The Almighty Underwriter

The Role of the Underwriter

Underwriters play a vital role in making legal funding work. They work behind the scenes to carefully analyze and assess legal cases. This careful examination includes determining the value of the case, the potential recovery amount, and the risk of financing the case. Legal funding underwriters have a deep understanding of different types of cases, how courts operate, and how much lawsuit loans might be worth. Their job is also to protect both the funding company and you, the customer. Without their crucial role, companies would not be able to provide safe, responsible financial solutions through pre-settlement funding.

How Does It All Work?

Why is it important that an underwriter evaluate a case? Well, for one, attorneys are biased. No attorney takes a case they know will lose. It would be a waste of time and sometimes money. If someone were to ask an attorney, “How much is this case worth?” their answer could be higher than is reasonable. Some attorneys see cases with rose-colored glasses. They only consider the good aspects (bad injuries, a big insurance policy) and will discount or ignore the bad (four prior accidents, an unclear police report regarding who caused the accident).

So underwriters can’t just rely on an attorney’s word. That’s why many underwriters are attorneys. They are basically doing the attorney’s job, at least as far as estimating the case value. While underwriters vary from company to company, in general, here’s how they operate:

1) They read the application to get an overview of the case

They’ll see how old the plaintiff is, the plaintiff’s account of what happened in the accident, what the injuries are, and what state the client lives in. This provides a framework for them to start working.

2) They’ll review the documents received

This includes everything from medical records (showing your injury) to liability documents proving who caused the accident (in the form of a police report, incident report, or witness statements), insurance documents (so they know how much money is available to pay out), and court documents (to show what has happened so far in the lawsuit). From this, some underwriters can estimate your case’s value based on the documents alone.

3) Other times, underwriters may have additional questions

This depends on the underwriter’s personality, the company’s guidelines, and how complex the case is. Some companies are quicker at obtaining information than others. For instance, Uplift Legal Funding’s team of underwriters can often make a decision without having a long back-and-forth with the attorney. This greatly speeds up getting you an answer.

4) Some underwriters make a recommendation as to the rate and fees that should be charged

This is based on how risky the funding is. Not every case is a slam dunk. Some require the company to take a leap of faith. However, this varies by company.

Summing Up:

All in all, the underwriting process, which is the most important step in determining if a funder can provide money, can take anywhere from hours to days. One of Uplift’s greatest strengths is its speed.

If your case is denied, does that mean the underwriter thinks your case is worthless? No, not at all. There are many reasons an underwriter or funding company could deny a case. Here are some possible scenarios:

The case is a fifty-fifty case

It may settle, and if it does, it could be for HUGE dollars, but it could also fail. Some companies are more comfortable putting out big bucks on a coin flip than others.

The case has value and will almost certainly settle, but there are some liens already on the file

Liens don’t mean a funder won’t fund, but if the underwriter thinks your case might settle for $100,000 and there are $40,000 in liens that have to be paid to medical providers, they might deny funding to make sure you get a nice settlement when the suit wraps up.

The case could take too long

Because most funders work on a rate that compounds over time, the longer a case takes, the more you will have to pay back. Sometimes a case is a gold mine, but it could take four years to settle. Funding that case now would cause the plaintiff to pay too much at the end. In this scenario, a good company would tell you to check back after the case moves further along.

Not enough information is known

Sometimes a case could be great, but not enough information is known. For instance, even if the injury is severe and liability is clear, it doesn’t matter if there is no confirmation of an insurance policy. If there’s no guarantee that money is available to pay, there is no reason to fund. The solution here is the same: just give it some time.

Overall, the underwriter is an essential piece of the approval puzzle. If your case is strong and the underwriter is good at their job, it could mean getting money in your pocket in as little as a few days.