition, the truth is that most offer to settle claims prior to a trial; with exception to only fraudulent claims which are a topic for another article. More than 90% of personal injury cases settle before trial! It is important however that an injured person not focus on this settlement percentage.

If you need an attorney after an accident you not should focus on that attorney’s ability to settle your case. Obtaining a settlement offer is not an accomplishment but a by-product of an insurance carrier’s mathematical calculations and its general opinion of your attorney. Insurance companies process and settle literally hundreds of thousands of cases each year. While most settle, the amount of the settlement offer and your satisfaction with it are a direct reflection of an insurance carrier’s fear that your attorney will effectively present your case to a jury and receive a substantial financial award.

Insurance carriers maintain information on cases they settle along with the cases that go to trial. They compare the results of these cases to your situation. They compare your injuries, your personal background, the circumstances surrounding the accident and geographic location of your accident. Comparing your case with previous matters provides a carrier with insight in to potential theories of liability against their insured and the probability of success of those theories. The geographic location provides the carrier with a general understanding of a potential jury pool’s values, potential biases along with a potential juror’s opinion as to the financial value of pain and suffering. In most cases, a filed lawsuit won’t change a carrier’s position that your case is worth nuisance value.

Nuisance value is a very low financial award offered to make you go away for literally pennies on the dollar value of your actual injuries. It doesn’t take into account any of the analysis mentioned above. Sadly there are many attorney who advise their clients to accept these nuisance settlements because they have failed to properly investigate and evaluate the case

Insurance companies don’t make meaningful or substantial settlement offers until after “discovery” is complete on your case. Discovery is the legal process during which each side learns about the accident. Discovery takes two forms: written and oral. Written discovery are interrogatories (written questions) and requests for the production of documents about the incident or your injuries. Oral discovery are depositions (questions and answers under oath). While the carrier and your attorney may conduct some informal settlement negotiations over the telephone, during or after discovery, a firm trial date normally expedites the settlement process.

Most personal injury attorney state their client’s settlement position in a formal demand letter. This letter briefly outlines the case, the law, and finally justifies the demand based on their client’s injuries, medical treatment and the client’s previous lifestyle. While an insurance carrier will review the letter, it will more than likely fail to persuade the carrier to make a reasonable settlement offer. Effective settlement negotiations start with an attorney who has a strong reputation for professionalism and an equally strong reputation for aggressive advocacy with the carrier.

Being an aggressive advocate does not mean that they attorney is rude or hostile to the opposing party or their attorney. Hostility is the ultimate form of unprofessionalism and it is usually a sign that the attorney is unprepared for the case. Hostility damages an attorney’s reputation with the insurance carrier, a judge, other attorneys, and a jury. It is important however not to confuse civility with weakness. Our firm prides itself on its civility, it professionalism but it equally values our reputation for aggressive advocacy.

An aggressive advocate goes beyond memorializing a client’s settlement in a short letter. An aggressive advocate takes the time to assemble a settlement presentation which articulates the case and provides support for the settlement demand. The formats vary but settlement presentations, in many cases, take the form of professionally produced documents or video comparable to a college admission prospectus or a luxury automobile brochure.

Take the time to learn about an attorney before you hire him or her to take your personal injury case. Evaluate the attorney during your initial consultation. While it is obviously essential that he possesses a clean professional record free of ethical violations, look beyond this essential quality. Evaluate his track record, the organization of his office, the professional quality of his written materials, and even the amount of time you waited to see him for your initial consultation. If your attorney’s initial presentation is unprofessional, it is a strong indication of his dedication to your success. Remember your attorney is your advocate. He is your mouthpiece so choose him or her wisely. Your attorney’s skill, preparation and attention to detail will directly determine your satisfaction and your success.