Nuisance Value: How the Threat of a Lawsuit Can Increase Your Settlement...

The nuisance value of a personal injury suit can improve your chances of a fair settlement offer. A lawsuit is something all insurers want to avoid. It's costly. It's annoying. It's something that keeps the claim open far too long.

Even if they think they can win the lawsuit, it will still cost them lots of time and money. (Remember, your personal injury lawyer works on contingency, theirs doesn't.)

The nuisance value of a personal injury lawsuit is important to you as someone trying to make a claim. In a way, knowing that the insurance adjuster wants to avoid formal litigation is like having an ace up your sleeve.

For the most part, this is something you'd use to force a quicker settlement. You would show the adjuster that if your claim becomes a civil court case a jury would side with you, and they'd give a favorable damage award (so the adjuster might as well raise their offer now).

The last thing an adjuster wants is to have to pay a higher settlement amount plus legal fees. They also want to get your file off your desk so they can move on to the next case. After all, it's their job to clear a certain number of claims each month.

This brings us to "Nuisance Value"...

This phrase was coined by insurance companies to describe claims that are just that - a nuisance. The term is used when a claims adjuster can't see how their insured could possibly be at fault, and can't see a basis for a claim against them.

Other times it involves claimants seeking damages for injuries they can't prove exist. Soft tissue damage, for example, is something that you'll feel in terms of pain, but not always see through medical tests. When cases like this happen, the adjuster can't justify a settlement. There's a chance that with some of these cases a settlement isn't even deserved.

Still, they end up paying out a small sum of money. They pay that money because it's cheaper to make a small payment than to keep the case open any longer. For instance, if a claimant threatens a personal injury suit, and the adjuster is convinced it will really come to that, they'll offer a bit of money to get rid of the claim.

This even happens when the adjuster can say, without a doubt, that the claimant will lose the lawsuit. There's no evidence, negligence or injury, and no judge or jury will award any amount of money. Still, they settle.

They'll never call it a nuisance settlement, but you can tell when that's happened. Usually the offer is so low it won't even cover medical bills. Rarely, it will barely cover medical bills, but it won't account for any other damages.

In some cases, this is the best you can hope for. The nuisance value lesson is, if you have a legitimate claim but nothing to back it up, there's a good chance you'll get at least a small settlement.

When all else fails you can threaten a lawsuit. They'll likely throw some money at you to make you go away, but you don't have to take their offer right away. Hold out for another phone call or two. There's still a chance the amount will go up.

But don't fool yourself. When your case comes down to being offered a nuisance value settlement, there are two things you can do: be happy for the little money you get or find something to back up your claim.