You probably have heard about workers compensation settlements. Ads by attorneys on television often talk about person injury and workers compensation settlements.
Those ads usually do not tell you a whole lot. It often is just someone saying that their attorney got them a certain amount of money. They do not explain why the settlement was a certain amount or what amount you should get.
The attorney ads on TV also do not usually discuss why insurance companies settle cases. To understand why insurance companies settle cases, you first need to understand what a workers compensation settlement is.
Basically, a settlement is an agreement between you and the insurance company. In that agreement, you give up your workers compensation case and the insurance company buys it from you for a certain amount of money.
Under Georgia workers compensation law, a settlement is about the only way to get a lump sum payment of benefits. Georgia workers compensation does not provide the ability to get a lump sum verdict from going to court. You can go to workers compensation court, but the judge does not award you a settlement.here is no lump sum verdict otherwise.
Why would insurance companies want to settle workers compensation cases?
If insurance companies do not have to settle with you, why would they choose to? To understand that, first remember that most insurance companies are for profit businesses. They are in business to make money.
In a workers compensation case, they make money by collecting insurance premiums from employers. Just like you pay car insurance premiums or health insurance premiums, employers pay workers compensation insurance premiums.
These premiums buy an insurance policy that covers the employer. When someone gets hurt on the job, the insurance company has a duty to pay out workers compensation benefits as part of that insurance policy.
When they have to pay out money, insurance companies want to pay as little as possible. The less they pay, the more money the insurance company makes.
What does settlement have to do with how insurance companies make money?
Insurance companies try to predict what different types of cases will cost. That is how they try to decide what to charge you for a particular type of insurance policy.
In workers compensation cases, insurance companies evaluate your particular case. They look at the cost of medical treatment. They also look at the weekly benefits they could have to pay. Based on that, the insurance company comes up with an estimate of what your case is going to cost them in the future.
Once they know what your case likely will cost them in the future, they can make a decision about what they should offer to “buy your case” by settling. When they do this, they want to make a good business decision so they will save money. So, they will try to settle your case for less than it probably would cost them if your case stayed open.
Why is it important to know why insurance companies settle cases?
You do not have to settle your case. But, you way want to explore settlement. Knowing how the insurance company evaluates cases will help you avoid the mistake of settling your case for too little.
You probably will want to consider evaluating the case the same way that the insurance company does. This is how I evaluate workers compensation cases for the clients I represent.
Insurance companies pay money in settlement when they believe that your case will cost them a lot in the future. That means they would have to pay a lot of workers compensation benefits if your case stayed open. Convincing them that your case will cost a lot of money if it stayed open should lead to them paying more money in settlement.
What if I have other questions about settlement?
You need to make a good decision about settlement. It is a very complex topic. This article I wrote about settlement discusses the settlement process in more detail.
Before discussing a settlement amount with the insurance company, I recommend that you have a free consultation with an attorney who specializes in Georgia workers compensation. Having an attorney on your side who knows about workers compensation likely will help you get a good result.