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Get Your Claim Paid: The Profile of a Good Claim Case

These are the things that the judges and the politicians have said. Obviously, the lawsuit marketplace has its own set of standards for determining whether or not a case is a good one.

In evaluating an insurance lawsuit's potential, life seems to imitate art. Lawyers usually look for the elements that would make a good John Grisham thriller. They ask questions like:

  • What is the personal plight of the policyholder or claimant? How sad is the story? In the minds of the jurors, will it justify punishing the insurance company?
  • What is the amount of the contract claim? Is it sufficient to justify a substantial compensatory award? Is the fact that the policyholder has been deprived of this sum justification for a significant emotional distress award?
  • What amount of compensatory damages is likely to be awarded for economic loss, emotional distress and attorney fees?
  • How long has the policyholder been with the insurance company? A jury will expect the company to go easier on a person who has been a policyholder for a substantial period of time. A company's refusal to do so may make the jury more likely to award punitive damages.
  • What is the length of time from claim to compensation? The longer the period from the time of the initial injury to trial -- or payment of what was rightly owed -- the greater the potential for punitive damages.
  • What is the overall perception of the insurance company? Marketing lines about good hands, good neighbors or pieces of the rock set high standards for behavior. If a company sells itself one way and then acts in another, it may be ripe for big damages.

People seeking punitive damages against their insurance carriers must prove a higher "threshold of actual malice" to succeed.

Most courts define actual malice as a company knowing a claim is proper, but willfully, maliciously and intentionally using unfair business practices to resolve the claim.

To counter the financial advantages insurance companies usually have, many insurance lawyers prefer to establish class-action lawsuits. These lawsuits assemble large groups of people who may have been ripped off by an insurance company and then proceed with one or two people's cases as examples of the general problem. Verdicts in these cases, when they come, are huge -- and intended for all the aggrieved people.

Class-action claims can increase the seriousness of the case in the eyes of the court, the jury and even the insurance company itself. They also allow admission of other claims stories that can enhance the potential for punitive damages. And, finally, evidence of a systematic practice of wrongdoing makes the insurance company a ripe candidate for punitive damages.

The greater the amount of compensatory damages, the greater the potential for punitive damages. This is especially true in so-called "cap" states, where the law limits claims for emotional damage or other losses to $50,000 or $100,000. In these places, the punitive damages -- often calculated as a multiple of actual dam-ages -- are the only real threat.

These measures are all dire. Without any doubt, it's best to work with an insurance company to convince them that your claim should be paid. In this book, we've considered preparations you need to make, the communications insurance companies expect, negotiating tactics that are common and the arguments that work. If you apply these in a steady, determined manner, you should be able to get more done than if you call in the lawyers immediately.

Insurance isn't dramatic, like in the movies. It's just business. If you treat it that way, you'll improve your position in any negotiation.

Good luck.

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