Part one of this two-part series reviewed 12 steps to creating an accurate outcome for bodily injury claims. In addition to those steps, there are four key issues to be considered as part of the settlement process.  

The negotiation

Of course the most challenging aspect of any claims resolution is the effective negotiation of a fair and accurate settlement. The goal of claims professionals should be to pay exactly what is owed; no more, no less. This can be challenging in the often subjective world of personal injury. To effectively determine what is owed, adjusters need to focus on both causation and severity, since some claims can be viewed by some as an opportunity to achieve greater wealth.  

In the insurance fraud thriller, Swoop & Squat, an aggressive claims investigator utilizes keen insight to differentiate legitimate, opportunistic and outright fraudulent claims. According to the Coalition Against Insurance Fraud, “staged-accident rings fleece auto insurers out of billions of dollars a year by billing for unnecessary treatment of phantom injuries. Usually these are bogus soft-tissue injuries such as sore backs or whiplash, which are difficult to medically dispute.”

“Claims with apparent fraud or buildup were more likely than other claims to involve sprain and strain injuries, and periods of disability. These claimants also were more likely to receive treatment from physical therapists, chiropractors and other alternative medical providers.”

auto injury claim

Photo: Monkey Business Images/Shutterstock

Injury source

The first step is to determine causation of the injury.  This can be challenging since many claims involve injuries to the neck and back. According to the American Chiropractic Association, more than 80% of Americans will suffer back problems throughout the course of their lives. While a person may claim a back injury is from the accident, leveraging expert knowledge from biomechanical engineers to IME doctors can often refute such claims.  

Being proactive in this type of investigation is critical, since having the upper hand in the negotiation is dependent upon early notification to the attorney that there may be causation issues, and to reinforce that the insurer will only pay what is reasonable and related to this accident.  

Consider the common allegation that “my client had back problems that were totally resolved and this accident aggravated the condition.” This is a possible phenomenon and a plausible explanation, which is why getting a detailed claimant medical history is critical. If a person truly did have resolved back issues that were aggravated by the accident, then there may be compensable damages. However, this often is not the case, but will be challenging to prove without a detailed medical history. 

From my own experience, I typically requested a 10- or 20-year medical history at the outset of the claim, and always provided the attorney with a medical authorization the client could choose whether or not to provide. If the claimant did not provide the information, he or she was reminded that all of this information was discoverable.   

injury severity

Photo: Piotr Marcinski/Shutterstock

Injury severity

The next consideration is severity. Is that double laminectomy really related to the $50 bumper ding?  Probably not, yet there may be plaintiff medical providers relating it. There may be $100,000 plus in medical bills that can be blackboarded.

It is important to send a very detailed and firm response to the letter of representation indicating that you will consider anything that is reasonable and related to the loss. When dealing with lower impact claims, being proactive is critical to outcomes. Getting photographs of the lack of damage in front of the attorney with an early offer can at least set the stage that this might not be the claim that the client is representing it to be. Like most professions, attorneys are in business to make money and recognize good versus bad claims.  

Medical bill

Photo: John Kwan/Shutterstock

Medical bill reduction

The next consideration is the reduction of medical bills. This can be a profit center for plaintiffs who can run up significant bills to use as leverage for a bigger settlement based upon multipliers, an outdated and ineffective concept sometimes still used to calculate pain and suffering. But as soon as the claim is settled, the attorney will often call the provider and offer them pennies on the dollar to resolve the lien, further increasing the net settlement dollars.  

Taking this card away is a crucial step in the negotiation process. As part of the demand, attorneys need to be advised that all bills, including HCFA (Health Care Financing Administration) and UB (Uniform Billing) forms, need to be presented. They need to include diagnosis and CPT codes. Even in states where medicals aren’t considered as part of the demand, it is still critical to review the bills as they can point to non-traumatic diagnosis and unrelated, unnecessary or excessive treatment. Leveraging bill review tools can result in significant reductions of bills based upon both benchmark pricing as well as the identification of deceptive billing practices such as upcoding, unbundling or modifier abuse.  

Of course venue is a big consideration. There are “judicial hellholes” across the fruited plain, from Bronx County, New York, to Madison County, Illinois, to much of the state of West Virginia. The reality is that some venues will command more money than others. When utilizing decision support tools such as ClaimIQ, adjusters often find that venue consideration plays a significant role in determining ultimate value.  

This is a very valid consideration, but we should also not lose sight of the fact that most counties do not operate in this manner. More than 85% of counties throughout the United States are considered conservative to moderate when it comes to jury verdicts. Rather than manage to exceptions, processes need to be built to norms. Having specialization in certain venues is part of a common sense claims solution, but carriers need to be careful that the well does not get poisoned with jurisdictional bias.

Case in point, Florida is a state notorious for ridiculous jury verdicts and bad faith “set ups,” but this isn’t the rule, it is the exception. There are 67 counties in Florida, and most are pretty decent venues. Even in Miami, an area often cited as a liberal venue, juries have been shown to be generally fair, especially in questionable soft tissue and low-impact type of claims. Are there exceptions? Yes. Should we ever manage to exceptions? No.

Several years ago an adjuster had asked me for authority to pay policy limits on a soft tissue claim. His rationale was that since it was in Miami, the company had to pay policy limits or risk getting sued for bad faith. There was limited damage to both vehicles despite the excessive treatment. This was not a policy limits case even with the low limits of the insured. I did not grant the authority and instead picked up the phone, called the attorney, e-mailed him photos of both vehicles, reduced the medical bills and settled the claim for $3,000. The adjuster never asked for authority on these types of claims again. 


Photo: Kzenon/Shutterstock

What are others paying?

What is thought to be the norm often is not. It is important to look throughout the industry to see what others are doing. While it may be normal for Carrier A to pay $12,000 in a venue for a certain type of claim, that does not mean that Carrier B isn’t settling the exact same claim for half the value.  

Attorneys are savvy and know who the top performing carriers are in the industry. They know who will litigate claims, and they understand who is and is not reviewing and reducing medical bills. They know which carriers are using effective decision support tools. Even within carriers, they know who the toughest and easiest negotiators are.  

In order to get to the best possible outcomes, calibration of an organization is critical. By focusing on the behaviors of top-performing adjusters, it is possible to replicate these behaviors throughout a claims organization. By utilizing a common sense approach to claims that exploits the insatiable curiosity of adjusters and empowers them to investigate deeply and negotiate effectively, more accurate outcomes can be attained.  

Christopher Tidball is an a casualty claims consultant and the author of multiple books including the fictional claims thriller Swoop & Squat and the claims process improvement manual Re-Adjusted: 20 Essential Rules to Take Your Claims Organization from Ordinary to Extraordinary. He is an industry veteran serving in a variety of adjusting, management, auditing and leadership roles for multiple top 10 P&C carriers. To learn more please visit