Overview of an Insurance Claim

An adjuster is a person whom works for an insurance company that handles or ‘adjusts’ claims.  They are the representative for the insurance company assigned to settle cases.  This, however does not mean that they have unlimited authority to do so.  What follows are many aspects of a bodily injury claim which will give you some idea of a Negligence Claim (an injury case) and how best to deal with an insurance adjuster.

The Demand

Very often we will do what is called a Demand and send it to the adjuster.  Our Demand is a synopsis of the facts, a summary of the treatments, injuries and prognosis of our client.  We attach all key evidence such as the police report, sworn statements from witnesses, medical reports, x-rays, photos of the scene and injuries, plastic surgeon reports and anything else that proves our case just as if we were pleading it to a jury. 

The adjuster will look at our demand and often ask for additional information to verify it.  They may have authority to make an offer or they may bring all the information they have, including our demand, and their file to a round-table meeting with other adjusters and supervisors.  A round table meeting allows the company to pool ideas from different experiences of their employees.  The group may come up with an offer or a range that they believe the case should settle for.  If the case does not resolve in negotiations at this point, a lawsuit would be filed next to proceed.

Timing of a Lawsuit

Sometimes we do not make a demand we, instead, go straight to filing a lawsuit.  I found that if the case is significant, it is very difficult to settle the pre-suit.  The adjuster is often mailed a courtesy copy of the Complaint (lawsuit) however they do not have to legally answer it until it is served appropriately under the Court Rules of the State that the case is filed in.

Any defendant and parties to this lawsuit must be served appropriately.  The people or entities typically sued will usually include the defendant driver and the owner of the vehicle (if different).  This depends on whether or not the state where the crash occurred had an Owner Liability Statute or if there is a factual basis for a Negligence Entrustment Claim. 

Legal Counts of the Lawsuit

The Claim against the at-fault driver is for Negligence.  Negligence basically means that the driver, while on the roadway, did something unreasonable that caused the crash and resulted in injury or damage. 

Owner’s Liability

The portion of the personal injury lawsuit against the defendant owner of the vehicle may involve a specific statute where the owner is automatically liable (see above Owner Liability Statue).   Negligent Entrustment is where the owner of the vehicle, by way of lending or giving the vehicle to the defendant driver to use, was negligent or unreasonable.  The basis would be that the owner knew, or should have known, that the subject driver would be or is in fact negligent.  For example, there are many cases where the owner of the vehicle is someone’s boss.  When a company hires someone, it should know what the person’s driving record is. I’ve sued company’s employees that ended up having very lengthy driving records and suspensions.  

Another example could be that the driver had a number of alcoholic drinks and the owner of the vehicle was aware of this, and therefore should have known that his or her driving ability would be impaired.  In any event, a good plaintiff lawyer will always sue the owner of the vehicle under a Negligence Entrustment Claim if there are facts to support it.

Another count or claim for a lawsuit against the owner of a vehicle when the vehicle is used by a different person can be what’s called Respondent Superior which is Latin for, “Let the master answer.”   Basically this means that an employer is responsible for an employee’s action while they are performing their duties of employment which would include driving while on the job. 

Service of Process: Serving the Lawsuit

The lawsuit which is in the form of a legal document, called a Complaint, is filed with the applicable court and then ‘served on’ each defendant.  Once the lawsuit is served on a defendant, he, she or it, has to ‘answer’ the Complaint.  Typically you can serve a lawsuit by personal service, by acknowledgement of the defendant (this is rare) or by certified mail with restricted delivery.  The Court Rules of the State where the lawsuit is filed will give us guidance as to how long the defendant has to answer the Complaint. 

In my jurisdiction, if service is made in person, the defendant has 21 days to answer the Complaint and if it is by mail then they would have 28 days.  The defendant needs to get the Complaint to their insurance company (assuming they have insurance) and the insurance company will provide a lawyer to answer and defend their insured and the driver, if need be.

It’s important for a person to know that, when he or she purchases insurance, they are buying coverage and signing a contract.  As part of that insurance contract the insurance company promises to provide a competent lawyer that represents them (the insured) and not the insurance company.  This is called the Duty to Defend.  

Once the lawsuit has made its way to a defense attorney or even at the adjuster level, it is common for them to call the plaintiff’s attorney and ask for a professional courtesy of an extension to file an Answer to the Complaint.  Many times, an insured is served and they hold on to it for a few days or a week.  Further, they may call their insurance sales agent (not an adjuster) who will then instruct them on what to do with the complaint.  It may take weeks for the adjuster to get a hold of the Complaint and they do not want to run out of time to answer it.  If this happens, the plaintiff’s attorney can file a Default for Failure to Answer. 

