Dirty Little Secrets of Personal Injury Claims: What Insurance Companies Don't Want You to Know; and What Attorneys Won't Tell You, About Handling Your Own Claim

LETTER

PREFACE

The following guide is designed as an aid to those seeking to handle their own personal injury accident claims, at least in the initial phases. It is not meant, or designed, to be a replacement for, or used instead of, the advice of competent legal counsel. However, thousands of people handle their own personal injury matters every year from start to finish and achieve very satisfactory results. For those who have decided to handle matters on their own, this guide can be a valuable reference tool.

If matters become too complex, or if litigation is imminent, it is recommended that one seek the advice of counsel. Most personal injury practitioners give free initial consultations. With this said, even if counsel later becomes necessary, this guide will be of use in understanding the overall process better; building your personal injury case better during the initial phases and even in selecting the right attorney for you, if that becomes necessary. Good luck in your endeavors.

INTRODUCTION

This guide will cover a number of accident injury scenarios and the handling of cases arising from said accidents; from the initial injury, through medical treatment and up to and including negotiating and ultimately settling your case. There are a wide variety of factors that can and do influence personal injury cases. Many factors can be controlled, while a few cannot. This informational guide is designed to help one negotiate the maze of questions and issues surrounding an accident injury case and how to best manage and control factors to achieve the best outcome. Much of the handling of a personal injury case is the managing of variables; and many times it is not so much what IS done, as what IS NOT done. We may call this avoiding stepping on land mines, or things that can cause great damage to your potential recovery.

Accident injuries arise from a great variety of sources and causes. There is no set type of accident case. They arise from any number of factual settings and negligence issues. To comprise a compensable injury, there must be a legal duty, a breach of that duty and injuries that result therefrom. This can mean anything from automobile accidents, to slip and fall accidents, to product liability cases and even workman’s compensation cases, etc. Sometimes attorneys may even present novel cases where there has been no previous claim or action brought before. Nothing prevents this, or you from making a similar type claim. This is how new areas of the law begin to evolve. You certainly are free to do the same if your case meets the same basic criteria above. However, the vast majority of accident cases are from well established areas of the law pursued many times before. Regardless of the circumstances surrounding your accident or incident, what is done initially (as well as what is NOT done), in the first few weeks following the accident, is very important. It is always best to take a proactive approach and lay the initial groundwork and foundation for your case from day one.

Many injured persons decide early on that they do not wish to retain an attorney; at least initially. This can be for a variety of reasons – personal, financial, prior experience, etc. This decision makes sense to people for a number of reasons, especially if the injured party does so with an open and informed mind. Many people feel that they can do as good a job as an overworked or busy attorney, especially when it comes to knowing the intricacies of their own medical condition and injuries. Many people have experience negotiating or have dealt with insurance companies before. Further, others do not relish the thought of giving away 33% - 40% of their overall settlement; and feel that IF they need to retain an attorney they can do so later. There are many rational reasons why a person may wish to pursue their own personal injury case and settlement, without the aid of counsel.

Regardless of the rationale, one important consideration before ever proceeding is to KNOW, AND NOT EXCEED, THE STATUTE OF LIMITATIONS. The importance of this cannot be overstated. The Statute of Limitations is a statutorily set time period regarding cases, and after this time period elapses there is NO going after the case, no recovery and no possible court action. Once this period elapses, the case is BARRED FOREVER!. Generally, states have two year statutes of limitations, but sometimes they are shorter (say, a year). For federal actions there is a different statute of limitation, sometimes shorter, and there are sometimes other requirements (like filing a Federal Tort Claim Form with the respective federal agency you may ultimately need to sue. This must be done before you are allowed to sue; and must be done within a certain period of time). Whatever the time period is, it is important to know and observe this time limitation, and never run beyond it. It is simple to research, ask or find out what the statute of limitation is regarding your respective state, if it is a state action; or federally if it involves a federal issue or law.

Therefore, keeping in mind of the Statute of Limitations, many people will map out their cases accordingly. For instance, let us assume the action is a state action and the particular state involved has a two year statute of limitations. A case might be roughly mapped out accordingly: allow up to 6 - 18 months for the treatment of injuries (obviously there are huge variables here depending on the type, nature and severity of the accident and injuries); allow up to three months for the gathering of medical data and bills, wage loss information, etc., and presenting the claim to an insurance company for review and evaluation, and allow up to the final 3 months to search for and obtain an attorney and to file suit, IF the claim fails to settle up to that point.

