I had the privilege of representing a very nice woman who was struck from behind in a traffic collision. Her small Ford Ranger was hit by a young teenage driver with sufficient force to push the Ranger forward into the car in front of it which then resulted in another collision ahead of that car. The damage to the Ranger did not look significant from the outside, but the impact caused our client to strike her knee on the dashboard and jam her hip. This sounds like a simple case, right? Well, you would be wrong.
We Had to Get the Insurance Company to Take the Claim Seriously
When we first started this case the insurance company looked at this case more as a nuisance worth only a small sum to resolve it. We disagreed. To try to convince the insurance company, we had to get medical reports showing that our client needed surgery. That still was unconvincing, but we did receive a small increase in the offer. Next, we agreed to allow her to be seen by the insurance company's doctor. This is called an "independent medical exam." In reality, there is little independent about it. These doctors are hired and paid for by the insurance company. However, on occasion, these doctors are truly independent. Our client's exam resulted in a favorable medical review. The doctor’s findings were similar to those found earlier by our client's doctor. The insurance company should have been ready to settle, right? Wrong again. In fact, the insurance company barely moved up from its prior offer.
As the Insurance Company Stalled, We Resorted to a Deposition
Despite our best efforts to resolve the dispute, the insurance company would still not grant the claim's full policy limits. We had to file a lawsuit. After engaging in the exchange of discovery, written questions and documents, we made a demand once again for the policy limit. Still no settlement.
Finally, we agreed to our client's deposition being taken. This is when the opposing attorney asks questions of a person and the responses are provided under oath. Our client did a very good job and understood her role in responding to the questions and making herself a believable witness. Additionally, the insurance company's lawyer saw that she was in pain and that she was unable to move quickly. At the end of the deposition, I took the time to discuss the case with the lawyer and turn up the heat on the insurance company and its attorney.
I told the attorney that I would give the insurance company one last chance to settle the case within the policy limits of the defendant and if this demand was not accepted, then the opportunity to settle within the policy limit would be forever withdrawn. Within one week, the case settled for the policy limits, two and a half times the amount of the previous offer.
The Amount of Coverage You Have Can Be a Factor In How Much Your Claim Settles For
There is a general rule that if you reasonably attempt to settle a case for an amount at or within the policy limits of the culpable party, the insurance company must evaluate the demand with the motive of protecting the interest of the insured, not in the insurance company's own interest. If the insurance company does not settle the case, then it can be responsible for a judgment amount in excess of the policy limit if the demand for settlement was reasonable and the refusal to settle put the insured at risk. The failure to settle may lead to the possibility of an insurance bad faith claim. The process of getting funds above the insurance policy limit almost always requires a trial unless the insured has funds to contribute to the settlement as well as a desire to contribute funds to settle.
The decision to make a settle limit demand is dependent on the seriousness of the injury and the amount of the available insurance. For example, if you have a case worth about $20,000, and there is an available insurance policy of $100,000, a policy limit demand of $100,000 would do little good to motivate a company to settle the case. However, if the insurance policy was $100,000 and the seriousness of the injury made the claim was worth $150,000 then a policy limit demand may result in a settlement of the case in order to protect the insured.
A Two-Edged Sword
While the case gets settled, a good thing, the total value of the claim does not get paid because there is just not enough money to cover all the losses, a bad thing. On the other hand, when the policy is very large, a good thing, but the damages are well within the policy limit, the insurance company may take advantage of the positional strength to vigorously defend the case because there is little to no risk to their insured, a bad thing. In the latter situation, the cost to bring the action goes up because of aggressive defense tactics which in turn reduces the amount of money available to the injured person when the case is over. Another bad thing. In the former situation, we look to see if there are any other sources of insurance or assets that can contribute to paying for the losses. Generally, there are none, or the cost of trying to get those extra assets is so expensive that the benefits are offset by the costs and the risks associated with the trial.
The value of a case compared to the amount of insurance is one important consideration when deciding how, or if, a case can be settled to avoid trial. A good personal injury lawyer will look into all the options and considerations and should focus the outcome on the best financial result for the injured party, the client. If you have questions about your claim please contact us today.