When insurance compensation falls short

Why obtaining truly adequate compensation is harder today than it used to be.

It often happens that a person who suffers a loss — an accident, an injury, damage to property — is offered by the insurance company an amount markedly lower than what is actually due. It is not an impression: it is the result of deep transformations — economic, social, regulatory — which over the last twenty years have altered the balance between claimants and insurers. The causes lie on two levels: the out-of-court level (what happens before litigation) and the judicial one.

The out-of-court level

1. Direct settlement has flattened payouts. Born to speed up claims handling, Italy’s direct-settlement scheme has standardised assessments: insurers work on shared grids and common cost logics, narrowing the room for negotiation and aligning offers at a medium-low level.

2. Fear of legal costs. Many people give up enforcing their rights for fear of expenses out of proportion to the amount in dispute. Insurers calibrate their offers precisely on this asymmetry.

3. An industrialised defence system. Companies now operate with in-house physicians, loss adjusters, internal counsel and standardised protocols: the initial dialogue is no longer a negotiation between equals.

4. From social function to financial logic. Insurance has progressively lost the mutualistic, social dimension that originally characterised it, replaced by a corporate culture oriented to shareholder profit and cost-cutting. Claims departments — once staffed by people with solid legal training — have been downgraded and treated as mere cost centres. The result is a strategy of systematic resistance, a sort of “rubber wall”: denying or contesting wherever possible, even in the face of clear liability and serious losses that would once have received a reasonable offer, if only to contain litigation costs. Across large numbers, the percentage of claimants who give up makes the strategy statistically profitable.

5. Information asymmetry. The average claimant does not know the reference tables, the recoverable heads of damage, or the comparable precedents. The insurer has the full picture — and calibrates its offer within the space of that ignorance.

6. Algorithms and automated valuation. A growing share of offers is produced by software working on average parameters: the specificity of the individual case risks dissolving into the averages.

7. Time as leverage. A person who has suffered a serious loss has immediate needs. The insurer knows it, and uses its own capacity to wait as an instrument of pressure: those who can wait obtain more, those in a hurry accept less.

8. A climate of suspicion. Years of campaigns about insurance fraud have shifted suspicion onto the injured party, who now sits down at the table having to prove they are not a fraudster before being recognised as a victim.

The judicial level

1. Legislation aimed at containment. The Italian legislator has repeatedly intervened with rules that narrow the claimant’s position: statutory tables for minor injuries, stricter evidentiary requirements, constraints on non-pecuniary damage. The goal of stabilising the industry’s accounts has been pursued by shifting part of the burden onto those who suffer the loss.

2. A new judicial attitude. For years the courts were perceived as generous. Today the attitude has changed: more rigour on proof, greater severity on the personalisation of awards, caution towards automatic recognitions.

3. Stricter procedural rules. The reforms of Italian civil procedure have sharpened preclusions and evidentiary burdens. Evidence not properly pleaded at the right moment can weigh decisively on the outcome.

4. The length of proceedings. A damages case can last years: the wait itself becomes an economic variable. Many accept settlements at a discount just to close the matter — and slowness, in effect, works for the party with the broadest shoulders.

5. Personalisation is ever harder. The tables developed by the main courts have become an almost rigid reference. Recent case law is reluctant to allow significant departures, even where the specific case would justify a higher award.

6. The caution of court-appointed experts. Court-ordered technical assessments tend to settle on average, rarely generous positions. It is a systemic effect: the professional panels often feature the same names who, in other contexts, work for the insurers.

What to do, then

None of this means resignation. It means recognising that assessing an insurer’s offer today requires more caution and more expertise than in the past. A preliminary consultation with a lawyer, before signing the release, is often decisive in understanding whether the offer is genuinely fair or whether there is room — in the light of recent case law, of the available documentation, of the correct personalisation of the damage — to obtain more.

For over twenty years I also worked on the other side, as trusted counsel for insurance companies. I know from the inside the criteria by which a file is assessed, the logic behind an offer, the real margins of negotiation, the points where the claimant is expected to give way. It is a wealth of experience that I now put at the service of the opposite side — the side of those who have suffered the loss.

One concrete, recent example: in proceedings before the Court of Appeal of Trento — a claim for the loss of a close relative in a fatal accident — I obtained for my clients compensation nearly three times the insurer’s initial offer. Cases like this confirm that, when the claim is framed correctly from the start and one is prepared to see the litigation through, the space for truly adequate compensation still exists.

The real issue today is not only how much to claim, but how to claim it: with what arguments, what timing, what strategy — and with what knowledge of the adversary.