Insurance
Why the first settlement offer is always low
The first offer is not an estimate of what your case is worth. It is a test of what you will accept, and it is generated by software before a human being reads a single page of your file.
How the number is actually built
Most large carriers price bodily injury claims with a claims evaluation platform. The adjuster codes your injuries, your treatment, your gaps in treatment and your jurisdiction into it, and the system produces a range. The adjuster then opens somewhere near the bottom of that range, because the system also tells them what percentage of claimants historically accepted it.
That means the opening number is measuring four things, and none of them is your pain.
- Documentation density. How thoroughly the medical record ties a diagnosis to the mechanism of injury.
- Treatment continuity. Every gap of more than a few weeks reduces the coded value, regardless of why the gap happened.
- Venue. Maricopa County jury history is in the model. So is the fact that most claims never reach a jury.
- Who is representing you. Carriers track which firms file, which firms try cases, and which firms have never taken a verdict.
Why an unrepresented claim opens lower
Not because anyone is being dishonest, but because the model is accurate. An unrepresented claimant has no leverage, no expert reports, no life care plan and no credible threat of a jury, so the risk-adjusted cost of a low offer is close to zero. Represented claims by firms that file open higher for exactly the same reason.
The number moves when the cost of not moving it becomes higher than the cost of paying you. Everything else is conversation.
The four things that genuinely move it
1. A prognosis, not a bill stack
A treating physician willing to state, in writing, that the injury is permanent changes the coded value more than any other single document. This is why settling before you reach maximum medical improvement costs people more than waiting ever does.
2. Future cost, priced by somebody credible
Past medical bills are the smallest part of a serious claim. Lost earning capacity, future care and the surgery that is five years away have to be quantified by an economist and a life care planner, or they are simply omitted.
3. Liability that is closed rather than arguable
Arizona uses pure comparative fault, so every percentage point of fault an insurer can attach to you reduces the payout directly. Reconstruction evidence, black box downloads and scene work close that door, and they have to be done early.
4. A filed lawsuit
Filing changes who is making the decision. It moves the file from a claims adjuster with authority in the tens of thousands to defence counsel and a committee with substantially more, and it starts a discovery process the carrier would prefer to avoid.
What a first offer looked like in one of our files
A Tempe teacher with a diffuse axonal brain injury was offered $95,000, on the basis that the vehicle damage photographs looked minor. Neuropsychological testing and testimony from her head of department established permanent cognitive deficit. The caseresolved at $14.2 million forty days before trial.
What to do with an offer you have already received
Nothing irreversible. An offer stays open in practice far longer than the adjuster implies, and the deadline pressure is a technique rather than a rule. Get the claim valued independently before you sign anything, because a release is permanent and it covers injuries nobody has diagnosed yet.
A review costs nothing and takes about twenty minutes.Send us the offer and we will tell you honestly whether it is already fair, which it occasionally is.
