![]() ![]() You would possibly want them to take the offer since you would pay nothing under that settlement and be free from risk. But from your point of view, settling for two million dollars eliminates all the risk you face and if they refuse that offer, you face personal risk if they lose more than two million dollars at trial.So, from their own point of view, why settle for two million dollars? Since their insurance limit is two million, any verdict above that will have to be paid by you, personally. The insurance company has almost nothing to lose by turning down the offer because the most they could lose would be the two million dollars demanded even if they go to trial and a verdict of five million dollars is rendered.They might feel that the claim was worth, at most, fifty thousand dollars and tell you that is all they are willing to offer. They have little economic incentive to accept an offer that is equal to the maximum they would pay out. If that was accepted, it would cost you nothing…but would cost the insurance company the full two million dollars of their insurance. ![]() Assume the plaintiff demands a two-million-dollar settlement. A simple example would occur if you are sued for five million dollars and have only two million dollars of insurance available. ![]() There are times, however, when the interests of the insurance company and you are not in complete accord and a potential “conflict of interest” can arise. Since you are facing liability and they are insuring you for that liability and would have to pay the possible judgment, there is unity of interests and goals. If you are sued and have insurance that would cover that claim, it is common for your insurance company to assign legal counsel to defend you at their own expense. ![]()
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