Insurance carriers are like everything else in life: You have the good, the bad, and the ugly. Like restaurants, car dealerships, department stores, and lawyers, there are high end carriers and those who use mass marketing and low premiums to attract customers. If you see a certain insurance carrier on television or in the newspapers constantly advertising low premiums and fantastic claims service, the chances are pretty good that their philosophy on paying claims will be very conservative—this is how they pay for all those flashy television commercials. See The settlement style of large and conservative insurers.
The less you see of a carrier on television, the higher likelihood that your case will settle with it on a reasonable basis without the necessity of having to file suit. Some of these carriers are national while others are more regional. These carriers have better reputations for resolving cases out of court. They favor mediation over lawsuits and often are willing to consider the strength of a plaintiff’s case rather than constantly nit-picking it.
Believe it or not, the adjusters for these companies are markedly different from those who work for huge conservative carriers. The experienced personal injury attorney knows that these adjusters must be approached with a different strategy than the more conservative ones. A personal injury attorney who does not appreciate the difference may very well misread the intentions or strategy of the adjuster. The attorney may think that the adjuster is trying to play hardball when the opposite may be true.
Consider one prominent personal injury attorney’s experience. After working for several months on a case, the attorney sent the adjuster a demand package and waited for a response. Thirty days went by and the attorney did not receive any response so he wrote a short polite letter. Another thirty days went by and still no response. Then the attorney started calling the adjuster but never was able to reach her directly. Finally, close to ninety days after the demand letter, the attorney filed suit and sent the adjuster a polite letter with a copy of the Complaint indicating that he was still open to settlement discussions. He received a telephone call from her requesting a meeting. She wanted to discuss the case and a few others that they had together.
When she came to the attorney’s office, she apologized. The attorney and adjuster talked for about an hour about their philosophies of dealing with personal injury claims. By the end of the visit, the attorney received a reasonable offer on every case that he had with her. Since then they have resolved virtually every single case that they have worked on together including some very difficult liability cases. Even though the adjuster is often late in her responses, she always counters with a reasonable offer and the case is resolved usually with a few telephone calls.
This example is typical of adjusters who work for reasonable carriers and who try to resolve cases rather than put every single one of them into litigation.
Here is another example. The case involved a young woman whose vehicle collided with a truck that was making an improper U-turn. The woman narrowly missed very serious injuries. Fortunately, she received a broken small toe and soft tissue-type injuries only, including neck and back problems. These injuries would have resolved in a fairly short period of time had her case been handled properly.
She had just begun working for a real estate company. The owner referred her to a lawyer who did primarily real estate work. Then, a week after the incident, she was discharged from her employment because the owner of the real estate company did not want to carry her through her disability period. After that, her whole world went to hell in a handbasket. She started treating with chiropractors and massage therapists and also started having severe emotional problems.
She admitted herself into a mental health facility. There she disclosed very personal problems that had occurred during the course of her lifetime, including some horrendous experiences involving people close to her. She left the state and went to another facility where they diagnosed her emotional problems as being related to her childhood and early adult life. They attributed only a small fraction of her emotional problems to the automobile/truck collision.
For the next two years, her case went nowhere. The real estate attorney accumulated a large package of medical bills but very medical few reports, and never sent any medical reports to the insurance carrier. The carrier had no idea about the extent of her injuries or that she was still having problems. After a few years, she finally went to another lawyer for advice. He tried to refer her case to other firms, but nobody wanted to take this very difficult case. Furthermore, she had settlement expectations that were way out of line. People had convinced her that her case was worth hundreds of thousands of dollars.
Eventually, a prominent and skilled personal injury attorney agreed to consider the case. He determined that the case on its very best day was worth between $50,000 and $60,000 and that a conservative carrier would offer less than $20,000. The young woman told the attorney that she just wanted the case to settle as soon as possible. She was tired of dealing with it and recognized that her attorney had not done much at all over the course of the previous three years.
The personal injury attorney realized that the carrier was one of the more reasonable carriers, and the adjuster was one that he respected and trusted. After reviewing the file, the attorney told the woman that a settlement offer under $10,000 was entirely possible but that this particular carrier might be more reasonable. He evaluated the potential offers as follows: a $20,000 offer would be in the C range, $30,000 would be in the B range, and any settlement offer between $40,000 and $50,000 would be in the A range considering the potential jury verdict in this case. He also informed the young woman that a defense attorney would spend a great deal of time discussing her personal emotional problems and would ask that the jury not punish the truck driver for problems that were caused by other people in her life.
