Reasons Why Insurance Companies Settle Cases
By Dan Baldyga
When it comes to the reality of the way things work in the actual, daily experience of insurance adjusters, involving claims negotiations and settlement, it's vastly different from the stipulations found in the "Formal Law". That is, legal theory, as it's written and allegedly supposed to work.
In the real world of insurance claims settlement, "compromise", which has nothing to do with the law, is the order of the day. It's commonly accepted among claims professionals, (because that's what makes their life so much easier) that in any given case there's almost always a likelihood of negligence to both sides, rather than just one driver. What this boils down to, in practical terms, is this: irregardless of the law practically no claim is without merit or totally lacking in value of some sort, especially if that "value" is simply to "get rid of it". I know this to be true because, "I've been there and done that". However, that concept has nothing to do with the law!
Compromise is the order of the day, even in cases of questionable liability, but only if the compromise will position the insurance company so they can steal the claim for less money than it would cost to handle it to the bitter end.
On the other side of that coin, moderate or severe degrees of doubt (as to your responsibility for the accident) will be heaped on you by the adjuster - - so as to justify his denial of your claim. Unfortunately he's often successful in this subterfuge, which is nothing less than legal larceny, because in total and bitter frustration many who have a claim (of at least some value) call it quits, pack it in and give up the chase. Is that pure law in action? Hardly!
TRIAL VALUE: Insurance companies consider what they believe to be a claim's trial value when determining the amount they're willing to pay in the settlement of a claim. They have a staff of lawyers and trial assistants who evaluate the likelihood of their winning a case if it were to go to trail. The costs of preparing for (and then proceeding into) a courtroom battle can skyrocket. They may choose to settle rather than doing battle. They do this for only one reason - - it's in their financial interest to do so. If they begin to smell an odor that tells them you may obtain an attorney to represent you, with your case ending up in a courtroom (and the big bucks that always entails) this may force them to pony up some dollars.
CONTACTING THE STATE DEPARTMIENT OF INSURANCE: Every state has a Department, or Commissioner, or Bureau of Insurance that overseas the insurance companies in that particular state. Each department has a consumer complaint division which can pressure an insurance company to settle a claim. If the adjuster you've been dealing with has refused to make any offer at all, has engaged in what you consider to be unethical conduct, or has made what you believe is a ridiculously low offer, yet refuses to explain why, you have cause for a complaint.
The mere mention of a complaint to the state department of insurance may bring the adjuster around to making a better offer. Adjusters would rather not have to deal with a complaint and they positively don't want copies of them ending up in their personnel file.
Your complaint to the state insurance department will accomplish several things. First, someone in the claims department of the insurance company you're dealing with (other than the adjuster who's handled your claim) will now become aware that there's a claimant (you) who intends to do whatever it takes to obtain some settlement dollars. That will often inspire somebody to take another look at your case and come up with a better offer. Also, it evolves into a costly effort for the insurance company because a complaint with the state insurance department will add an additional layer of work, supervised by an extra contingent of home office personnel. When it's realized this will likely come to pass they'll try harder to dump your claim.
