Insurance Companies: How Do They Decide What’s A Fair Settlement?

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Insurance Companies How Do They Decide Whats A
Fair Settlement?
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• Dramatic trials, judges and juries are the
  stuff of Hollywood. Heres how insurance
  companies decide whats fair in the real world
• Matt Damon and Julia Roberts, step aside its
  time to let go of the myth that big insurance
  payouts happen in the dramatic fashion we see in
  Rainmaker and Erin Brockovich.
• In Canada, at least, the question of whats
  fair? comes down to a careful negotiation
  between the defense (the insurance company) and
  you, the victim.

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• First and foremost, your team needs to
  include a personal injury lawyer. Having worked
  as a defense lawyer for an insurance company
  prior to opening my own firm, I understand how
  the negotiations work from both sides. I know how
  insurance companies think.
• Insurance companies arent charities and
  while you pay premiums so that you can be covered
  in the event of an accident, they are not working
  FOR you. Thats important to keep in mind. While
  you never want to take an adversarial stance with
  your adjuster or the companys lawyer, you want
  to keep this in mind at all times while your
  claim is being settled.

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• Basically, every personal injury claim is set
  up at the insurance company with whats called a
  reserve fund.
• A reserve fund is the sum of money that they
  think your claim is likely to payout. This amount
  is determined at the start of your claim although
  you will never be told exactly how much of a
  reserve has been set aside.

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Why is this reserve fund number important?

• Because insurance companies are profit making
  institutions. They have a board and shareholders
  to whom the company must report their profits.

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• The insurance companys motivation is to
  payout less than the reserve, so while they want
  to pay whats fair, they will take an extremely
  conservative view.
• On the other side, our job is to build a case
  that that proves to the insurance company how
  much you really need to move on with your life
  over the long term and ensure the insurance
  company is not underestimating your case in order
  to save money.

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• We want to increase the money in the reserve
  fund. They want to decrease it.
• Each reserve needs to be relatively accurate
  as it is difficult if not impossible to raise it
  later and this is where having an experienced
  lawyer on your case from the beginning is
  important. After the reserve is set, the claim is
  investigated and settlement negotiations can
  begin.

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Call A Lawyer

• Given what Ive said above, it should be clear
  that the first thing you need to do post-accident
  is to contact your doctor. Make sure have your
  doctor write down everything that youre feeling.
  Dont hold back.

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• You see, tiny symptoms soon after an accident
  that seem insignificant can unexpectedly grow
  into larger problems as time goes on, so its
  good to get it all down on paper and dont judge
  of whats important and whats not let your
  doctor do that.
• The next step? Contact a personal injury
  lawyer, who can help you to build your case
  accurately. We know what to say and the questions
  to ask.

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• Third, refer anyone from the insurance company
  who contacts you to call your lawyer. Dont
  engage with them directly because, as I said
  above, if the reserve amount determined by the
  insurance company is low because, working alone
  you failed to present the right information about
  your injury, its going to be hard if not
  impossible to increase it later.
• Start as you mean to finish by getting a
  lawyer involved who will steer you, and your
  case, in the right direction.

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• Some Things The Insurance Company Will Be
  Looking For
• 1. Did you mention your injury to the first
  responders at the accident scene?
• Im referring to how much you shared with the
  paramedics, at the emergency room or to your
  family doctor the next day? In my opinion, the
  more the better, because, as I said before,
  seemingly insignificant symptoms can be a big
  deal down the road.
• This kind of information is vital to the
  insurance companys assessment of compensation
  i.e. setting up that reserve fund. The theory is
  that if you didnt complain of injury at one of
  those timeswhere notes are taken and kept for
  records purposeshow injured can you really be?

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• 2. Inconsistencies in your medical records.If
  your doctor isnt writing EVERYTHING down, your
  insurance company will question the validity of
  your injury claims.
• It might seem odd to be telling your doctor
  how to do their job, but ultimately, the success
  of your claim hangs in the balance of this kind
  of information, so better too much than too
  little.
• Dont be shy, if your doctor is a bit rushed
  and not recording what you say, ask them to get
  writing. Tell them why. Medical professionals
  understand your injury better than anyone, and
  the accuracy of these records is critical to both
  your team and the insurance company in
  determining whats fair.

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• 3. Impatience on your part to settle.Yes, you
  have expenses and those are important
  considerations, but in the negotiation of a
  settlement, the legal procedures take time.
  Typically 1-2 years.
• Its a long time when youre dealing with so
  much stress, but ultimately, both your lawyer and
  your insurance company need that time to evaluate
  the true extent of your injuries and a fair
  settlement offer.
• Trying to rush things only creates errors and
  misunderstandings that can undermine a settlement
  negotiation.

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• Consider the case of a concussion. Sometimes
  you dont even know you have a concussion at the
  beginning, yet concussions can have serious
  long-term ramifications down the road. If a
  concussion victim settles immediately, only to
  realize that the injury is much more serious down
  the road than first anticipated, they are unable
  to go back.
• Bottom line? Your case must move at the same
  pace as your healing journey never be pressured
  into an early settlement by either the insurance
  company or your lawyer.
• I have a lot more details on the breakdown of
  why it takes this amount of time on another post.

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• 4. Inconsistencies in your behaviour.Heres
  where the time lag for settlement of 1 to 2 years
  can be a problem.
• You need to be 100 honest all of the time
  about your current medical status with your
  doctor and with your lawyer.
• If you are claiming that your injury prevents
  you from engaging in normal household
  maintenance, dont be mowing your lawn or tarring
  your driveway.
• Surveillance is often used by insurance
  companies to verify claims, and while it can be
  misleading, it can also provide damning evidence
  when it comes down to deciding compensation.

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• For example, you might have decided that you
  felt a bit better and could take care of your
  hedge clipping. The video surveillance shows you
  doing just that. Of course, the video doesnt
  show how you end up going back inside and laying
  flat on your back for three days afterwards,
  because you overdid things. But from the
  insurance companys perspective, you
  misrepresented your abilities and the damage is
  done.

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• Social media is another way insurance
  companies will research your claim, and Ive
  talked about this in another post. To summarize,
  posting your latest trip pictures to the
  Caribbean that include a few snaps or video
  snippets of your parasailing adventure, will lead
  the company to think that you are not as injured
  as you have claimed. Keep your social media
  chatter to a minimum, if you need to do it all.

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• Finally, a word to the wise Contrary to
  popular belief (that is perpetuated by the
  inflammatory language many personal injury
  lawyers use in their advertising), hiring a
  lawyer is not viewed as adversarial by insurance
  companies. I can tell you this first hand. In
  reality, its standard practice and makes good
  sense.
• Forewarned is forearmed. If you have any
  questions, it never hurts to reach out and speak
  to a personal injury lawyer.
• http//derekwilsonlaw.ca