Economic Factors Affecting Insurance and Injury Settlements

The economic recession has resulted in lasting effects to the insurance industry and the way that personal injury claims are negotiated. An Irvine personal injury attorney may be able to help you understand what you can do.

The economic slowdown resulted in large cuts to every aspect of state budgets, including the judiciary. In many states, the judicial branch has had substantial staff cuts, let retired judge’s seats go unfilled, and closed courthouses and shortened working hours. The cases most likely to be affected by these cuts are small to medium personal injury cases. Judges do not want attorneys to bring a $20-$30 thousand case to trial when it will cost the state more than that to handle it. They would prefer to spend the limited judicial resources they have on high-profile criminal cases and product liability cases. It will take a long time to get a trial date for a $40,000 to $50,000 personal injury case. In addition, court costs, filing fees, and mediation costs have all increased dramatically.

In bad times, clients are both more eager to settle and more hopeful for high settlements. Some clients hope that their financial problems can be solved by a large settlement, and they will refuse to accept a reasonable settlement offer out of hope for a larger one that will take care of all their debt. Others are so desperate for a quick fix that they will settle quickly for a lower offer.

There is also the fact that health insurers may become more difficult to work with. Insurers who pay medical bills are typically entitled to reimbursement out of settlement funds, but they often accept less than full reimbursement. In bad times, however, some carriers such as state Medicaid and federal Medicare, are more likely to request full reimbursement for claims paid out, and will be unlikely to agree to reduce their liens in non-catastrophic cases. This especially applies to Medicaid, but in general, if your attorney tries to negotiate a lien reduction, expect a negative answer.

If you have further questions about how to handle your personal injury case, contact an Irvine personal injury attorney.