As any experienced personal injury attorney in Broward County, Miami-Dade County or Palm Beach County will tell you, auto insurance companies, especially the larger auto insurance companies with catchy taglines and commercials, have become increasingly more reluctant to properly compensate automobile accident victims pre-suit– especially in cases involving “soft tissue injuries” or “low impact”.
What is the insurance companies’ recent shift in philosophy?
A large number of auto insurance companies have determined that accident victims who do not hire personal injury attorneys or hire inexperienced personal injury attorneys will (eventually) accept any pre-suit offer (even a “low ball” offer) the insurance company makes and not file a lawsuit.
As a result of a majority of personal injury lawyers settling cases without filing suit (i.e. settling pre-suit), the auto insurance companies’ risk of being hit with excess verdicts after trial substantially decrease. Over time, the reluctance of South Florida personal injury attorneys to file suit galvanizes the insurance companies’ brass to encourage their adjusters to make lower, and lower, and lower initial settlement offers.
Why is this change in philosophy significant?
Let’s say for example that you were “rear-ended” at a stop light by an at-fault driver who carried $50,000.00 of bodily injury (“BI”) insurance. After a few months of treatment (chiropractor, physical therapist, physiatrist, orthopedic surgeon, neurosurgeon, etc.) you are diagnosed with a lumbar herniation and obtain a surgical recommendation. At the time of the demand, you have incurred $6,000.00 in out-of-pocket medical bills. Your future medical bills (with surgery) are estimated at an additional $60,000.00. The following example assumes you have PIP coverage (with no deductible) and no health insurance.
A few years ago, the at-fault automobile insurance company would have tendered their client’s $50,000.00 policy upon receipt of your lawyer’s demand letter. The insurance company chose to properly compensate the accident victim for his/her injuries rather than to litigate the case.
Flash forward to today, the at-fault automobile insurance company makes you an offer to settle somewhere in the range of $10,000.00-$15,000.00. The at-fault automobile insurance company only compensates you for your medical bills (sometimes with a small multiplier) and places little to no weight on your surgical recommendation or future medical bills. The insurance company does not compensate you in any way for pain and suffering. Assuming you accept their $10,000.00-$15,000.00 offer, after your lawyer takes his/her cut and you satisfy your outstanding medical bills, you receive somewhere in the range of $0.00 – $5,000.00.
Why the shift in philosophy?
Auto insurance adjusters believe that most accident victims, chiropractors, and some radiologists and orthopedics in South Florida are liars – liars in the respect that (1) the accident victims’ injuries are inflated or made up, (2) the accident victims’ injuries are pre-existing, and/or (3) the surgeon made a bogus surgical recommendation which is medically unnecessary.
By only offering to pay for your medical bills (with a small multiplier), the insurance adjuster weeds out (what they consider) the “lying” accident victim and inexperienced personal injury attorney who is unwilling (or afraid) to fight for their client (i.e. file suit). In essence, the insurance company “calls your bluff” and waits and sees if you undergo surgery and/or files suit before offering commensurate settlement monies.
Shocking to some, despite the fact that the aforementioned client walks away with a paltry amount of money, an alarmingly high number of personal injury attorneys in South Florida strongly push these clients to accept the at-fault insurance adjuster’s offer instead of filing suit.
For these reason, many of the larger “tagline and commercial heavy” auto insurance companies have the following philosophy as it relates to accident cases in South Florida: risk getting burned by an experienced personal injury attorney 1 out of 10 times as we [the insurance company] will still come out ahead by “burning “the unrepresented victim or inexperienced personal injury attorney the remaining 9 out of 10 times.
Following the example above (rear-ended / lumbar herniation):
INSURANCE COMAPANIES OLD PHILOPSPHY
Tender the $50,000.00 policy on all 10 victims
$50,000 X 10 = $500,000.00.
INSURANCE COMPANIES NEW PHILOSOPHY
Make a low ball offer. 9 out of 10 victims (either unrepresented or with inexperienced personal injury attorneys) will accept the offer pre-suit avoiding litigation:
(Example of the 9 offers) $10,000.00, $10,000.00, $11,000.00, $11,500.00, $12,500.00, $12,500.00, $14,000.00, $14,000.00, $15,000.00 = $111,000.00.
One personal injury attorney takes us [insurance company] to trial and lands an excess verdict in the amount of $300,000.00
The aggregate total of the 10 cases is $411,000.00.
Under this example, the insurance company nets $89,000.00 ($500,000.00 – $411,000.00) following their new philosophy even though they were “badly burned” by the experienced personal injury attorney on one of the cases.
How to ensure that YOU are properly compensated for your injuries and not be in the 90% of victims above?
You can prevent yourself from being in the 90% of burned victims by hiring an experienced personal injury attorney who is willing to file suit (i.e. not always accepting the insurance companies’ pre-suit offer). You should never, ever, ever, ever hire a personal injury attorney who only handles pre-suit matters. Insurance companies do NOT make high offers to these personal injury attorneys because they know their exposure is limited as these attorneys will never file suit. Insurance companies keep track of attorneys in South Florida – they know who files suit and who does not file suit.
Please understand that this does not mean that your personal injury attorney should always file suit (i.e. never accept a pre-suit offer). Sometimes accepting an offer is pre-suit is in all the parties’ best interest. That being said, your personal injury attorney should submit his/her demand with the intention that if the auto insurance company’s offer is unacceptable (which is sadly becoming the norm) he/she is willing to file suit, take the insurance company to task and get you every penny you deserve for your injuries.