Recently I worked on a case where the family in the car had, roughly and conservatively speaking, over one hundred thousand dollars in medical bills. The driver suffered severe injuries to his neck, back, and shoulders, the front-seat passenger had similarly severe injuries to the same areas, along with a pretty severe concussion that necessitated a series of scans and tests to ensure she did not have a traumatic brain injury. Defendant, in this case, was a commercial vehicle and as such has a million dollar policy on it. Match made in heaven, right? Thankfully all those brain scans and neurological tests will be paid for and the victims in this car accident won’t have to eat the cost of necessary medical treatment that is in no way their fault? I’ll stay out of exact numbers on this one, but let’s just say that the insurance company isn’t tendering an offer that would actually cover their medical expenses. It is still early days, and this is their first counteroffer. So, what we do from here? Well, my friends. Before we cry havoc and let loose the dogs of war. Litigation. We get to negotiating.
You might be wondering why we would want to negotiate in the first place. You might be wondering why we don’t just sue the pants off of them when we got their first deeply insulting offer? Well first of all you can’t do that. There is a whole process that you have to follow before you can sue an insurance company. That is called making a bad faith claim. I’m not sure if I’ve written an article on that yet. But if I haven’t, I will get to that soon. Second, the insurance company actually has the right to take their time on offering you a settlement. They don’t have to make a final offer immediately. They can try and lowball you, which they will do. The first offer is literally always low. Even if you are desperate, taking the first offer from your insurance company is a terrible idea. They will try to get you to sign a release form for maybe 1/5th of what your claim is worth as soon as possible. How do they know what your claim is worth? It is literally their business. They have massive databases cross-referencing accidents, injuries, and locations that tell them what your car wreck is worth. Their goal is to get you to settle for less than that. How do they know they are getting you to settle for less than what the claim is worth? Because they will probably make an offer to you within a few weeks of your accident. Were you Life Flight-ed away from a terrible accident? Did you have to undergo dangerous and invasive surgery? Were experimental measures used to keep you alive? Expect a letter offering you $4,500.00 three weeks out.
The reason for this is incredibly cold-blooded. If you were in a bad wreck, you aren’t doing your best. It’s probably just hitting you exactly how expensive this whole thing is going to be. If you are like most Americans you probably don’t have a ton of money in savings. If you got hurt you’ve probably missed some work. Both of those add up to be pretty short on money. But you need to know how much your case is really worth and to do that you need to finish. Your medical treatment. Soft tissue damage? Herniated discs? Get checked out by a chiropractor and an orthopedic. After they clear you and confirm you’ve got no surprises waiting to send your back to snap city, then you can say “Hey, my medical bills were this high.” When you do that you can start thinking about how to structure your demand. The standard amount to ask for is what the cool PI industry people call “xspecials” or “times specials”. This is the number of your concrete expenses related to the accident (medical, lost wages, travel, etc.) multiplied by a number related to severity. Just get knocked around and are healing with no lingering issues? The standard amount to ask for is three times special damages. Severely injured and dealing with a long recovery? We might ask five, seven, or even ten times special damages. Because living the rest of your life in pain is a pretty tough row to hoe.
This ended up being more complex to explain than I anticipated which means that we are out of space for this week. Look forward to next time where I’ll continue this look into negotiation and we’ll continue our drive to educate you on some of the basics of the law and maybe have a little bit of fun along the way. Remember though, these articles are just to give you an introduction to some common legal topics. They are no replacement for a good attorney. So please make sure you consult with an attorney before taking legal action and if you’ve been in a car wreck and want to make sure you get a fair deal from an insurance company.