Dealing Direct with Insurers After An Accident … the Pitfalls

A number of insurers have started dealing directly with people and making offers to settle their injury claim.  However, victims of accidents should exercise caution.

The insurance company has an interest in settling the claim as quickly as possible for the lowest amount possible.  As the injured person you have an interest in receiving the appropriate amount for your injury and you want the right answer.

Any damages you receive should compensate you for your injury and any losses you may have suffered.  However, it should also provide you with sufficient funds to pay for future care if required.  The insurer and the injured person have a conflict of interest as they both want different outcomes.  This means that the insurers will not give you, as the injured person, impartial advice as to what your injury is worth.  It has to be remembered that these are the same insurers who repeatedly and publicly say that they are happy to pay genuine claims.

Insurers do not see this conflict of interest as a problem when making approaches to an injured person as they see it simply as an opportunity to save money.

Lawyers on the other hand are not allowed to take on a case if there is a conflict of interest and they must be able to provide impartial advice to the injured person about their claim.  A lawyer will advise you as to whether or not an offer of compensation is sufficient or whether it should be higher and you should ask for more compensation from the insurer.

In a recent case a lawyer explained that a client of his had been offered £30,000 direct from the insurers.  This was a large amount of money for this injured person and he seriously thought about settling.  However, he decided to ask a lawyer for advice and the claim eventually settled for £1.3m at court.  In that case the client was not aware of the value of the injury and could not predict the cost of future care. Without a lawyer the under settlement of that claim would have been immense.

At MKB we have also had cases where insurers have contacted our clients direct with an offer of settlement and after taking our advice we have secured a larger settlement than the original offer made by the insurers.  Whilst not to the same degree as the example shown above, an increase of 25% on the insurers’ original offer made direct to the injured person is not unusual.

The same applies with regard to other types of claims to insurers.  You may have had to make a claim, for example, for a stolen car and the payment from the insurers who deal direct with you would be less than the vehicle was in fact worth.

Injured people are not experts on personal injury cases and would not know without the advice of lawyers whether a settlement made by insurers is appropriate.  Injured people may be earning less than the average wage, or unable to earn money for a period of time because of their injury, and settlement offers may be tempting.

Where insurers make direct offers to injured people the playing field is not fair, in that a large organisation is dealing with an individual.  In order to make sure that this process is fair and not driven solely by the desire of the insurers to make a profit, injured people need independent advice and expertise from a lawyer to obtain a fair settlement of their claim.

If approached direct by an insurer to deal with your case treat these approaches with caution.  In most cases when using a lawyer in personal injury claims the legal costs will be paid in addition to the compensation.  Using a lawyer will ensure that you obtain impartial advice and reasonable compensation in your case.

David R Wilson – Personal Injury Dept
MKB Solicitors LLP