Many people think that settlement negotiations come right out of a movie. Whether they’re dramatic court scenes or tense moments over a polished conference room table, the reality is far less intriguing and yet, when you know the inner workings, much better.
Settlement negotiations occur over many days, weeks and sometimes months. They’re rarely face to face and for any good attorney, the less drama, the better. There’s also no set time for the process; the longer the insurance company can drag it out, the more likely they will. Fortunately, most personal injury settlements never see the inside of a courtroom, which is good for everyone involved.
How the Process Begins
While there are no definitive negotiations until after the accident victim’s attorney compiles all necessary information, the groundwork is what wins (or loses) cases without a dollar being exchanged. Medical treatment must be completed (or at least expected treatment months must be determined), all medical bills must be gathered and lost wages must be documented.
This is the precursor to negotiations, where many cases get won or lost before the insurance company even sees any physical evidence of damages. Once the attorneys have compiled their information, they submit what’s called a demand letter. This demand letter isn’t just a request for compensation; it’s a detailed analysis of everything—what happened, why their insured is responsible, what injuries were incurred and why a specific amount is required. It’s the attorney’s opening argument before even being in the same room for negotiations.
How They Respond
There’s a standard response from every insurance company: the first number offered will almost always be significantly lower than what was provided. This is not personal. This is not an indicator of whether or not the claim itself is warranted. It’s simply how it goes. Insurance adjusters have their own methods of evaluation and levels of settlement authority and what sounds fair may not be their best offer.
This is where an inexperienced versus experienced Beaumont Personal Injury Attorney makes a world of difference. These offers are to be countered with documentation and negotiations. If an insurance company finds loopholes, that means they didn’t thoroughly evaluate the issue at hand. Medical evidence exists which supports how these low offers are not representative of what injured victims should settle for.
For example, medical diagnostic evidence relative to the insurance company’s determination, daily complications caused by the injury that go beyond medical necessity, similar cases that settled for more or less, etc. Should never just throw out an offer without explanation.
The Insurance Company’s Perspective
Insurance companies are not looking to be difficult (most of the time). They want to pay fair claims but not overreach as well; they’re working for themselves, not the injured party. Objective considerations include medical bills accumulated, proper documentation of lost wages, confirmation that their insured was at fault and whether or not injuries followed doctor’s recommendations.
This is where a gap in receiving medical attention can hurt your case. If someone goes three weeks without seeing a physician post-accident, an insurance company will question how serious the injury was and if it was an injury at all since evidence was not sought immediately. If someone fails to follow through on physical therapy recommendations, it’s perceived that they did not do anything to get better either. While these points are contestable and address doubts and not outright rejection of claims, they do matter in negotiations.
Medical records weigh heavily in negotiations. Insurance companies want to see diagnostic testing and proper recommendations from physicians on future complications from current injuries. They care about temporary versus permanent injuries because it can mean tens of thousands in a settlement.
How A Negotiation Stalls
Sometimes negotiations stall because insurance companies don’t believe that medical claim evidence is compelling enough (you didn’t need that MRI or that physical therapy should have alleviated pain by now). When this happens, attorneys may have to get independent medical examinations or expertise to weigh in on their side.
Ultimately as negotiations unfold, this back and forth should be tempered. The adjuster will come close with their next offer while an attorney can lightly extend their initial ask without conceding too much. They run numbers in their heads like jurors would if this went to trial: that’s why settlements happen in lieu of court.
Settlement vs Litigation Value
The truth is that litigation costs money and effort. No matter how promising of a case an injured victim may have, jurors still have to agree—and if they don’t? That’s time and money lost to legal fees and medical expenses that may have outweighed any winning verdict had it gone through litigation.
When both parties finally make sense of the money numbers—which don’t tend to make sense until they’re put on paper—they happen quickly thereafter. The insurance adjuster will draft a settlement agreement and release which essentially states they will pay that amount if the injured person agrees never to pursue them legally again.
Red flags accompany such documentation as, once signed, there’s no going back.
Money changes hands relatively quickly thereafter—sometimes within a week—sometimes before attorneys get a chance to pay off medical liens and other owed medical bills for the victim. Fees are then subtracted accordingly before delivering a check for what’s left.
Why This Is Important To Know
Settlement negotiations are nothing groundbreaking when you know how they’re supposed to go down. They make sense when it comes to avoiding trial and everyone getting what they want. However, someone has to know what they’re doing when pushing forward—there’s too much at stake for injured victims to make no mistakes about settlements just because they’ve been through enough already.
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