Clearly, these are simply rough guidelines as to what time periods could be needed. However, going into the matter initially, it helps to have a rough conceptual idea as to what your needs and time requirements are likely to be, and what periods of time should be allowed. IF an attorney is later needed for whatever reason, it is best not to run right up to the wire, the Statute of Limitations (S.O.L.) date, before seeking counsel; for obvious reasons.

People may question how they can determine the statute of limitation period. There are several ways: one could research at the local law library, or the internet or on a legal website; one could call attorneys or ask the State Bar Association or they could call the county clerk and/or a local judge. Some have even asked the insurance company they are dealing with to commit, in writing, to the time period. (Although not the ideal way to find the S.O.L. date, if this way were utilized it would be wise to do so in writing and have the insurance company write you back. If there were ever any question later, if misled one could argue that they detrimentally relied upon the insurance company’s advice, and if this were false it could be used later to attempt to set aside the statute of limitations defense by them).

However, it is obviously far better and safer to simply be correct initially and properly abide by the statute of limitations in the first place. The letter from an insurance company would merely be used as a back up. All this talk of the S.O.L. is not meant to make the issue seem daunting, for it is not. It is quite simple to find out this basic fact. But, the subject has been discussed in some detail for the simple fact that there is probably no better or more devastating defense an insurance company can raise concerning your claim. It is absolute; therefore it must be avoided.

Continuing with the previous point, you want virtually everything in writing (if you can) concerning your accident injury. Many times memories fade, or insurance companies only remember what is convenient to their position. Many times people are promised things or made actual or implied inducements, and none of these seem to be recollected later. Such statements as, You can always re-open your case later, or We will make you a fair settlement based on X, etc. Essentially, the legal maxim applies here; that if it isn’t in writing, it didn’t really happen. Unfortunately, that is about the size of it. Trying to later argue, He said, she said, to the judge, does not carry much weight. Get everything you can in writing!

This concept is vital for any potential court action you may have to file later, but really, just as importantly insurance companies live and breathe paperwork. They need and use paperwork in every facet of their claims handling, and the more documentation you have regarding EVERYTHING (physical injury, property damage, medical documentation, wage loss, etc.) the better off you will be, and the better a chance you will have to successfully settle your claim with them. At a minimum, this at least shows them that you are professional and prepared, and ready to proceed forward into a legal action if necessary.

Paperwork is everything to insurance companies, they thrive on paperwork. Claims will never be settled without paperwork and documentation. Therefore, from the point of the accident forward, seek to obtain or produce written documentation of everything. Sometimes, something seemingly trivial, can end up being quite important. Do not throw away anything, especially any papers or paperwork documenting any facet of your claim. Save everything. Even if your claim does not ultimately settle (and sometimes they do not) and you need to proceed to litigation, it will likewise require full and complete documentation of everything. Your efforts here will not be wasted.

The rest of this guide will go into the proper building of your personal injury case. If you follow along carefully, you will be guided to well-used principles that will aid you in completing your case and tendering a written demand to the insurance company. This will be in a format they are used to seeing and responding to. At that point you are free to negotiate terms that are acceptable to you, or if necessary to move the matter forward into litigation. This guide is NOT meant as a substitute for legal advice; nor is it advising you not to seek counsel. It is merely a guide, written to apprise injured parties of their options so that they may proceed somewhat more informed than would otherwise be the case, once they have chosen to proceed alone without counsel. This is a course MANY take, and do so completely successfully.

There is nothing magical or overly difficult about handling your own claim. Much of what is done in the initial phases of a claim, are simple insurance claims handling procedures. True legal issues and attorney work generally come in the later phases of claims handling, namely if and when the matter does not settle and must be pushed into litigation. This guide should help you to understand and use some of these claims handling procedures, and also later if you decide to retain counsel, things will have been done in a proper way, documenting everything accordingly. Whichever way you proceed, you should be successful.

TYPES OF PERSONAL INJURY CLAIMS

There are numerous claims that can be brought from accident injuries. The potential claims and causes of action are almost too numerous to count. Cases can arise from slip and falls, dog bites, auto accidents, medical/legal/dental malpractice, products liability, and the list goes on. Virtually all arise from some duty under the law, a general breach of that duty and damages resulting from this breach. Many actions, although not all, are pursued when there is first some kind of liability insurance available to go after. This makes it easier and more convenient for the plaintiff. (Even though one can still pursue, for example, an un-insured motorist or homeowner, the likelihood of collecting diminishes for a variety of reasons. Thus, most injured parties pursue an insurance policy.)

