Top 5 Reasons – Low-Ball Offers - Kerr Law Firm

Top 5 Reasons – Low-Ball Offers


As personal injury attorneys in Orange County, we regularly see insurance companies giving low-ball offers on personal injury claims. We have made it our job to know why so we can circumvent these decisions and get the most for our clients. Here are just five reasons why your insurance company may not offer you the claim you expect, based on court precedent.

1. No “Bad-Faith” Claims

In 1979, the California Supreme Court ruled that an accident victim could bring a punitive damages claim against another person’s liability insurer if the victim felt the insurer had engaged in unfair claims settlement practices. This decision, in Royal Globe Insurance Company v. Superior Court, was reversed in 1988 in Moradi-Shalal vs. Fireman’s Fund Ins. Companies. This ruling made it acceptable for insurance companies to offer unfair, low-ball offers to injured victims. The results were devastating for personal injury attorneys and victims. By 1997, closed claims were an average of 35 percent lower than what was expected, according to a study by RAND’s Institute for Civil Justice.

2. Colossus

More than half of all insurance companies rely on Colossus and similar computerized systems (rather than a human adjuster) to evaluate personal injury cases, resulting in an estimated 15 to 30 percent savings for insurance companies on claims. Personal injury attorneys know that a computer cannot adequately gauge a victim’s losses and injuries, causing already low offers to sink further. Reports show that many insurance companies have rigged the system to further reduce claims, with insurance adjusters who have little to no medical training making judgement calls that oppose the treating doctor’s diagnoses.

3. MIST Cases

In Minor Injury Soft Tissue (MIST) cases, if you’re not sufficiently injured in an accident, you’re going to have a difficult time collecting from your insurance company. In an 18-month investigation, CNN found that major insurance companies—with Allstate and State Farm leading the way—have adopted a take-it-or-leave-it approach to awarding claims. The news organization reviewed more than 6,000 company documents and court records and spoke with a dozen people across the country, including former insurance insiders and accident victims. Essentially, the insurance company provides a low-ball offer and if you don’t accept and opt to go to court, you’re dragged through the wringer.

4. McDonald Coffee case & Tort Reform

In 1992, a 79-year-old woman spilled an entire cup of McDonald’s coffee in her lap, suffering third-degree burns and astronomical medical bills. McDonald’s offered her an $800 settlement, despite the fact that the company received 700 prior burn reports. The media and public judged the woman as the poster child for tort reform, blaming citizens for suing big business in an effort to make a quick buck. Hot Coffee, a documentary released by Docudrama Films, tells an entirely different story of this and several other high-profile cases that were deemed frivolous because big business spun the media that direction.

5. Howell v. Hamilton Meats

In this 2009 case, the California Supreme Court ruled that jurors could only learn of victims’ discounted medical bills paid by health insurers, rather than the full extent of those bills. And while insurance companies have seen a nearly $3 billion savings as a result of this ruling, chances are that you haven’t seen a reduction in your premiums.

As personal injury attorneys in Orange County, we have your back. At Kerr & Sheldon, we aggressively pursue awards and full compensation for your injuries. We take all car accident injury cases on a contingency basis and do not charge any fees until you recover your award. We also advance all costs and expenses, so you truly pay nothing until your case is resolved.

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