We see this happening much more frequently following accidents involving personal injury.
People, who are at their most vulnerable following injury, receive a call from the other party’s insurance company and then a letter offering settlement of their claim at a derisory level.
Why? Well, settling the claim quickly is invariably cheaper for an insurer and they know that, without specialist advice, you may not be paid all that you are entitled to receive.
If you have suffered a personal injury, it is generally only possible to value the injury part of the claim properly by obtaining medical evidence.
The amount your injury is worth depends on things like:
- the nature and severity of the initial injury; and
- the length of time it takes you to recover from the injury.
Getting medical evidence, including a report from an appropriate medical expert, should ensure that the compensation paid out at the end of the day is fair compensation. And that means “fair” not only to you but also to the insurers.
After all, the point of compensation is not to give a windfall to anyone.
The point is to try and put you, the injured person, back in the position you would have been in if the accident had not happened – as far as money can achieve that.
Against that background, at first sight, the increasing tendency of some insurance companies to offer immediate “pre-medical” settlements is hard to understand. In other words, the insurers offer you compensation for your injuries without seeing any medical evidence to prove even the fact of your injury, let alone its nature or severity.
This approach seems likely to result in a windfall to someone and, of course, on reflection, that is more likely to be the insurer than you.
It can be very tempting to accept an early offer to settle your claim.
We have had several experiences of clients accepting “pre-medical” offers in spite of our advice that their best course would be to wait a bit longer.
In most cases, we are not saying that the offer is a good one or a bad one because, if you are still in the process of recovering from your injuries and, especially, if the accident was only a matter of weeks ago, it is simply not possible to give an accurate assessment of the likely value of the claim.
Insurance companies are skilled in pitching the level of these offers.
You can be sure that they would not be making them if, on average, it did not save them money overall.
Insurance companies are keen to push the idea of there being a Compensation Culture. We don’t accept that argument – and all the hard evidence is against it – but the “pre-medical” offers approach of some insurers could be seen as risky with regard to Compensation Culture issues and bad news for the insurance industry.
Proving the nature and extent of some injuries (e.g. whiplash or back pain) is more difficult than for others (e.g. broken bones).
Injuries where there is more of an element of the doctor (or the insurer) having to “take your word for it” are much more vulnerable to fraudulent claims.
How much more of a possible problem does that become if word gets out that insurers are willing to pay out compensation for injuries that you don’t need to prove by any medical evidence at all?
We hope you have found this article to be a convincing explanation of why we consider that early settlement of personal injury claims is probably bad news for everyone:
- It’s bad for you, the injured person because you risk under-settling the value of your claim;
- It’s bad for the insurers because, if word gets around that they will settle claims quickly and on provision of no medical evidence, it’s likely to increase fraudulent claims and create a Compensation Culture where none currently exists; and
- Its bad news for everyone else because it could result in a higher overall number of claims being made and an increase in insurance premiums.
How we can help
If you have any questions about this article, please do get in touch with us. The same applies if you want to enquire about our personal injury claims services at Moray Claims / Grigor & Young. All enquiries are free of charge and without obligation.