This is one of the most common questions we’re asked as injury lawyers.  Understandably, our clients would like to know a fair settlement amount.  Unfortunately, the answer isn’t simple.  First of all, the word “fair” is subjective.  After doing this for over ten years, we’ve found that all our clients have a different definition of “fair”.  Some clients think that small settlement offers are fair, while others believe that much larger offers are unfair.  After all, how does one put a price on their pain?  As injury lawyers, what we think is fair may not be considered fair by our clients.

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In our professional opinion, asking what amount is fair is the wrong question.  It’s not a helpful question because the answer doesn’t help one decide whether to settle a case.  The useful question is this:  Considering the settlement offer that the insurance adjuster has made, should I accept their offer or take them to court?  That’s the real question that needs to be answered.  Ultimately, it doesn’t matter whether your lawyer thinks a settlement offer is fair.  He does not get to decide whether to accept the offer.  The client can choose whether to take a settlement offer or go to court.

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When deciding whether to take the case to court or not, this is where you want to get as much advice from your injury lawyer as possible.  He’s the one who has been to court many times.  He’s the one who has an idea of how things may go with a jury.  Your lawyer can explain the risks and benefits of going to trial.  There are many risks to going on trial.  There are trial expenses, such as the $315 complaint filing fee, deposition expenses, records expenses, etc.  There’s also the stress of going to trial.  It takes a couple of years to go to trial.  The defense attorney will want to take your deposition, which will take 2-8 hours.  This can be very stressful.  The arbitration and trial themselves can be time-consuming and stressful.

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One of the most significant risks of the trial is not knowing what a jury will decide.  Juries can be very unpredictable.  In general, most jurors haven’t been injured in car accidents, so they will probably not be very sympathetic.  Most jurors pay for car insurance and naturally think their rates are high because of injury cases.  So, taking an injury case in front of a jury can be very risky.

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A risk of going to trial is that you could lose.  Again, this comes down to the unpredictable jury.  If you lose, the judge may order you to pay for the defense attorney’s fees and costs.  This can be very expensive.

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When deciding whether to accept a settlement offer, you need to consider whether you think a jury will award you much more than what the adjuster is offering you.  You don’t want to go through the time and expense of a trial if you think the jury will award you the same or a little more than what the adjuster is offering.  If you think that the adjuster is being somewhat reasonable, then it doesn’t make sense to go to trial just to try for a little more.

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Our clients who have the easiest decisions to make are when the insurance adjuster offers a ridiculously low amount.  This is the only time when it’s somewhat easy to decide to go to court.  Otherwise, if the car insurance company is offering you an amount that is anywhere near reasonable, then you should think long and hard about accepting it before you decide to trust your case in the hands of a jury.

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One of the complicated parts of an injury case in Hawaii is medical liens. Most of us have health insurance, and we think that our health insurance company pays the bills they receive and will never ask to be reimbursed for bills that they’ve paid. This assumption is usually true; however, one exception is when you’ve been involved in an auto accident in Hawaii. The medical insurance companies in Hawaii, such as HMSA, Kaiser, and HMAA, have clauses in their insurance contracts that state that if you’ve been injured in an accident and you receive compensation for those injuries, then you have to pay them back for the bills that they’ve paid. The initial reaction by most people is that this isn’t right. You pay your health insurance premiums, expect your insurance company to pay the bills, and do not ask to be reimbursed when settling your injury case. We can also look at it from the medical insurance company’s point of view: they lost money because of the bad driver, so they think they have the right to be compensated for their losses.

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These health insurance companies hire collection companies to try to get the money back that they’ve spent on someone’s injuries due to an accident. The agents for the collection companies receive commissions based on how much they get back from the health insurance companies. One of the techniques used by the collection companies is to do anything they can to get information about the car insurance companies involved in the case. Their main goal is to place a lien on the case with the car insurance companies. Once a lien is placed on the case, then the car insurance adjusters won’t settle the case unless the injured person agrees to have them take out the medical lien amount from their settlement proceeds and pay the collection company the amount they’ve requested.

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We do everything we can to get the collection companies to discount the amounts they request. If the collection company has placed the car insurance company on notice of their lien, then it isn't easy to get them to reduce their lien. This is because they know that they are in a position of power. They know that the case can’t be settled until their lien is resolved. In these situations, they will usually only reduce their lien by about 10% at most. If the collection company hasn’t placed the car insurance company on notice, then we are in a much better position to get them to reduce their lien amount. This is because they know that we’re the ones in the position of power. When we settle the case, the client usually requests that we hold funds from the settlement in our client trust account to resolve the outstanding liens. We can then take as much time as we need to get the collection company to reduce their lien. In these situations, we can usually get them to reduce their lien by about one-third.

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This is an area of law that is constantly changing. There was a recent Hawaii Supreme Court decision which greatly limited the ability of the health insurance companies to get compensation for the medical bills that they paid. Whether the health insurance plan is an ERISA plan or not makes a big difference in how much medical bills must be paid back.

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Medical liens from Med-Quest (Department of Health Services) are supported by statute; but, the good thing about Quest liens is that they are required to be reduced by one third. Quest liens are known as super liens because statutory law requires that they are paid back.

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Medical liens from Medicaid, Medicare, and Tricare are also considered to be super liens because federal law requires that they are paid.

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Each health insurance company and government agency has different processes and procedures for requesting reductions and paying back liens.

