"Nuisance value" is a term used by claims adjusters to describe an amount of compensation they're willing to pay to make a personal injury claim go away. These payments are usually a nominal amount, given when their insured's liability is unproven, or when the adjuster believes the victim's damages are questionable.
Personal injury settlements are based on two main issues:
Before an adjuster considers a claim's value, she must first decide if her insured's actions were the primary cause of the victim's injuries. If the adjuster decides her insured was responsible, the next step is to review the victim's damages. Those damages normally include medical treatment costs, out-of-pocket expenses, and lost wages.
Adjusters have their own method of calculating the amount they believe will fairly compensate a victim. That amount is considered the value of the claim. The victim also calculates the amount she believes is fair. Negotiations ensue, and eventually a settlement is reached between the two parties. But sometimes the process isn't so smooth...
Through her investigation, the adjuster could determine her insured wasn't liable for your injuries. She'd then deny your claim and close her file. It's also possible she could accept liability for her insured, but not believe your damages merit any compensation. Either way, she'd decide your claim has no value.
However, the adjuster still may have the authority to pay some amount, if necessary. But unless you know how to convince her to act on that authority, you'll likely end up with nothing.
Having a claims adjuster tell you your claim is denied can be very frustrating, especially if you're convinced her insured is liable for your injuries. You may be in pain, and may have accumulated medical bills, out-of-pocket expenses, and lost wages (these expenses are collectively known as "special damages," or just "specials").
To avoid running into this problem, try getting the adjuster to accept liability before you accumulate too many medical bills and expenses.
If you're injured, however, you probably have no choice but to seek treatment, regardless of whether the adjuster has accepted liability. Most claims adjusters take their time with their decision to accept liability, but are rather quick to deny a claim.
Even if your claim is denied, you don't have to give up. There are some legitimate tactics you can use to convince the adjuster not to close your file until she pays you at least some amount of money. This is commonly known as compensation for the claim's nuisance value.
What amount of money is the adjuster willing to pay to make you go away? Enough to have you stop calling her every day, leaving messages about how you disagree with her decision, or messages asking to speak with her supervisor?
Although good-faith continued contact is acceptable, it must be based on some form of credible evidence, however slight, proving that you're entitled to some compensation for your injuries. Otherwise your calls may be considered harassment, which serves no purpose and may get you into trouble.
Ask the adjuster to listen to your arguments once more without interruption. Before you do, review every bit of evidence you have supporting your claim. If you can't find something new to add to your existing case, however, you're wasting your time.
The most effective evidence will be anything hinting at the insured's liability. Review photographs, witness statements, and every other aspect of the events surrounding your injury.
When speaking with the adjuster, re-emphasize your belief that her insured's actions were in some way responsible for your injuries. If you can show the adjuster something new about the evidence, you may be able to get her to offer some small amount of money.
Another method of securing nuisance value compensation is to consider filing a lawsuit against the insured. You generally won't file a lawsuit against the insurance company. Instead, you're legally obligated to sue their insured personally.
Look at the situation from the insured's point of view. Imagine you were in a car accident and then referred the matter to your insurance company. The last thing you would expect is to be interrupted at work or home several months later by a sheriff serving you with a lawsuit. That's what you pay insurance for - so you don't get sued.
Adjusters know very well their failure to settle a clam may result in their insured being sued. If that happens, the adjuster would be hearing from her insured, from you, and from her supervisor. She doesn't want to be in that position.
You must be careful though. Baseless threats of litigation are improper. Attorneys can be reprimanded by the courts and their bar association for threatening to file a lawsuit while knowing full well they had no intention of doing so.
Although you wouldn't be subject to the same rules as attorneys, hopefully you can see how idle threats are inappropriate. Your threats must be based on good faith. Unless there is some basis, however small, the threat of a lawsuit will not be productive.
Adjusters can usually tell when a victim is serious about threats of litigation. If you believe you have a legitimate chance of some form of relief through the courts, threatening a lawsuit is proper. That threat can be all you need to get the adjuster to offer some amount of compensation.
Emphasize the Cost of Litigation
The logical extension of a lawsuit is the cost of litigation. Insurance company defense attorneys are usually independent contractors who bill the company by the hour. Once you file a lawsuit, even in small claims court, a process of defense is set in motion.
The company's attorneys have to respond with the appropriate legal documents, and follow that with a subpoena to take your deposition. The insurance company has to pay for all that legal work.
The adjuster knows about the costs of those procedures. There's nothing wrong with reminding her of the probable litigation expenses her company will incur if you file a lawsuit. Once the adjuster realizes you've done your homework, there's a good chance she'll make an effort to settle your claim quickly, even if it's only for nuisance value.
Insurance companies and their adjusters do draw the line sometimes, even when they might have the authority to settle a claim for nuisance value. There are some claims they simply will not settle.
Knowing when they will take a stand is impossible. You can improve your odds if you understand what it takes to prompt a nuisance settlement, and how to apply what you've learned, but there are never any guarantees in claim negotiations.
Claims adjusters can have upwards of 100 claims assigned to them at any one time. They're not going to give money away without some legitimate basis, but they also don't want to spend a lot of time and effort on valueless claims. The tactics we've discussed may help you provide just the basis an adjuster needs to pay a small amount and get your file closed.
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