Full disclosure, I’m a Plaintiff’s lawyer, but I’m legitimately curious why insurance companies would rather spend six figures defending a case than tender $20-$30k policy limits for medium to high-speed rear-end collisions involving multiple injured parties.
I can understand why an insurance company might balk at tendering higher policy limits, but this just seems like a bad business decision to me, when the policy limits are so low.
Any insights from adjusters or others in the business?
Why don’t adjusters tender minimal auto policy limits in clear liability cases with multiple claimants?
byu/ecfritz inInsurance
Posted by ecfritz
6 Comments
In Florida they almost always tender the limits in the types of cases you mentioned. But after the tort reform bill that Governor DeSantis signed last year, he has severely restricted the bad faith law that scared insurance companies into tendering policy limits. It remains to be seen how they will respond to demand letters going forward.
Not all the time, but in a lot of cases I agree with you and it feels like a tremendous waste of both time and money to not tender the minimal limits available. However, we all answer to somebody and if I’m not tendering my minimal limits it’s because the people I answer to said no. Just following my marching orders.
In my experience this depends highly on company, adjuster, and management.
Sometimes adjusters will get emotionally involved and “stuck” on a certain fact they feel supports their position, this makes them lose objectivity and holistic view. Same happened to plaintiffs attorneys.
Another reason is deterrence. If an insurance company always pays limits on 50k or less it will encourage more settlements on less and less treatment.
Finally, sometimes the attorney sends in 20,000 in meds on 25k and thinks it’s obvious, problem is this goes through billing review and gets reduced to $4k, adjuster is starting at 4k not 20 like attorney.
From a defense perspective, why would you want to set a precedent of just rolling over and paying without support?
Are you asking why adjusters don’t do first come first served or are you saying adjusters are delaying global settlements with minimal policies and multiple claimants?
If it’s the former – I hope it’s obvious why that would be a terrible mistake and create excess exposure for their insured and bad faith for the insurance company.
If it’s the latter – that’s an adjuster issue. If I have a 25/50 policy and two or more claimants, I am usually begging for even a sliver of info that would justify me tendering the policy then and there. We all know the limits are being paid, I’m not chasing meds and demands for months for no reason. I can have a 100/300 in front of me and I’ll still be aggressive with it until I know if it’s an obvious global or not. We all have better things to do and globals are easy.
“Multiple injured parties.” How injured? If they’re severely injured, then the insurance company would max the limits and move on.