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Robert E. Craven & Associates Rhode Island Personal Injury Attorney

How Do Insurance Companies Decide What They Will Offer To Settle Your Case?


Contrary to what many people believe, when you are injured, and someone else is responsible for your injuries, you do not go straight into filing a lawsuit. Usually, there will be a process of negotiation between you and the insurance company or the business on the other side of the case, to see if you can resolve the case, without the necessity of filing a lawsuit.

Insurance Company Offers

Many injury victims find that the other side offers a reasonable amount to settle the case, making the filing of a lawsuit unnecessary. Most accident victims will never see the inside of a courtroom.

But other times, the insurance company makes an offer that seems very low—almost unfairly low. Then, a lawsuit has to be filed (your lawyer will discuss with you the pros and cons of filing  a lawsuit, vs. simply taking the insurance company’s offer).

But how does an insurance company evaluate your case? What makes an insurance company offer a lot of money to settle one case, and just a little money to settle another case?

A lot of factors go into how the insurance company (the Defendant, if the defendant is a self-insured business) evaluates what they are going to offer you.

Risk and Jury Awards

Insurance companies are in the business of lowering risk. The first question they ask themselves is “what is the risk of a large jury award?” If juries were giving out a million dollars for every injury, insurance companies would be offering a lot more money to settle cases.

So, when the insurance company makes a lower offer, that is usually just a reflection of what most—but not all—juries are doing in cases that are similar to yours.

Your Actions are Evaluated

Of course, the jury will also look at factors that may lower their responsibility. For example, if the insurance company feels your injury is worth $50,000, but that it is likely a jury will find you 50% responsible for your own injuries, it will see its maximum liability as $25,000, and then will reduce that amount somewhat, and that will be your offer. You can see how you may get a starting offer of $10,000-$15,000, in a case that you and your attorney thought was “worth” $50,000.

Who are You?

Insurance companies will look at other factors as well. They may do a background check on you, and make generalizations based on whether a jury will like you or relate to you. There may be a lot of (behind the scenes) stereotyping. Are you in a “respected” profession? Do you have kids? How old are you? These are all factors that the insurance company will weigh, to see how sympathetic a jury may be towards you in trial.

Our Rhode Island personal injury lawyers at Robert E. Craven & Associates are here to help you learn what to expect in your personal injury case. Call 401-453-2700 today.

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