Maximizing Value of an Insurance Claim (Personal Injury or Workers Comp)

When prospective clients call a lawyer because they’ve been injured, whether it is a workers compensation claim, a personal injury arising from a car wreck, dogbite, slip and fall or other type of personal injury, they usually want to know a little bit about what to expect when making a claim.

Traywick & Traywick warns injured people that the process of making a personal injury claim is long and tedious – particularly for the lawyer assisting the injured person. Traywick & Traywick will tell clients, dig in for the long haul – because nothing happens fast in the legal world.

Sometimes Traywick & Traywick tells prospective clients that if they are looking for a quick settlement they might be better off calling Bill Green or Extreme Akim, because that’s what those guys do.

SETTLEMENT & NEGOTIATION PRIMER

There are two basic approaches to getting money for an injury or damage to a person when it is somebody else’s fault: 1. work with the insurance company providing coverage for the at fault party, or 2. file a lawsuit and prepare to litigate the claim.

Traywick & Traywick almost always files a lawsuit in order to recover for personal injury damages. Typically, we won’t even contact an insurance company to discuss settling unless the circumstances warrant doing so. And circumstances rarely do but here are examples where they would:

• A good reason to settle with an insurance company outside of the litigation context is that the injuries are so severe that the insurance carrier is likely to tender the policy limits. Policy limits, in the insurance world, means basically that the insurance company only has to cover a certain amount of damages before it gets to wash its hands and turn its back on its insured.

• Example: If an at fault party purchased minimum liability vehicle insurance in South Carolina, 25,000 dollars, and that driver then kills a heart surgeon because he didn’t stop at a red light, that driver’s insurance company is going to take one look at the demand letter and pay the claimant 25,000 dollars right away. From the insurance company’s point of view, it makes no sense to spend a minute of administrative time or a dollar on attorneys fees when it is abundantly clear that a wrongful death suit where a drunk driver kills a heart surgeon is going to result in an enormous judgment in favor of the dead doctor. Realizing that, the insurance company simply pays the most it has to pay according to the coverage it provides.

• Example: slightly less stark than the first example, is where an at fault driver rear ends another driver and injures her. Let’s imagine in this example that the injured driver had to have surgery to fix a broken leg and got 25 stitches in her face and was out of work for 3 months. The medical bills and lost wages can be shown to be 79,000 dollars in this example. The lawyer representing the injured driver telephones the insurance company and states: I’ve got 79,000 dollars in ‘specials’ ( a form of damages that are the gravemen, often, of a personal injury claim ) how much coverage do you have? The insurance adjuster states: 50,000 dollars, I’ll fax you the ‘dec page’ (more lawyers speak – a ‘dec page’ means a declarations of coverage page of the at fault driver’s insurance policy). The lawyer confirms that coverage is 50,000 dollars and demands that the insurance company tender the policy limits. In this scenario, there is a very good chance that the insurance company will do so. It doesn’t make any sense to spend time/money/energy defending a lawsuit if you are going to lose and a loss will mean tendering the policy limits anyway.

• And there is another reason insurance companies tender policy limits when liability is clear and verifiable recoverable damages exceed the policy limits by some margin: Tyger River. But that is a discussion for a different blog entry. Suffice it to say that in circumstances where the special damages exceed policy limits and liability is clear, Traywick & Traywick will attempt to obtain a settlement directly from the insurance carrier of the at fault party, and we will do so prior to filing suit.

However, most of the time, damages are not going to exceed policy limits. Or liability is not clear or there is a causation argument that might mitigate the recoverable damages, or the plaintiff is a serial litigant, or there are multiple parties involved more than one of whom may be partially at fault, or the damages are speculative. There are a million reasons why an insurance company may not want to tender its policy limits. But there are a million reasons why an insurance company might not want to settle before having its own lawyers put the claim to the test, as it were, by testing all three elements of a typical tort claim: fault, damages, causation.

You may have seen the lawyers that advertise on TV. Those are lawyers that never litigate cases. They always settle with the insurance company and they almost always do so without ever filing a lawsuit at all. They are leaving most of the claim (money) on the table by doing it that way.

Settlement means ‘compromise’ in the legal context. What it means is, one party pays money in exchange for the other party not taking his claim to a jury to determine fault and damages. That is always the motivation behind a settlement, which means that’s what a settlement is all about at its core.

The reason Traywick & Traywick nearly always files suit in a personal injury case is the obvious fact that whoever wishes to settle the suit, simply by broaching the subject of a compromise settlement, demonstrates that he wishes to avoid taking a case to a jury to decide. It doesn’t take much thinking about it to realize that a party who offers to settle is going to have to be ready to give up enough money to make the other side abandon his legal claims. So essentially, one side bribes the other side out of going forward with a full blown trial. That is a settlement. Whoever offers to settle first, basically, loses.

Thus, everything a lawyer does on a case should be done with a view toward preparing for trial. That is how a lawyer maximizes the value of a personal injury case – by working the case up and having it ready for trial. Of course, getting a case ready for trial is a lot of work and costs a good deal of money, often. A lawyer that is looking to settle a lawsuit from day one is never going to obtain what that lawsuit is really worth because unless the case is developed and ready for presentation to a jury, the insurance company knows that you are looking to settle.

By filing suit and never initiating settlement discussions, Traywick & Traywick telegraphs to the defendant that the case is being readied for an actual trial. By doing so, the plaintiff never signals an unwillingness to take his claim to a jury and therefore gives no indication that the claim can be settled for less than full value, more or less.

Traywick & Traywick has seen plenty of lawyers take on personal injury cases and immediately begin trying to settle the case with the insurance carrier. By trying to settle a case before even filing suit, you might as well send a letter to the insurance adjuster that says: “THIS CLAIM CAN BE SETTLED FOR LESS THAN IT’S WORTH”.

Traywick & Traywick tries to maximize the value of every case and that means filing suit and getting the case ready for trial. If the insurance company wants to avoid a trial, they will have to pay off the claim.

If that is the attitude you want in the lawyer representing your personal injury or workers compensation claim, contact us today.