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Personal Injury · answered on camera

Why Insurers Spend More Money Defending Than Settling

Quick answer

Oakland personal injury attorney Andrew Dósa explains that insurers often spend more defending a claim than settling it for two reasons: they don't want a reputation as an easy mark, and defense spending is an economic incentive. At year's end they justify premium increases to California's insurance commissioner based on those very defense costs.

Excerpt summaries from the video and transcripts · how we make them

Answered by Andrew Dósa · Oakland, CA

Highlights

0:33

— the income incentive that makes spending on defense worthwhile

1:15

— how those expenses become a justification to raise premiums

Frequently Asked Questions

Why do insurers spend more defending than settling?

Partly reputation—they don't want to be seen as an easy mark—and partly economics: defense spending is an income incentive rather than a pure loss.

How does defense spending affect premiums?

At year's end, insurers use those very defense costs to justify premium increases to the state insurance commissioner.

→ Full interview on Attorneys.Media

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Contact Andrew Dósa
Answered by

Andrew Dósa
The Law Offices of Andrew Dósa

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