1. Preliminary considerations in settling an injury claim
Most accident injury and other bodily injury claims are settled before a lawsuit is filed, and thus before the insurance carrier of a liable party is required to retain an attorney to defend the party at fault. In all likelihood, therefore, initial settlement discussions will be with an insurance claims representative, also known as the claims adjuster. The adjuster is charged on behalf of the insurance carrier with investigating the facts and formulating a fair settlement value.
To evaluate the claimant’s first demand and make a settlement offer on the carrier’s behalf, the adjuster will need to review whatever reports and records are available regarding claimant’s injuries and damages. Indeed, copies of medical reports and bills, employer’s verification of lost earnings, benefits and other losses suffered as a result of being absent from workplace, property damage bills, photographs and estimates, and documentation of other, out-of-pocket losses, will be essential to support the adjusters request to his principals to extend a settlement offer. Thus, cooperating with the insurance company’s requests for the above records is generally a good practice that will likely expedite the settlement process. However, it is generally unwise to volunteer information about your earlier injuries or pre-existing medical condition, since the defense will use this as a basis to deny that the injury resulted from the present incident. However, there are a few instances in which the earlier medical history should be volunteered as where it will enhance the value of the claim – e.g., where the injury in question was a minor one, but aggravated a pre-existing condition, causing severe disability, as the party at fault cannot escape liability by arguing that the damages would not have been incurred but for the preexisting condition.
And, of course, if the adjuster has already found out about the prior medical history, it may be necessary to furnish the pertinent records and reports to show the prior condition was not the cause of claimant’s present disability.
2. Making an Initial Settlement Demand
Claims adjusters rarely make the first settlement offer. Instead, they expect the claimant’s attorney to make an initial settlement demand. It is important to have the “bottom line” figure in mind. Before making an initial demand, determine an absolutely minimum amount you believe the case should settle for. Once a bottom line figure is determined, it should be changed only if new information bearing on the claim’s value surfaces during the negotiation process.
3. Settlement Negotiations
The adjuster will assume that the first figure demanded is negotiable. Therefore, the initial demand should not be the “bottom line” but rather should start higher, leaving room for negotiation. It is important, however, to make sure that the initially offered settlement figure is reasonable to avoid turning off all negotiations.
A good approach for ascertaining a realistic high-low range is to relate the settlement value to recent jury verdicts returned in similar cases.