In this article we review yet another motor vehicle case in which an insurance company made a low ball offer. Insurance company adjusters routinely make low ball offers in cases that involve injuries which do not cause a permanent harm to the victim. The number of such cases is so voluminous that paying out even a few thousand dollars less on thousands of such cases each year can result in a significant savings.
The reasoning is that when victims are faced with a choice between taking a smaller amount upfront versus spending years in litigation in order to recover only a few thousand dollars more many of these victims will chose to take the smaller settlement now. And there are also plenty of attorneys whose practice consists of settling a large volume of these kinds of cases. Early in my career I actually interviewed at a law firm which had a settlement quota for their attorneys. In such practices, the attorneys become little more than adjusters themselves.
But when the case involves a more serious injury a different calculation comes into play. The biggest worry of most insurance company adjusters is the risk of exposure. Insurance companies have huge databases against which they can compare individual cases. They can determine what similar cases have settled for. They can also determine how much juries have awarded
for such cases.
They can pull out the history of the attorney handling the case - is this an attorney that settles most cases or is this an attorney willing to go to trial? How re the defendant and victim likely to come across to a jury? Will the victim or the defendant be more credible? Will a jury identify with and be sympathetic to the victim? Does this an attorney who recovers significant verdicts at trial or does the attorney tend to recover less than other attorneys who have handled similar cases? Given the liability of the insured, the nature and extent of the damages to the victim, the jurisdiction where the case would go to trial, and the success history of the attorney handling the case, is this a case that could result in a verdict in excess of the policy limits? Is the reserve on the case sufficiently large?
With the answers to these types of question the insurance company adjuster will make a risk calculation in order to decide the maximum amount for which they are willing to settle the case. Experience plaintiffs attorneys understand this process and recognize that sometimes insurance company adjusters just plain get the calculation wrong. When this happens the attorney simply needs to thoroughly prepare the case for trial and let a jury decide.
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