The Insurance Company Cookbook
This is an interesting article regarding one attorney’s perspective on dealing with insurance companies in personal injury cases. In You are Not in Good Hands with Allstate the author talks about how Allstate and some other insurance companies use a computer program called "Colossus" to determine the minimum they would have to pay a claimant to maximize their profits. Despite the sinister 1960’s Star Trek image of a giant, brooding mainframe in the center of a strange planet, Colossus and other similar programs are real and can have a serious impact on anyone injured in a motor vehicle accident.
I have had experience both representing insurance companies and injured parties in car accidents. Prior to Colossus, and with other insurance companies that have not followed Allstate’s lead, the claim examiners who work for the insurance company, and the defense attorney have a lot of leeway in valuing and settling a case. In addition, there seems to a human perspective that drives settlements that a computer lacks. If the computer decides the case is worth $10,000, without any new data, it won’t change. If a claims examiner or defense attorney decides the case is worth $10,000, but they can get the case over and done with an additional $1000, they usually will do so.
In North Carolina, the legislature has recognized the problems of insurance companies using economic clout and the cost of litigation to low-ball injured persons by passing N.C.G.S. Sec. 6-21.1 .This statute allows a trial judge to award attorney fees for any verdict in a personal injury case involving an insurance company less than $10,000. Since the jury isn’t told about this provision, sometimes you have the absurd result of the defense attorney arguing for more damages from the jury to get just over the $10,000 line and the plaintiff’s attorney arguing for less. Nevertheless, it is one way that can allow a plaintiff to win without it costing him money.
If the injured party or his attorney doesn’t want to go all the way through a trial, don’t expect any offer from the insurance company to increase after the initial one without significant new evidence being developed.