The attorney agreed to accept the case on three conditions: 1) a slightly higher contingency fee so that he could pay the other attorneys involved; 2) that she would defer to his judgment on settlement value; and 3) that if she rejected an offer that he deemed to be reasonable, his responsibility in the case would end and he would not be required to file suit on her behalf. She accepted the terms.
The attorney collected as many medical records as possible and noticed that many of them absolutely hurt the case. There were many references to personal problems that would cause any young woman to be emotionally traumatized. Other than the broken small toe, her physical complaints were mostly subjective with different diagnoses coming from various physicians and practitioners with such terms as “chronic pain syndrome,” “fibromyalgia,” and other non-specific terms. Some doctors found it very difficult to attribute her present physical problems to the automobile collision of several years prior.
The attorney decided to send the adjuster the entire file without any deletions or exclusions. The attorney told the adjuster in advance that he would find as many documents to support his side of the case as the claimant’s. The adjuster was pleased that the attorney trusted him with the complete file. After three months or so, the adjuster called to say that he was ready to discuss settlement.
The two exchanged pleasant conversation for at least a half hour before discussing the case. The adjuster told the lawyer that his claims supervisor had put a very low value on the case and that, to him, it was essentially about a broken toe and a few neck problems that would have resolved in a few to several weeks. Though the medical bills approached $15,000, most of them related to emotional trauma that easily could be traced to personal problems over the course of the client’s life. The adjuster did agree, however, that a sympathetic jury could feel sorry for her.
The adjuster then asked the attorney what he thought the highest value to be, that is, the highest figure that could be expected from a jury. This was an extremely important question because the attorney’s credibility was being tested at this point. No demand letter had ever been sent in this case. The attorney told him that he thought the best possible outcome would be something approaching $100,000 but that a verdict above that was certainly very unlikely.
“What would your theme be?” the adjuster asked, this question being straight to the point. The attorney replied, “That my client’s life was going well until this incident—she had been able to cope with all of her problems until this auto collision put her entire life into a frenzy. The incident and the fact that she could have been killed put this fragile woman into a tailspin.”
The adjuster’s next question is one of the best negotiation tactics used by adjusters who know the business well. “What do you think your worst case scenario would be?” he asked. The attorney responded, “The jury giving us our medical bills or something even less, especially if they thought we were overreaching by asking for a high verdict.”
The adjuster then used another effective tactic, floating a number in the air to see if the attorney would grab it. The adjuster told the attorney that he guessed that the demand would probably be in the $80,000 range but that the attorney would likely settle for anything close to $50,000. When this tactic is used by an unreasonable adjuster, the attorney will be nailed no matter how he reacts. If the attorney jumps at the number by saying, “You’re in the right ballpark,” he is likely to get low-balled. If he rejects the figure outright with righteous indignation, he may be forced to eat crow and file suit.
The attorney simply remarked that he did not like to react to numbers floating in the sky. To have the final word, the adjuster stated that his supervisor would never authorize or pay $50,000. The attorney replied that he hoped the adjuster would be more open-minded, especially if he met the client. The adjuster agreed to bring his supervisor back to the attorney’s office to meet the client.
On the appointed day, the adjuster arrived with the Claims Supervisor. The client was well dressed and, though nervous, did pretty well during the interview-question and answer process. The adjuster threw mostly softball questions that were not too difficult to answer and paid very little attention to her emotional problems that were unrelated to the incident. She was treated with great respect. When the client cried on a couple of occasions, the supervisor retrieved tissues for her. They complimented her on having an experienced attorney in whom they placed a great deal of trust and when they left, they shook hands with her and said that they were confident that the case would resolve. I took this to be an excellent sign and thanked them for coming to the office.
A week or so later, in early December which is perhaps the best time of the year to resolve cases, the insurance adjuster called. He said that the client had made a good impression and he was prepared to make an offer. The offer was $30,000. The attorney countered with a $55,000 demand. Within two more telephone conversations, they arrived at the final settlement figure of $40,000. The client was extremely satisfied.
There are several points to be made about this exemplary case. It is typical of the kind of success you can have when your personal injury attorney knows the insurance carrier and the adjuster well enough to read the signs that the case has a chance of resolving rather than jumping to conclusions and litigation. Most importantly, the client did not want to go to suit and did not want to be deposed about all of her prior personal problems.