The simple answer is yes, insurance companies often do settle cases out of court. However, their reasons for wanting to settle are based on protecting their own financial interests, which may not align with your need for fair and complete compensation.
An insurance company’s primary goal is to resolve a claim for the least amount of money possible. While an out-of-court settlement can be a faster path to receiving funds, accepting the first offer—or any offer—without understanding its full implications could leave you with lasting financial hardship.
For an insurance company, a personal injury claim is a business calculation. Every decision is weighed in terms of risk, cost, and efficiency. Settling a case out of court often presents the most favorable outcome for them, and understanding their motivations can help you see the process from their perspective.
A courtroom trial is an expensive and unpredictable process for everyone involved. For an insurance company, the costs can add up quickly. They have to pay their own attorneys, cover court filing fees, and hire expert witnesses to testify on their behalf. These expenses can become substantial, sometimes even rivaling the cost of a settlement itself.
More importantly, a jury is a major unknown. While an insurer can estimate the potential value of a claim, it can never be certain what a group of twelve people will decide. A jury could be swayed by the story of the injured person and award a verdict far higher than the company ever anticipated.
This is often called a “runaway verdict.” A settlement, on the other hand, is a fixed, predictable number. It eliminates the risk of a massive financial loss and allows the company to close the case with a definite cost.
The legal process can be lengthy. From the initial filing of a lawsuit to the final verdict, a case can take months or even years to complete, especially if it’s complex. This extended timeline consumes the valuable time of the insurance company’s adjusters, investigators, and legal staff.
By settling, the insurance company can resolve the matter quickly and move on, which is a significant operational advantage for a high-volume business.
Court trials are a matter of public record. Everything said and filed in court is generally accessible to anyone. Insurance companies often prefer to keep the details of an injury claim private, and settlements can help them do that. Many settlement agreements include a confidentiality clause, which prevents the injured person from discussing the terms of the agreement.
This privacy is valuable to the insurer because a large public verdict can lead to negative publicity. It can also set a “precedent”—not necessarily a legal one, but a public one. If word gets out that a jury awarded a large sum for a certain type of accident, it might encourage others to file similar claims and expect similar results. A private settlement avoids this, helping the company manage its public image and control information.
Soon after an accident, you may receive a phone call from an adjuster from the at-fault party’s insurance company. They might sound friendly and concerned, and they may even make a quick offer to settle your claim. It is crucial to understand that this first offer is a calculated tactic.
Insurance adjusters are trained negotiators whose job is to protect the company’s financial interests. Their performance is often measured by how successful they are at closing claims for the lowest possible amount. The initial offer is a starting point in their strategy. They make a low offer to see if you are uninformed about the true value of your claim or in a difficult financial position and willing to accept anything.
This first offer is almost never enough to cover the full extent of your losses, particularly because it often fails to account for:
Accepting a quick offer may seem like a relief, but it often means sacrificing the financial security you need for a complete recovery.
While settling is often preferred, there are situations where an insurance company will refuse to make a fair offer or may even deny the claim entirely. They will choose to fight the case in court if they believe they have a strong chance of winning and paying nothing.
If the insurance company believes its policyholder was not responsible for the accident, it will not offer a settlement. They will invest their resources into proving that you were the one at fault. In Pennsylvania, this is particularly important because of a rule called modified comparative negligence.
Under this rule, you can still recover damages even if you were partially at fault for an accident, as long as your share of the blame is 50% or less. However, your total compensation will be reduced by your percentage of fault. For example, if you are found to be 20% at fault for a car accident near the DuBois Mall, you can only recover 80% of the total damages. If the insurance company can convince a jury that you were 51% or more at fault, they owe you nothing.
Another common defense tactic is to argue that your injuries are not as severe as you claim. The insurer might suggest that your injuries were pre-existing or that you are exaggerating your pain. They will scrutinize your medical records, looking for any inconsistencies or gaps in treatment.
