When someone’s negligence injures another person, they can seek compensation for injuries through the personal injury claims process. This process involves filing a claim against a relevant liability insurance policy held by the at-fault party, such as an auto liability or business insurance policy. The insurance provider servicing this policy will assign a claims adjuster to evaluate the claim.
Based on their evaluation, the claims adjuster can decide to compensate the claim as submitted, deny the claim and provide a written reason for the denial, or offer to settle the claim out of court for less than its stated value. The victim can file the claim as a lawsuit if the insurer fails to provide fair compensation, and a judge or jury can decide on liability and compensation owed to the claimant.
The vast majority of personal injury claims settle before trial. Often, the initial settlement offer given by the claims adjuster will be only a fraction of the claim’s full value.
An experienced personal injury lawyer will negotiate with the insurance provider to convince them to increase their offer. Here is a look at how settlement negotiations with an insurance claims adjuster work.
Why Most Personal Injury Claims Settle out of Court?
Many people believe the goal of an insurance company is to provide coverage to protect the finances of those harmed by their insured’s negligence. An insurance company’s real goal is to make money off the premiums they collect for providing insurance. They avoid losing money by limiting the amount of money they’re required to pay out to claimants.
Insurers also typically look to avoid litigation, which is expensive and poses an uncertain outcome in which the court can order the insurance provider to pay the claim’s full value or more. To control the cost of their insured’s liability, insurers will generally seek to settle for as low of an offer as the claimant will accept.
Enter the Claims Adjuster
An insurance claims adjuster is an insurance company employee who is responsible for protecting the company’s bottom line by controlling the payouts the company is required to make on claims. They do this by investigating the accident first to determine that their insured was liable for causing harm to the claimant. They will evaluate the documentation provided by the claimant and their attorney to determine whether the insured’s policy covers the claimant’s losses due to the accident.
While investigating the claim, the claims adjuster will:
- Review the details of the claim and the policy to look for exclusions that would prevent the claim from being compensable.
- Interview all parties involved to obtain their testimony, and look at evidence such as police reports and surveillance video showing how the accident occurred.
- Review medical information about the claimant’s injury to determine if the claim’s value is appropriate.
They Work for the Insurance Company, Not For You
This detail is essential to a claim: the claims adjuster works for the insurance company, not for the claimant. Despite telling claimants they are on their side, their decisions are not to “help the claimant out” or ensure they have the compensation they need after experiencing the costs and the impacts of serious injury. They work to limit the amount the insurer is legally required to pay the claimant and convince the claimant to accept the lowest possible amount.
Why You Need an Attorney to Handle Settlement Negotiations?
When an insurance claims adjuster is dealing with a claimant who does not have the benefit of an experienced attorney assisting them with their case, it is not unusual for the adjuster to engage in tactics designed to reduce the claim’s value or even eliminate it.
Some of these tactics include:
- Deliberately delaying a response to the claim. Claimants only have a limited time to file a claim in court, known as the statute of limitations. Once this period has expired, the claimant can no longer use the court process to seek compensation for the claim. Without the threat of litigation, the insurance company will likely be able to avoid settling the claim.
- Offering a ridiculously low settlement for the severity of the injuries incurred. These low settlement offers often have fake deadlines to pressure the claimant to accept or “lose compensation entirely.”
- Requesting more information than necessary to evaluate the claim. Insurance claims adjusters will often ask the claimant to authorize the release of their entire medical history when they only need a limited amount of medical information about the claimant to render a decision. If the claimant agrees to release their medical records, these will often be searched with a fine-tooth comb for the claims adjuster to find a pre-existing condition to blame for the claimant’s current injury. Insurance providers are only responsible for compensating for the worsening of a pre-existing condition due to the accident caused by their insured, not the condition itself.
- Disputing medical treatment and medical charges, stating that the treatment was unnecessary and the claimant should have already recovered from their injuries.
- Misrepresenting the benefits available through the policy. They may tell the claimant there is no compensation available for non-economic damages, which involve the impacts the claimant experienced as a result of their injuries, such as physical pain and suffering, emotional distress, inconvenience, and loss of the enjoyment of life. Non-economic damages often constitute 50-80 percent of what a judge or jury will award to a personal injury claimant.
