Nuisance Value Settlements: Getting Payment for a Weak Injury Claim

Learn how to negotiate a nuisance value payout from the insurance company for injury claims they would rather deny.

A nuisance value settlement is a small amount of money paid in exchange for a release of liability. It’s an insurance adjuster’s way of getting rid of a bothersome claim file.

Nuisance payments are generally small amounts paid when there’s no proof an insured was liable, or when the adjuster doesn’t believe the victim’s damages.

Harvard Law School describes a nuisance lawsuit as: 

“[A] suit in which the plaintiff is able to obtain a positive settlement from the defendant even though the defendant knows the plaintiff’s case is sufficiently weak that he would be unwilling or unlikely actually to pursue his case to trial.”¹

Insurance adjusters handle dozens of claims every day. Most claimants have strong cases, and it’s only a matter of negotiating a settlement. Occasionally, adjusters may end up with injury claims so weak that, in the adjuster’s opinion, they’re not worth haggling over.

Weak injury claims are usually flatly denied. But sometimes an adjuster can be induced to pay a nuisance value to make a claim go away.

Even if your claim is denied, you don’t have to give up. Here’s what you need to know to negotiate a nuisance-value claim settlement.

4 Tactics for Negotiating a Nuisance Settlement

When the adjuster doesn’t believe your damages were caused by their insured, either because the insured wasn’t to blame for the accident or because your injuries aren’t from the accident, the usual methods of calculating what your claim is worth go out the window.

There are some legitimate tactics you can use to convince the adjuster not to close your file without paying at least a small amount of compensation. In other words, you can try to negotiate a nuisance value payout.

If you don’t have a strong claim, you still might recover a small settlement with these tactics:

1. Continue Contact in Good Faith

Maintain persistent good-faith contact with the adjuster. Your arguments must be based on some form of credible evidence, however slight, proving that you’re entitled to some compensation for your injuries.

Calling every day, leaving messages about how you disagree with the decision, or angry messages threatening a class action may be considered harassment, which serves no purpose and may get you into trouble. Politely follow up with new or additional information, by email or phone.

2. Look for Additional Evidence

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. Look for proof that the at-fault party did something wrong or failed to do what any reasonable person would do in the same situation.

When speaking with the adjuster, re-emphasize your belief that the insured’s actions were in some way responsible for your injuries. If you can show the adjuster something new about the evidence, you may get a small settlement offer.

3. Consider Filing a Lawsuit

Another method of securing nuisance value compensation is to consider filing a lawsuit against the person you believe is at fault. Tort lawsuits are filed against the at-fault person, never their insurance company.

Adjusters know very well their failure to settle a claim may result in their insured being sued. If that happens, the adjuster would hear from the insured, you, and the adjuster’s supervisor.

You must be careful, though. Baseless threats of litigation are improper. The adjuster can easily call your bluff, knowing you probably can’t find a personal injury lawyer willing to litigate your case.

You could certainly file a small claims lawsuit on your own, rather than pay the higher fees to file in district court. Either way, if your case is weak in the first place, you may end up losing and on the hook for the other side’s legal fees. If you win, keep in mind that small claims court plaintiffs usually can’t ask for pain and suffering compensation.

Adjusters can usually tell when a victim is a serious potential litigant. If you believe you have a legitimate chance of some form of relief through the courts, threatening a lawsuit may be a solution for you. That threat can be all you need to get the adjuster to offer some amount of compensation.

4. 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, the insurance company is obligated to defend its insured.

The insurance adjuster knows about legal defense costs. There’s nothing wrong with reminding the adjuster that settling with you will probably cost less than litigating, even if they win.

Once the adjuster realizes you’ve done your homework, there’s a good chance they’ll make an effort to settle your claim quickly, even if it’s only for nuisance value.

Why Personal Injury Claims are Denied

After a car accident, slip and fall, or some other type of incident, the injured victim normally files a  claim with the at-fault party’s insurance company. In some circumstances, the adjuster tells them they intend to deny the claim.

Adjusters often deny claims because:

  1. Their insured was not liable for the accident
  2. Their insured was partly at fault, but the claimant was mostly to blame
  3. Their insured was at fault, but the adjuster questions the claimant’s injuries

Example: Claim Denied for Questionable Injuries

Patty stopped her minivan a few feet behind Sam, who was waiting for a red light in his pickup truck. Patty was reaching into the back seat when she inadvertently took her foot off the brake, causing her car to roll forward, striking the rear-end of Sam’s truck.

Patty and Sam exchanged information and agreed not to call the police since there was no visible damage to either vehicle and both drivers felt fine. They went on their way.

Patty called her insurance company to report the auto accident, explaining there was no damage and no injuries.

A couple of days later, Sam woke up stiff and sore in his neck and shoulders. He called off his construction job and went to urgent care. Sam told the doctor he was rear-ended in a car accident.

The doctor determined that Sam had pulled a muscle or might have a mild case of whiplash from the accident. Sam was ordered to take it easy for a few days and use over-the-counter pain relievers. Sam soon was better and didn’t go back to the doctor.

Sam filed an injury claim with Patty’s insurance company, demanding $5,000 for his small medical bill, a day off work, and his pain and suffering.

Sam’s claim was quickly denied because the adjuster found no evidence to suggest that Sam’s injury was caused by the accident.

The adjuster explained that there was no vehicle damage from the low-impact collision, Sam’s truck was much bigger than Patty’s car, and his delay in medical treatment indicates his alleged injuries were not caused by the accident.

Having an adjuster deny your claim can be very frustrating, especially if you’re convinced their insured is liable for your injuries. If you think the adjuster is wrong, contact a personal injury attorney for an honest opinion on the strength of your case.

Nuisance-Value Settlement Problems

Insurance companies and their claims 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 will not settle.

Your negotiations must be based on good faith. Unless there is some basis, however small, the threat of a lawsuit will not be productive. Don’t overplay your hand. Adjusters are quick to shut down questionable claims as a deterrence to potential insurance fraud.

Claims adjusters often juggle dozens of injury claims 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.

You can improve your odds if you are persistent, professional, and have at least a little evidence that gives the adjuster an excuse to approve a nuisance value payout. But understand there are never any guarantees in claim negotiations. Here are more tips to negotiate the best settlement.

Seek legal advice from a personal injury attorney. Most injury attorneys offer a free consultation. If your claim isn’t worth much, a good injury lawyer may be able to tell you what you’ll need to bolster your case.

If you decide to handle an injury claim on your own, these negotiation tactics might help you negotiate a settlement agreement for an amount that at least covers your financial losses.