It may sound odd, but liability insurers go through different cycles in which they are inclined to settle cases before a lawsuit is filed and other times only after litigation has at least preliminarily gone forth.
This phenomenon is not acknowledged by the insurance adjusters but in modern era claims negotiation it is routine for insurers to make pre-litigation offers that are not remotely calculated to actually settle a given claim.
As an example, I recently elicited a policy limits offer from Liberty Mutual in a case where my client had incurred $11,000.00 in medical expenses and $1400.00 in lost income. That produced a $16,000.00 offer and I filed suit.
We went through the discovery process with dates picked for deposition and a pre-trial set for several months hence and I had to repeatedly admonish the lawyer and adjuster that they could well be exposing their client/insured to a verdict in excess of the policy limits.
I also gave them my most recurrent speech in response to unreasonable offers which is essentially a simplistic story problem. Bob's client was injured in a crash and incurred $11,000.00 in medical bills. She was offered $16,000.00 to settle. If she settled she would owe Bob the costs incurred of approximately $700.00 plus 1/3 of the settlement or $5,333.33. Subtracting these amounts would leave her Less than $10,000.00 to pay $11,000.00 in medical bills leaving her with less than nothing.
Ultimately the $30,000.00 policy limits were tendered and accepted but not without time and expense wasted litigating the case. Thus, one can say that the present cycle for Liberty Mutual is to make insufficient offers pre-litigation and then when true excess verdict possibility attaches to do what was inevitable before litigation.
In the same relevant time period an analogous case came up with Geico. Rather than prolong their insured's exposure to a lawsuit they put out several minimally acceptable offers before putting up their policy limits.
Geico goes through periods when they make unreasonable pre-litigation offers but then when suit is filed and a litigation adjuster gets the file it miraculously becomes worth more and voila settlement.
To be clear, teasing out what cycle an insurance company is in is tricky and is not necessarily always discernible. Some carriers never seem to cycle into a reasonable settlement posture absent a lawsuit.