For the purposes of this guide, there is not much operationally different between, a slip and fall or an auto accident, and an injury in a person’s home. All are potentially compensable personal injury cases, and all will need appropriate medical care and demands to be written at the conclusion of treatment. So in many respects, they are for our purposes functionally the same and approached virtually the same. Therefore, we will treat these accident cases in much the same way, as well as approach the building of personal injury cases related to them similarly. The term building a personal injury case is used and it is an appropriate one. Much of the success, or subsequent failure, of a personal injury claim and any subsequent lawsuit; is directly attributable to the care, effort and energy invested in the early and middle stages of a case and the medical treatment.

It is much like building a house; one cannot come to put the roof on and hope to make up for a poor or inadequate foundation or improper framing. Each stage and step must be performed carefully to achieve a proper result at the end. All compensable claims will have some definable legal duty, and this must be breached in some way by the defendant (the at fault party). Again, often times this breach or failure under the law is clear, but can also be simply arguable. Finally, there MUST be damages! This is the final step in the analysis (and in a sense the trump card - for it often times can make up for other ills or deficiencies in a case), but damages are MANDATORY!

For example: the worst roll-over, total loss automobile accident that you could imagine, (that nevertheless did not damage a hair on the head of the plaintiff) is not worth much. To recover, you must be hurt and you must sustain damages. Conversely, a relatively low-speed minor accident that somehow rendered someone a quadriplegic, is quite likely worth a great deal. You cannot get around damages, they are vital to every case. Damages include: past medicals, future medicals, economic damage, future wage losses, etc. Often substantial damages can make an otherwise marginal case (in terms of liability, etc.) attractive to an attorney, if one is later required. Likewise, the lack of damages in an otherwise excellent case, may tend to make an attorney pass on the case. You cannot get around damages, or their importance to your action. They are a vital, overriding factor in every case. Remember this principle: damages are king.

After establishing that there is in all likelihood a personal injury case (car accident, slip and fall, medical or dental malpractice, etc.) it is best to determine which, if any, liability policies might apply. Also recognize, that often two or more insurance policies might be applicable to the same accident, incident or set of circumstances. A defendant does not always have to do something (an affirmative act); but may also be guilty of a failure to act (an omission). Often, the failure to act when something should have been done in all diligence and prudence, may likewise impose liability upon a defendant. Often times, a gut reaction that something is not or was not right, and SHOULD have been done, is often legally correct and can comprise a valid cause of action. Therefore duties (and the breach thereof) can arise from both actions or the failure to act.

Likewise, not every action has to be a previously recognized cause of action. Some issues are the first of their kind. That does not make them any less valid. As long as there is some legally recognizable or arguable duty and a breach of that duty (especially something that would factually resonate with a jury), there is potentially a claim. Also remember at this stage we are dealing with an INSURANCE COMPANY. This is not yet litigation. Insurance companies are in the business of assessing risk and liability. Whether or not the claim involves a settled area of the law is not necessarily the proper analysis. If there is exposure or potential exposure, they may act accordingly and settle. Additionally, they consider the costs of defense, exposure of their insureds to litigation and even the negative press the claim or a lawsuit might generate. These are some of the factors an insurance company considers when evaluating claims for possible settlement.

When we are dealing with an insurance company, often there are other factors or considerations brought to bear on the matter. Whether this claim involves a settled area of law is one factor, but insurance companies also consider such things as the negative publicity/impact to their respective insured or his reputation; the setting of precedents; excessive costs defense; as well as several other factors. All of these things can and do influence them and their decision making. This can and should be used by you if at all possible. Obviously, your main goal is to simply resolve the matter for an adequate sum of money and avoid litigation if you can. This is their stated goal as well. If you can reach mutually satisfying terms, then you have a settlement, regardless of the underlying facts or causes of the case.

Therefore, identifying and utilizing ANY possible pieces of data or weak points in your opponents hand is what you can and should do. Whatever facts or factors you can bring to bear to resolve this matter in your favor should be utilized. The courts strongly favor and encourage pre-trial settlements. Rational or not, if matters concern an insurance company enough, they WILL settle a matter. It is their prerogative and THEIR money to do with as they will. Even if a matter is considered uncertain or legally questionable, if they wish to avoid undue exposure and litigation as well as a possible large verdict, they will resolve the matter.