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How To Negotiate With A Hawaii Auto Insurance Company So That You Can Get The Maximum Compensation Possible For Your Injuries

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Unfortunately, insurance companies don’t just offer you a fair settlement whenever you make a claim for your injuries.  Insurance companies are in the business of doing whatever it takes to pay the minimum amount possible for your injuries.  They will consistently lowball you whenever they get the chance.  They will always try to get you to take a settlement offer for much less than what you deserve.  Insurance companies are businesses, and they will do whatever it takes to make as big a profit as possible.  This is why you have to know how to negotiate with an insurance adjustor so that you can get the settlement that you deserve.

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The first rule of settlement negotiations is not to appear desperate.  For example, if you go to a used car dealer and tell them that you desperately need to buy a car right now, the dealer will know that he doesn’t have to give you a good deal.  He knows that you’re going to buy a car from him that day, no matter how bad of a deal he offers you.  On the other hand, if you go to a car dealer and say, “I don’t really need a car.  I already have several cars at home that I don’t even drive.  I’m just looking around to see if there are any great deals,” then the chances of you getting a good deal on a car are much higher.  In both situations, you could drive off with a car that day, but depending on how desperate you appear, it will make all the difference in whether you get a good deal or not.

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It’s the same with insurance settlements.  If you don’t appear to be in a hurry, then the adjustor will know that if they want to get the claim settled, they will have to offer you a fair settlement offer.  The more time you have to negotiate with the insurance adjuster, the better it will be for you.  Once you receive a settlement offer, you should wait two to three weeks before making a counteroffer.  You want the insurance adjustor to start to wonder if they offered you too low an amount, and you are just going to take the case to court instead of trying to negotiate with them.  The adjustor may call you after a couple of weeks to follow up on their offer.  This is exactly what you want.  You want to put them in a situation where they appear desperate to try to settle the claim.

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After 2-3 weeks, you should send a counteroffer in writing.  Your offers should always be in writing so that there’s a record of the offer.  Sending an offer by fax is better than by email.  Always put a deadline on the offer.  We recommend setting a deadline of one week for the offer.  Putting a deadline on the offer has several purposes.  First, it forces the adjustor to respond by the deadline.  Second, it expires your offer so that the adjustor can’t come to you later and agree to accept the offer.  Sometimes situations change.  You may end up needing additional treatment or maybe even surgery.  Occasionally, we have insurance adjustors turn down our offer and then, several months later, come back and want to accept the offer.  It’s always a nice feeling knowing that there was an expiration on the offer.  We say, “Sorry, that offer has expired; our current offer is _________.”

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One of the most important reasons to put your settlement offer in writing is to set up a possible “bad faith” claim.  A bad faith claim can be made if an insurance adjustor turns down a reasonable settlement offer, and then it turns out that a jury awards more than the offer that they turned down.  Their insured (the one paying the premiums) can then sue them for not trying in “good faith” to settle their claim.  In other words, the insured would have had to endure years of stress leading up to a jury trial when the case could have been settled years earlier if the insurance company had accepted the reasonable settlement offer.

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Ideally, you will go back and forth with the adjustor for as long as you can until the adjustor indicates that they’ve made their “final offer”.  Once you have negotiated with them for long enough for them to reach their final offer, then you know that you’ve done everything you can to negotiate their settlement offer up as high as possible.  It may take a couple of months, six months, or even a year to reach their “final offer.”  Of course, you can settle at any time.  There’s no rule that says you can’t accept a settlement offer before you reach their final offer.  Sometimes people are in a tough financial situation and are forced to take a settlement offer before reaching the final offer.

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Once the insurance adjuster indicates that they’ve made their final offer, then you need to make the decision whether to accept the offer or take them to court.  If you don’t want to go to court and don’t want to accept their offer, then you can continue to hold out.  It’s possible that if enough time passes, the insurance adjuster will eventually cave in and offer you more.  It’s also possible that there may be a change in insurance adjusters, and the new adjuster will be more generous than the last one.  You can wait as long as you want to try to get an acceptable offer.  The only deadline you have to be aware of is the Statute of Limitations.   Otherwise, there is no rush.

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It’s very rare that an insurance adjuster will take back a settlement offer.  In fact, the only situation where we’ve seen this happen is when we took back our settlement offer first.  Then, the adjuster did the same thing to retaliate.

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Just keep in mind that every adjustor and every insurance company is different.  Some adjusters are very motivated to settle.  Perhaps they get bonuses based on how many cases they settle.  Other adjustors seem to have no motivation whatsoever to settle cases.  They don’t return phone calls or respond to settlement offers.  Some adjusters are happy when you give up on the negotiation and take the case to court.  This means the claim is off their desk and on the desk of their attorney.  Some adjustors get bonuses for settling cases for lower amounts than their value.  It seems like each December, the adjustors are a little more motivated to settle cases; perhaps because their holiday bonus is dependent on it.

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In conclusion, to negotiate effectively with an insurance company, you need to be patient.  You need to be calm and cool.  In general, if you’re willing to wait it out, you can end up with a much better settlement than you would have if you were in a big hurry.  Also, don’t think you must be nasty with insurance adjustors.  It won’t work.  They’ve seen it all.  They’ve been threatened.  They’ve been yelled at.  They’re used to almost anything.  Most likely, if you are friendly, patient, and firm, you’ll end up with a happy settlement.