An experienced attorney understands the law well enough to avoid being manipulated by the insurance claims adjuster. They can protect their client’s claims by managing communication with the claims adjuster. Their experience also assists them in valuing the claim to ensure they include all compensable impacts and expenses. They also have a team of legal professionals to gather the evidence and documentation needed to prove the at-fault party’s liability and justify the established value of the claim.
Personal injury lawyers can negotiate skillfully, guide their client through decisions about their claim (such as accepting a settlement), and communicate the important points of the claim to the adjuster. They also know the formalities and requirements involved in litigation and can fight the insurance company in court if they refuse to compensate the claimant fairly.
The Settlement Process
Many people believe that when they submit a third-party claim against an at-fault party’s insurance policy, they will immediately receive a check, and life will go on. In truth, the settlement process is generally more complex than that.
Here is a look at some of the common steps in a settlement negotiation:
- The claimant’s attorney will generally wait until the claimant has reached maximum medical improvement to value a claim. This point in the claimant’s recovery is when their physician determines that their condition has stabilized and will likely not improve, even with additional medical treatment. Valuing the claim at this point provides a clearer picture of the expenses of the injury and likely future expenses to provide continued treatment of the complications arising from permanent injuries.
- The claim is submitted and evaluated by the claims adjuster. They make a settlement offer that is generally far below the claim’s value. The attorney then begins back-and-forth negotiations with them to get them to increase the offer to a level the claimant will accept. While the negotiations are taking place, the attorney is also providing information to their client to help them understand how the claim is valued and what settlement amount will pay the claim expenses, with some left to get life back on track.
- When the claims adjuster makes an offer that the claimant determines constitutes fair compensation for the expenses and impacts of their injury, their attorney will communicate their acceptance of the offer to the insurance provider. The adjuster will produce a settlement agreement featuring a variety of terms. While compensation is the main aspect of the agreement, the two sides often negotiate other provisions, such as whether either party is permitted to disclose the settlement amount publicly.
- Along with the agreement, the at-fault party’s attorney will prepare a release of liability for the claimant to sign. This release states that the claimant waives their right to take additional legal action regarding the accident or injury. The release is sent to the claimant’s attorney, who will review the document’s language and ensure that the terms are acceptable.
- Once the claimant signs the agreement, the attorneys will motion for the court to dismiss any lawsuit and instead approve the settlement. The court will issue an official order of settlement generally within 30-60 days of filing the agreement.
- The insurance provider will process the payment for the settlement and send the compensation directly to the claimant’s attorney. The claimant’s attorney will then satisfy any medical liens placed on the settlement by the claimant’s creditors, such as healthcare providers who treated the injury and are waiting for payment. The attorney will then withdraw their designated percentage for attorney’s fees from the proceeds.
- The attorney and the claimant will meet to sign documents to finalize the case. They will then release the remaining proceeds to the claimant.
If You Can’t Afford an Attorney, Should You Try to Negotiate a Settlement on Your Own?
An experienced personal injury attorney is crucial in seeking compensation for your claim. An attorney can help prevent negative outcomes, such as a denied claim for lack of evidence showing liability or documentation to confirm the claim’s value, failing to file a lawsuit within the statute of limitations, or losing claim value due to adjuster tactics.
Fortunately, personal injury lawyers ensure that anyone needing legal assistance has access to them. Personal injury lawyers use a contingent fee billing method, meaning they do not require a retainer to begin working on the case and do not bill clients hourly for work related to the case. Personal injury claimants do not see a bill from their attorney at all.
Instead, when the claimant hires an attorney to assist them with their claim, they will be asked to sign a contingent fee agreement. This agreement outlines the attorney’s services and designates a percentage of the claim compensation as their payment.
The claimant will not pay for services if the attorney does not garner a compensatory award either through a settlement or a court decision. However, when compensation is received, the attorney will deduct the agreed percentage for their fees before releasing the remainder to the claimant.
If you’d like more information about settling a personal injury claim and how an attorney can help you, contact an experienced personal injury lawyer for a free case evaluation. Negotiating a settlement can be stressful and tricky, so have someone in your corner who is qualified and ready to fight until you reach a fair settlement.