Low Ball Offers In Motor Vehicle Cases And How To Handle Them

Low Ball Offers In Motor Vehicle Cases And How To Handle Them

Why is it that sometimes victims of motor vehicle accident receive what is clearly a low ball settlement offer from the defendant’s insurance company? The answer lies in understanding the economics of case settlements for insurance companies.

Consider that victims frequently receive a low ball settlement offer in cases involving injuries which ultimately resolve themselves. These are the types of cases in which the victim, after a certain amount of time, essentially fully recovers from his or her injuries. Insurance companies process claims of this nature thousands of times every year. Even a savings of a few thousand dollars per such claim, when multiplied by thousands of cases, would yield a significant savings for these insurance companies.

But for these savings to materialize means that the victims have to agree to accept a settlement which is lower than what they might ultimately achieve if they go forward with a trial. Yet this is precisely what happens. Insurance companies know that many people who have been injured in a motor vehicle accident face a number of challenges. Even when the injuries from the accident do not leave any permanent disability the victim may incur expenses related to the treatment of those injuries and may lose time from work. Both of the ease may bring about financial pressures which act as an incentive for accepting a settlement now rather than waiting possibly years before the case goes to trial. Sometimes victims simply decide that it is not worth the time and effort to go through a lengthy litigation process that may involve additional lost time from work and subjecting oneself to sometimes highly personal and intrusive questions by the defendants and their attorneys.

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In addition, there are some law firms which incentivize attorneys to quickly settle cases thereby providing the law firm a steady cash flow while keeping down the costs associated with lengthy litigation. There are law firms that actually place a quota on the amount that their attorneys need to recover each month. While there may not be a requirement that the cases be settled rather than tried the lawyers at such firms quickly learn that it is a much more efficient way to meet their quota by spending a small amount of time on settlements rather than a large amount of time preparing a case for trial.

From the perspective of the insurance companies, given the millions of dollars in possible savings from settling a percentage of cases for a low settlement, it is worth the small of amount of risk associated with having to go forward to trial if the case does not settle for the low settlement offer. Again, given that these are cases which do not involve a permanent injury the amount the victim could potentially recover from a jury verdict is unlikely to offset the savings.

Of course there are many factors in addition to the nature of the injury that go into the calculation of which cases will receive a low settlement offer. If a meritorious case does receive a low settlement offer an experienced attorney with a successful record of achieving good results at trial will not be tempted by the offer. If the victim is willing to pursue the case to the end the attorney will thoroughly prepare the case for trial so as to obtain the best possible result for the victim.

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