Handling and processing claims can be a delicate and demanding process. Add into the mix that litigation could be a factor and that process can become even more demanding. Let’s look at some strategies that can be practiced to avoid litigation and potential conflicts.
What are the steps to handle a claim?
The first step is to obtain all of the facts of the loss. This would include but is not limited to obtaining a police report (sometimes for a fee), a description of the loss, and witness statements that include the involved parties. It is important to gather all of the evidence as quickly as possible so that the situation is fresh in mind. As time goes on the witness is more opt to forget the actual facts of the loss and the importance of responding to the investigating adjuster in a timely manner.
Be sure to collect as much information as possible from the other avenues, such as street diagrams and video surveillance footage that may be available in the area. In difficult areas, a forensic firm could assist with the reconstruction of the accident. Always follow the laws, rules, and regulations in the state the loss occurred.
Follow the Guidelines of the State Where the Incident Occurred
States have different medical settlement policies based on fault/no-fault statutes, so it is important to consider that information during the fact-finding process.
LIST OF NO-FAULT INSURANCE STATES (https://www.moneygeek.com/insurance/auto/no-fault-auto-insurance-states/)
Minimum Requirement
Florida
- $10,000 property damage liability per accident
- $10,000 personal injury protection per person
Hawaii
- $20,000 bodily injury liability per person
- $40,000 bodily injury liability per accident
- $10,000 property damage liability per accident
- $10,000 personal injury protection per person
Kansas
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
- $25,000 uninsured/underinsured motorist coverage per person
- $50,000 uninsured/underinsured motorist coverage per accident
Personal Injury Protection per Person:
- $4,500 per person for medical expenses.
- $900 monthly for up to a year of disability or loss of income coverage.
- $25 a day for in-home services.
- $4,500 for rehabilitation-related expenses.
- $2,000 for funeral, burial or cremation expenses
Survivors Benefits:
- $900 per month for a year for disability or loss of income
- $25 per day for in-home services
Kentucky
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
- $10,000 personal injury protection per person
Massachusetts
- $20,000 bodily injury liability per person
- $40,000 bodily injury liability per accident
- $5,000 property damage liability per accident
- $20,000 uninsured/underinsured motorist coverage per person
- $40,000 uninsured/underinsured motorist coverage per accident
- $8,000 personal injury protection per accident
Michigan
- $20,000 bodily injury liability per person
- $40,000 bodily injury liability per accident
- Unlimited personal injury protection per person
- Unlimited personal injury protection per accident
- $1 million property protection
Minnesota
- $30,000 bodily injury liability per person
- $60,000 bodily injury liability per accident
- $10,000 property damage liability per accident
- $25,000 uninsured/underinsured motorist coverage per person
- $50,000 uninsured/underinsured motorist coverage per accident
- $40,000 personal injury protection per person
New Jersey
- $5,000 property damage liability per accident
- $1,000 personal injury protection per person
New York
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $10,000 property damage liability per accident
- $25,000 uninsured/underinsured motorist coverage per person
- $50,000 uninsured/underinsured motorist coverage per accident
- $50,000 personal injury protection per person
Other:
- $50,000 liability for death per person.
- $100,000 liability for death per accident.
North Dakota
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
- $25,000 uninsured/underinsured motorist coverage per person
- $50,000 uninsured/underinsured motorist coverage per accident
- $30,000 personal injury protection per person
Pennsylvania
- $15,000 bodily injury liability per person
- $30,000 bodily injury liability per accident
- $5,000 property damage liability per accident
- $5,000 medical payments coverage
Utah
- $25,000 bodily injury liability per person
- $65,000 bodily injury liability per accident
- $15,000 property damage liability per accident
- $3,000 personal injury protection per person
Again, it is crucial to follow the state laws where the incident occurred. Finalize liability as quickly as possible after obtaining all evidence related to the incident.
Communicating with the Parties Involved
Keeping the lines of communication open during the entire process is imperative and will help to avoid litigation. Once all of the information has been gathered, communicate with the claimant and work toward a fair and reasonable settlement offer if warranted.
So, what is typically included in a fair and reasonable settlement offer? One can expect damages to be rendered and any out-of-pocket expenses to be included if they apply.
If nothing further is pending, you can expect the case to be open and closed within 30 days. However, if injuries are included in the claim, the file may stay open for months to a few years depending on the injury and demand.
If Litigation Can Not Be Avoided
Litigation can sometimes be unavoidable and it can be very costly. Mediation and arbitration are both options that should be considered. Mediation is when a third party hears both sides and makes a recommendation to the courts. A mediator is not privy to either side. Arbitration is a board of several other peers. Many adjusters hear cases for other insurance companies which have been submitted through the Arbitration Forums website. Each side presents its contentions through the website and a hearing date is determined. Adjusters can request a live arbitration if additional evidence needs to be presented such as a video.
On Average, How Many Claims Reach Litigation?
On average, 5% of auto claims, 20% of bodily injury claims, and 20% of property damage claims reach litigation. These percentages can fluctuate based on policies and state regulations.
Is There a Time Limit to Settle a Claim Before Litigation?
Claims should be settled before the statute of limitations approaches to avoid litigation. The statute of limitations depends on the state, so it is important to try to settle as soon as reasonably possible.
Communication is a very important factor when trying to avoid litigation. Once you have gathered all of your evidence and feel comfortable making a fair and reasonable settlement offer, communicate that information to your claimant or attorney.
Veritas Administrators has a dedicated and experienced team of General Liability Claims Specialists. To learn more about our ability to partner with you on your general liability claims, see our “Learn More” button, or feel free to request a phone call.