It is my personal opinion that whenever a small request, such as an extension to answer, is made by the other side, it is an opportunity to ingratiate yourself with the adjuster (or defense attorney) whom ultimately holds the checkbook in your case. 

I am very aggressive and zealous in representing my client; however I’ve learned that I am more likely to “get more with honey than with vinegar.”  Also, first impressions are very important and if your first impression with an insurance company, specifically the adjuster or defense attorney, is you saying, “No, you can’t have an extension, I don’t care what’s going on with your personal life, I don’t care that you don’t want to work till 11:00pm tonight to answer the Complaint that’s due tomorrow, etc.”-- you start off with an individual that wants to dig their heels in and get back at you. 

Ultimately I will prove all aspects of my case.  I like to litigate and back them into a corner so they want to settle the case.  I work to get the company to pay the entire insurance policy available or well over the set reserves.  I want them to pay more than the amount that they originally thought the case was valued at.

Defense Attorneys

After the Complaint is served and it makes its way to the adjuster, the adjuster will funnel it their assigned defense attorney who could be an “in-house counsel” or someone from a private firm.  “In-house counsel” means an attorney that is an employee of the insurance company.  This is an attorney that is salaried and works for the insurance company rather than a private firm; they only handle cases for that insurance company.  I have found that there are some very good in-house attorneys. 

One thing to consider is that an in-house attorney is paid a salary.  Many attorneys in the private sector (private firm) are paid by the hour and the number of hours they spend on a case.  Given this payment system, there is a potential where an in-house attorney may wish to do the minimum possible to complete the job or represent their client.  In contrast, an attorney in a private firm that is paid by the hour may have an incentive to do as much work as possible on the file or lawsuit, so that they can bill and make more money.  Overall I have to say that for the most part, I have dealt with ethical, conscientious, and reasonable lawyers in this regard however, as with everything, I have run across attorneys that are lazy as well as attorneys that will do unnecessary work just for a billable hour. 

Adjuster Still Monitors Claim

During the pendency of the litigation it is the adjuster who will stay on this file and oversee the litigation on behalf of the insurance company he or she is employed through.  The adjuster will be provided updates from the defense attorney.  The defense attorney often times must provide periodic or updated work reports.  In the reports there will be pertinent information that is new, especially if it makes the case more valuable to the plaintiff, which increases the risk to the insurance company.  This issue goes back to the subject of a Reserve as described above. 

If something in the case happens to make its value increase, the Reserves then may have to be increased under the law, or the rules and regulations that the insurance company may have to abide by.  One thing that makes the value of the case increase is an additional surgery that the plaintiff has had to undergo.  Fairly often when my client is involved in a motor vehicle accident and initially suffered from a broken bone their injury will require hardware to be inserted.  This could be a rod, and/or screws. Sometimes, later on,  the doctor will remove the hardware because of pain and that surgery can be significant.

Settlement Conference

With most lawsuits that I’m involved in, there comes a time that the judge schedules a Settlement Conference.  Whereby, all attorneys and decision makers on the case (these are people that have authority to accept or reject settlement offers and make them) are ordered to come to court and talk to the judge in the attempt to resolve the case. 

The adjuster would be the person that would have to appear at a Settlement Conference.  It’s not uncommon for negotiations to ensue where figures are requested above the adjuster’s authority.  The adjuster will then call a supervisor to ask for additional authority to settle the case.  Judges know that without a decision maker at a Settlement Conference a deal can not be struck.  This is the same for the plaintiff’s side as well.  I, as the plaintiff’s attorney, am able to bind my clients, however it is the plaintiff that has ultimate authority and must appear in court.  Most Settlement Conference Notices state in writing that the plaintiff, the defendant, and the people with authority, such as the adjuster, must be present.  This is so a deal can be struck and so that the settlement can be placed on the record.

Binding Settlements

It is important to place the settlement “on the record” because once the settlement is placed in record in open court or in a deposition where a court reporter makes a transcript or reduced to a writing, it is binding and cannot be undone (There is usually exception for anything under the law and with a settlement agreement it may possibly be undone by-offer revoked or acceptance nullified- duress or fraud). 

This paper was an attempt to explain the Insurance Claims process of a Personal Injury Matter.  I hope we succeeded to that end.