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Reasons Why Insurance Companies Settle Cases

Reasons Why Insurance Companies Settle Cases

  By Dan Baldyga
About Dan Baldyga
  Dan Baldyga has a lifetime of experience in the field of motor vehicle accidents, personal injury and compensation.
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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.

The vast majority of insurance adjusters dream of one day being promoted to a higher claims position within the company they work for. They know, in their black heart, if their personnel file has correspondence flowing in from claimants they've handled (plus copies of the letters which have been sent to the insurance commissioner) those will, somewhere down the line, be read by one of his companies executives. In many instances this will be a man who doesn't want a "problem" employee like that adjuster spluttering, splashing and crashing about his office area causing headaches and extra work within the framework of that particular executive's command. The adjuster is fully aware that complaints like that could keep him banging away, out on the road forever, and prevent him from moving inside and up the corporate ladder.


It's only when faced with a determined claimant, who's willing to wait and haggle and won't go away, that the adjuster handling your case will often be told by his immediate superior, who is usually an inside Claim Supervisor, to make a compromise payment. The day will arrive when that supervisor will call the adjuster into his office, look at him in exasperation, wave your file at him, and declare, "See this case? Get it resolved - - get rid of it!" His supervisor has taken this position because he's sick and tired of seeing the same case coming up on diary, crossing his desk again and again, month after month. He doesn't want it to provide him with any more grief and/or loss of time. He'll take a deep breath and growl emphatically, "Dump it and move on". (I was a Claims Supervisor and then later a Claims Manager so I know how all this comes down. Believe me when I tell you - - adjuster's will always do what they're told by their superiors)!

Adjusters are normally assigned 50 to 100 new claims a month. That means, just to stay even, they must close at least that many each month. His supervisor, to avoid the ever present problem of being buried alive with cases piling up, one on top of the other (extra work that keeps him from getting home on time for dinner or, even worst, forgoing golf dates with company attorney's who pick up the bill at the areas most exclusive country clubs) gets exasperated and finally tells his adjuster "get rid of it". This comes to pass because, your case is gathering dust, heaping frustration on all those associated with it and maybe even forcing you (the claimant who has refused to disappear) to become so frustrated, agitated and disappointed that you turn your case over to a lawyer and it ends up in costly litigation.


DISCLAIMER: The only purpose of this claim tip is to help people understand the motor vehicle accident claim process. Neither Dan Baldyga or Vince Ciulla make any guarantee of any kind whatsoever; NOR do they purport to engage in rendering any professional or legal service; NOR to substitute for a lawyer, an insurance adjuster, or claims consultant, or the like. Where such professional help is desired it is the INDIVIDUAL'S RESPONSIBILITY to obtain said services.

Copyright (c) 2005 by Daniel G. Baldyga All Rights Reserved

Dan Baldyga's fourth and latest book Auto Accident Personal Injury Insuraece Claim: (How To Evaluate And Settle Your Loss) can be found on the Internet at This book reveals "How To" successfully handle your motor vehicle accident claim, so you won't be taken advantage of. It also goes into detail regarding the revolutionary BASE (The Baldyga Auto Accident Settlement Evaluation Formula). BASE explains how to determine the value of the "Pain and Suffering" you endured because of your personal injury.

Additional Information provided courtesy of and Warranty Direct
© 2000-2007 Vincent T. Ciulla

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