The operational workflow of an insurance company is well known. The insured individual pays a premium, which offers a predetermined level of coverage in the event of an unexpected occurrence, such as an accident.
Regardless of the charges incurred based on the nature of the accident, the insurance company is only going to cover up to the limit of the premium.
With a model like this, payments are made through the honoring of claims. However, insurance companies in Des Moines may opt to offer a settlement instead when the circumstances call for it.
If a person is negligent and reaches out to the insurance company of choice, that firm may attempt to offer a settlement to the driver and anyone else who is a victim. Though it may appear counterintuitive at first, it's the perfect strategy to prevent an even larger payout later.
While it may be true that insurance providers pay out money as a large part of their business model, they want to be collecting money more than they're paying it out. Therefore, strategies such as these are not uncommon.
If you want a look into how the settlement figure is decided, you may have a look at the information below.
Getting the Facts Straight
While you are advised to report accidents to your insurance provider, nothing is stopping the other party in the accident from doing so. A third-party report is an option, and this sees the victim reporting the matter to the insurance company of the aggressor.
The company is then going to attempt to understand the details from the side of the policyholder. Apart from talking to the insured party directly, the company is also going to attempt to get its hand on any evidence, including any police report that was filed.
Personal Investigation
Insurance companies tend to do their research on third parties. The investigation may find previous insurance claim reports or anything negative that the third party may have done that could be useful.
The whole idea of this step is for the insurance company to try giving itself a way out. If a certain kind of information is found, the provider may have a solid reason to offer a low settlement or none.
Documentation Review
Though insurance companies may seem to blindly wish to save on operational costs, they are often very serious about its compliance. As morally gray as their operational style may seem, they do not wish to deal with the steep fines and other penalties that may be induced otherwise.
So, they are heavily guided by documentation and research. In the case where you have been hurt or have incurred damages because of someone else’s negligence, the other party’s insurance company and auto accident lawyers are going to request valuable information, such as your medical bills, proof of property damage, etc.
No settlement offer is made before all this the required details and documentation are provided.
Valuation and Offer
Assuming the requirement for documentation has been met, the valuation step follows next. Unfortunately for the victim in this scenario, the payment amount is not strictly based on the soundness of the figure requested to be paid by the defendant in court.
The probability of victory also plays a key role. If the insurance company can see that it's on the losing side and its victory for the victim is all but inevitable, you are probably going to see a better settlement. On the flip side, if the victim has a weak case, then the amount may begin to decline.
The offer often starts at a percentage of the estimated value of the case along with how well they can prove pain and suffering. Should this be accepted by the other party, then the insurance company would have prevented itself from the larger payout it was avoiding.
Of course, as time passes and the circumstances change, so does the settlement amount that is on the table.
Rely on Your Attorney
It is very easy for the victim to fall prey to the low settlement technique, which is where an expert attorney comes into the picture. Thanks to tremendous experience and a well-rounded understanding of the Des Moines justice system, sound recommendations are second nature to make.
If you are unsure where you may stand and need a consultation, reach out to Tom Fowler Law to schedule one as soon as possible.