Interviewer: Do you employ that strategy when you're dealing with insurance companies? Have you found that giving them information completely and faster than other attorneys might help your client in getting more money over that case?
Guy DiMartino: Yes, it makes it easier. But that's based on having a strong case. It's all based upon the facts of the case. So, the carriers, the big four, State Farm, Allstate, Progressive, Geico and then if you want, through Nationwide in there, if they are small damage cases or small injury cases or small property damage cases, it's like pulling teeth. The insurance companies have made a business decision to take a real hard line on these cases. So up front, the client needs to understand that they can't exaggerate, that they have follow their doctor's advice and they really have to be a good actor (not a movie actor). If a client is a good actor in those types of cases, then you can get a good result. If a client is not a good actor, a lot of lawyers aren't taking those types of cases anymore. What I mean is that these cases depend on the credibility of the client, if the client has a lot of baggage, the case will not be worth it.
A Description of the Term Loss Reserves as Used by Insurance Carriers
Interviewer: What does loss reserves mean? What is the perspective of the insurance adjuster? What do they need to do and want to do?
Guy DiMartino: An insurance carrier sells an insurance policy. An insurance policy has policy limits. So, for instance, if you buy an automobile insurance policy and you're buying bodily injury insurance in the amount of $100,000, what that is saying is that I'm purchasing a $100,000, so if I cause an accident and I'm at fault, I will have a $100,000 to protect me should I injure somebody. Now, the insurance company's job is to settle the case within the policy limits, to protect their insured. Insurance companies do not want their insured to have the risk of a verdict that is more than the insurance policy limits. So, when an insurance adjuster gets a file, they open up the file and analyze the facts of the case to determine whether their insured or their driver was at fault for the accident. Then, they take a look at the injuries to see the value of the case.
They Have to Set These Limits or Loss Reserves Within the Policy Because that's How Insurance Companies Work
They have to set these limits or loss reserves within the policy because that's how insurance companies work. In many insurance claims, the company carries these numbers on their books for a year, two years, five years down the road. So, if I open a claim today, and we're talking in 2014, and I had a $25,000 loss reserve, that's carried on the books until the case is closed out which might be in 2016. But if at some point in time I have to go to a supervisor and I have to say, “I need the whole $100,000”, it impacts the company's bottom line because they've already carried that other $75,000 the difference between the 100 and 25 all those years. An insurance adjuster has to go through a complicated process to get loss reserves increased once they are set. The process usually requires one or more supervisors to review the file and request the increase from their bosses. Insurance adjusters are people, like you and I, and they do not want their bosses looking at their work critically.
It's Important to Know the Workings of an Insurance Company in Order to Settle a Claim Amicably
A lot of times, insurance companies require cases to go before a claims committee to get loss reserves increased. Depending on the company, the process can take a long period of time, which can impact the injured person who is strapped for money because of medical bills, etc. When an insurance adjuster as to get more settlement authority, somebody is second-guessing the adjuster saying, “Well, here, why did you do this?” But if they're able to set the loss reserve higher like closer to the $100,000 and then they settle the case for 30 grand, they look good. They saved the company $70,000. That's why it's important to understand the workings of an insurance company; you have to know what triggers to push with the insurance adjuster because they're people also.
Some Insurance Companies Only Respond to a Lawsuit when Handling Claims
Interviewer: Any other tactics that you have dealing with insurance companies that helps your clients?
Guy DiMartino: There are some insurance companies based on the facts of the case, especially in Indiana where it's not even worth getting into a discussion with them. It's the case that you're going to take on; you just have to file a lawsuit.