This is why it is so important to seek immediate medical attention after an accident and follow all of your doctor’s recommendations. Consistent medical documentation creates a clear record of how the accident has affected your health.
Every insurance policy has a coverage limit, which is the maximum amount the company will pay for a single claim. If your damages exceed this limit, the insurer has no obligation to offer you more than the maximum amount stated in the policy. Additionally, some policies have specific exclusions for certain types of incidents.
If they believe the circumstances of your accident fall under one of these exclusions, they may deny the claim altogether.
“Settling out of court” is more than just a single conversation; it is a structured process of negotiation that can take weeks or months. It involves building a strong case on your behalf to show the insurance company that you are serious and that your claim has merit.
The process generally includes these stages:
Having a legal team that is familiar with the local court systems, whether in Cambria County for a case in Johnstown or Centre County for one near State College, can be a significant advantage. The insurance company knows that an attorney who regularly practices in those courts is fully prepared to file a lawsuit and present your case to a local jury if negotiations fail.
The most significant risk of accepting an early settlement is that you forfeit your right to seek any further compensation for your injuries. Once you sign that release agreement, the case is permanently closed. If you later discover your injuries are worse than you thought and you need another surgery, you cannot go back and ask for more money.
Before you even consider a settlement offer, it is vital to have a complete understanding of the full impact the accident will have on your life. This means waiting until you have reached what doctors call Maximum Medical Improvement (MMI). MMI is the point at which your medical condition has stabilized and is not expected to improve any further. Only then can you and your doctors accurately project the cost of your future medical needs.
Here are some key questions to consider before accepting any settlement offer:
Answering these questions honestly will help you determine if a settlement offer is truly fair or if it falls short of what you need to be made whole.
Facing a large insurance company on your own can be a difficult challenge. A personal injury attorney works to level the playing field and advocates solely for your interests. They begin by calculating the full, long-term value of your claim, often consulting with medical and financial professionals to project future costs. This provides a clear, evidence-based figure for negotiations.
Your attorney also handles all communication with the insurer, protecting you from tactics designed to weaken your claim and allowing you to focus on your health. Perhaps most importantly, having legal representation signals to the insurance company that you are prepared to go to trial. This credible threat of a lawsuit is often the key motivator for an insurer to raise their offer to a fair settlement rather than risk an unpredictable and costly jury verdict. An attorney ensures your case is taken seriously from the start.
Here are answers to some common questions people have about the insurance settlement process in Pennsylvania.
Bad faith occurs when an insurance company fails to fulfill its obligations to its policyholder without a reasonable basis. This can include unnecessarily delaying an investigation, refusing to defend a lawsuit, or misrepresenting the facts or policy provisions. Pennsylvania has specific laws that protect consumers from these practices, and an insurer found to be acting in bad faith can face significant penalties.
In Pennsylvania, the statute of limitations for most personal injury cases is two years from the date of the injury. If you do not file a lawsuit within this two-year window, you will likely lose your right to seek compensation forever. There are very few exceptions to this rule, so it is important to act promptly.
No, settling a claim is not an admission of fault. A settlement is simply a compromise to resolve a legal dispute. In fact, most settlement agreements contain language that explicitly states the agreement is not an admission of liability by either party.
When you are recovering from a serious injury, you need a legal team that is ready to fight for the full compensation you deserve. The insurance company has professionals working to protect their interests, and you should have a dedicated advocate on your side.
At Marcus & Mack, our mission is to seek justice for the injured. We are unified by a passion for helping people through some of the most difficult times of their lives. We understand the physical, emotional, and financial toll an accident can take, and we are here to provide the support you need. We will handle the complexities of your claim so you can concentrate on what matters most: your recovery.
We work on a contingency fee basis, which means you owe no attorney’s fee unless we recover financial compensation for you. Don’t wait to learn about your rights. Contact Marcus & Mack today to schedule a free, no-obligation consultation. We are here for you 24/7, ready to listen and help.
Marcus & Mack
