Your Insurance Company Doesn’t Play FairPosted on February 15,2016 by lawrzwp
Many people believe that Insurance Companies utilize a multiplier factor in determining how much compensation to award them for injury. They believe that by simply totaling their gross medical expense
and multiplying this amount by a predetermined factor, say 3, that an appropriate award is established. Is
it really this simple? Of course not. We as consumers would like to believe that the system operates fairly,
that factors such as “pain and suffering”, physical impairment, and “loss of enjoyment of life” are
the primary considerations when evaluating claims. Would it interest you to know that the true determinant
of whether a claim settles is a combination of other factors that have little to do with the degree of
pain and suffering an injured party suffers? These factors are actual business variables that attempt to
quantify risk and cost assessment as the primary basis for determining the value of a claim.
Insurance companies, like any other business with a product to sell, market their product, the by-product of which we commonly refer to as “a claim.” And, what is a claim? It is simply a bundling of risk and cost containment factors to which the company has assigned a specific dollar value. It attempts to market this product by settling a claim for an amount less than the assigned value, thereby generating a profit. Every day, insurance carriers have to decide how much money to offer in claims settlement. In making this
determination, carriers attempt to predict how much money they will likely expend defending the claim, meaning how much will it cost to pay a defense attorney and prepare the appropriate legal papers and
documentation to diminish or reduce a plaintiff ’s claim.
Every insurance claim value and all injury claims are profiled based upon cost factors established from
historical claims experience. Insurance companies assess the plaintiff‘s ability to communicate effectively,
their physical health, credibility, prior civil or criminal involvement, and financial standing.
Is the plaintiff believable?
Do they make a good first impression?
Are they physically appealing?
Are they in need of immediate financial help?
Another assessment relates to the quality of the plaintiff’s legal counsel, their prior trial experience and ability
to convey a story of suffering which would cause a lay individual to determine that fairness and equity
justifies the imposition of a substantial cash award against the “at-fault” party.
Also, do the marketing studies suggest that the local economy where the claim originated supports a verdict in favor of the plaintiff, or, are their political, economic, or social factors present that would cause a jury to diminish a jury award. Many communities provide notoriously low jury verdicts, while others consistently
provide high awards for compensation.
So, what is happening?
How is it possible that a claim tried in Wayne County, Michigan can result in a substantially higher jury
verdict then one tried in Toledo, Ohio, a community which provides consistently low monetary awards?
Needless to say, the complexities of injury litigation require a deep understanding of the community and
demographics where the claim will be tried. It requires both a sociological understanding of the plaintiff and
a keen awareness of the psychology of communication. While most injury victims may feel comfortable with utilizing a multiplier to determine the value of their claim, only through expert representation
can the full extent of a person’s damages be understood so that an appropriate amount of compensation
can be requested. Injury victims must understand that all injuries are not alike, and finding comfort in utilizing
a multiplier factor to determine fair compensation only accentuates the injury and ascribes a false value, which, in turn, results in unfair and egregious awards.
If you’re looking for a fair representation, give us a call for fill out the form for a free no-obligation analysis of your case.