Michigan lawyer discusses bad faith workers’ comp settlements and how to get maximum recovery.
We are constantly asked about settlements. This is when compensation benefits are traded for a lump sum cash payment. Money can be used for any purpose including medical treatment, vocational rehabilitation, paying off debt, starting a business, or retirement. It is an attractive option for those who want to get out from under the insurance company. Watch out for bad faith workers’ comp settlements that do not pay enough money.
The amount is going to depend upon how long a disabled employee must remain off work and future medical needs. Insurance companies do not want to overpay, and they can be ruthless. Negotiations on amounts must be treated like any other negotiation and each cash must be treated like it is eventually going to trial. Insurance companies will offer a small amount of money to people who they believe are in financial distress and cannot wait.
We think it is important to have medical and vocational evidence developed before negotiations begin. This means speaking with a doctor about future medical needs and having a vocational plan. Timing is everything and settling too early or too late can cost real dollars. Insurance companies have very little incentive to pay a fair amount if a person has already returned to gainful employment.
Statistics published by the Workers’ Disability Compensation Agency show the average amount in Michigan for 2019 was just $58,641.58. Most people are shocked to learn this fact because it does not seem like much money. This is especially true for disabled employees who needs lifetime work restrictions.
A good starting point for a negotiation is multiplying the weekly comp rate by 52. This shows how much the insurance company might have to pay in annual wage loss benefits. Insurance companies will typically pay an amount based upon number of years. Here are some types of bad faith workers’ comp settlements that you need to watch out for.
Bad faith workers’ comp settlements based upon independent medical examinations (IME).
Insurance companies hire doctors to perform so called “independent” medical examinations. These are usually carried out by physicians who earn big bucks testifying against injured workers. These medical examinations should not be a starting point for negotiations. We recommend speaking with a treating doctor about causal relationship and future medical needs. Hire a lawyer if benefits are cut-off.
Post-injury wage earning capacity (PIWEC).
Watch out for insurance companies who insist on using post-injury wage earning capacity (PIWEC) to reduce the weekly comp rate. This usually occurs when someone is considered only “partially disabled.” Vocational counselors are hired to perform transferable skills analysis and labor market surveys. Any job that is found will be used as justification to reduce what is supposed to be paid. Our experience shows that insurance companies abuse this part of the law and come up with artificially low offers for bad faith workers’ comp settlements.
Bad faith workers’ comp settlements based upon video surveillance or activity checks.
Insurance companies routinely hire private investigators to conduct video surveillance of individuals on collecting benefits. We have even seen claims adjusters makes snap decisions based upon something posted to social media. Video surveillance or activity checks should not be taken out of context and used to justify an offer.
Our law firm never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 316-8033 for a free consultation today.