Your stated goal should always be to effect certain settlement if you can (if it involves an acceptable sum of money to you). There are many uncertainties with proceeding to litigation, and juries can make irrational decisions. Awards can be too low, or you could receive a defense verdict altogether; at which point there is the possibility that attorney fees could be assessed against you. A settlement is ALWAYS a certainty and money in the bank. The insurance company writes you a check and there is no trial and that is the end of the matter. This certainty is also a main feature and selling point to an insurance company as well. Instead of uncertainty and a possible large verdict, legal fees, costs and interest; the matter is concluded with certainty. Thus, it is not always important to argue simply accident data or legal facts to an insurance company, but anything that could sway them or persuade them to resolve the claim in your favor.

It is an important tactical point to note that insurance companies have a duty to defend their insureds; not to expose them to needless or frivolous litigation, and to settle within policy limits if they can. Further, they must pay verdicts if they are rendered in litigation (and even to cover excess verdicts, verdicts beyond their policy limits if the litigation was caused by them or they failed to settle a matter for policy limits when they could have). These are IMPORTANT points. First, that it is INSURANCE companies who actually call the shots - - whether and when to settle and IF the matter proceeds to litigation at all. The other side of the coin is when they guess wrong and a matter exceeds policy limits, they are usually stuck with this. Likewise, IF they make certain wrong decisions, those can used against them. The insured simply goes along for the ride, and is told what to do by virtue of his contractual, duty to cooperate with the defense.

Specifically, if they decide NOT to settle (for whatever reason) and then a verdict is rendered for an amount TWICE their policy limits, AND attorney fees, AND pre-judgment interest, [including sometimes exposure of their insured(s) to another cause of action, like punitive damages] they would very likely be on the hook for all of this. The reason is that while an insurance company who insures the defendant (the third party) against the claim of the injured party (plaintiff, or the first party); they owe no particular duty to this plaintiff [only the duty to insure, indemnify and defend their own insured]. They DO, however, owe a heightened and special duty to their OWN insured under the law.

This distinction may not seem important at first, but it is and it is somewhat subtle. However, it can and should be used by you at times to gain leverage over an insurance company. Thus, in a third party action or lawsuit brought by a third party against the insurance company’s insured, the insurance company can deny a claim outright and demand litigation. One may indeed have to resort to the cost and expense of litigation to have the matter resolved. This does happen at times and there is no particular recourse for the third party. Luckily, many insurance companies have enough sense to figure out that adding the expense of litigation to an already bad situation does not do anything to make it better, only costlier. HOWEVER, with regard to a FIRST party (the insurance company’s own insured) things are different. So much so, that they are even governed by different areas of the law.

Usually a third party claim is governed under general tort law of accidents and liability, and generally have short two year (or sometimes even one year) statutes of limitations. Whereas, FIRST party claims are considered contract claims and governed under that area of the law (generally with longer statutes of limitations, say 4 to 6 years). But, the distinction does not end there. There is generally considered both an express and implied duty under the law to the first party insured. There is an express legal duty under the laws and insurance codes to protect, defend and indemnify first party insureds, just as there is an implied duty under the law (and U.C.C., etc.) to deal with insureds in a prompt, fair and equitable fashion, and to make them fair offers. Further, the breach of this duty is called the breach of the covenant of good faith and fair dealing (or the shorthand term coined, bad faith).

This information can be of use to you in that the violation of either or both (express or implied) duties, may expose the insurance company to a separate action [in addition to the breach of contract claim by their own insured], but also for bad faith (or the breach of the covenant of good faith and fair dealing). Therefore, an insurance company who takes actions which may expose their own insureds to actions and excess verdicts (or amounts owed in excess of the stated policy limits), as well as costs, fees and/or punitive damages; and then does not fully cover these, or leaves judgments or punitive damages awards unpaid (almost NO policy covers for punitive damages), partially paid or completely outstanding; may be sued by that first party.

As such, if YOU were the first party to an action, you might be able to pursue actions such as these. If you were third party to an action where an insurance company unnecessarily or unreasonably exposed their own insured, this would be actionable only by that insured. If you happened to be the third party in such an action, often times a first party to the insurance company is stuck with a judgment and does not know what to do. In such a situation, you could propose an equitable arrangement, a swap, so to speak, that could possibly satisfy all involved.

What happens is, that the third party to the contract (you, the plaintiff who ultimately received the verdict against the defendant/first party), instead of trying to execute your judgment against the defendant [who may have no real assets; or at least not enough to satisfy the judgment] and forcing him or her into bankruptcy, agree to a compromise. YOU