What Insurance Companies Don’t Want the Jury to Know: The Hidden Realities of Civil Trials

When individuals find themselves serving as jurors in a civil trial, they are tasked with determining the facts of the case and rendering a verdict that can profoundly affect the lives of the parties involved. However, jurors are often unaware that certain key pieces of information—critical to understanding the larger context of the dispute—are intentionally withheld from them. The trial process is governed by strict rules of evidence, and while these rules serve important legal purposes, they also create a veil of secrecy that can significantly shape the jury's perception of the case.

One of the most significant omissions during a trial is any mention of whether the defendant has liability insurance. In this blog post, we’ll explore why this information is excluded, how it affects the fairness of trials, and the broader implications for both plaintiffs and defendants. We’ll also examine related issues, such as the prohibition on discussing settlement negotiations during trial, and how these omissions empower insurance companies while leaving jurors in the dark. By the end, you’ll have a deeper understanding of the unseen dynamics at play in civil trials, especially in personal injury cases.

The Elephant in the Room: Insurance Coverage

One of the most tightly guarded secrets in civil trials is whether the defendant has liability insurance. The court rules explicitly prohibit attorneys from informing the jury about the existence of insurance coverage, let alone the policy limits. The reasoning behind this rule is that jurors might be influenced by this information, potentially leading to a larger verdict if they believe an insurance company will foot the bill rather than the defendant personally. While this concern may seem reasonable in theory, it often leads to an unfair distortion of the facts.

The Reality of Insurance in Personal Injury Cases

In almost every personal injury case that goes to trial, the defendant is insured. Plaintiffs’ attorneys typically operate on a contingency fee basis, meaning they only get paid if their client recovers money. These attorneys carefully evaluate cases before taking them on, and they are unlikely to pursue litigation against a defendant who lacks the financial resources to pay a judgment. Without insurance, the vast majority of individuals would not have the assets or income necessary to compensate someone for serious injuries.

In Utah, for example, drivers are required by law to carry automobile liability insurance. As part of the discovery process, insurance companies are required to disclose whether the defendant is insured and the policy limits of their coverage. This ensures that the attorneys for both sides are fully aware of the financial resources available to resolve the claim, even though jurors are kept in the dark.

It’s a good rule of thumb: if a case has gone all the way to trial, the defendant almost certainly has insurance. Otherwise, it simply wouldn’t be worth the time, energy, and expense for either party to litigate the matter.

Why Jurors Aren’t Told About Insurance

The exclusion of insurance information is rooted in the idea that it might prejudice the jury against the defendant. The concern is that jurors might be more inclined to award substantial damages if they know an insurance company—not the individual defendant—will pay. However, this rationale ignores the reality that failing to disclose this information creates its own set of biases.

When jurors are left to assume that the defendant might personally bear the financial burden of a large judgment, they may be more hesitant to award full compensation to the injured plaintiff. This can result in verdicts that do not adequately address the plaintiff’s injuries and financial losses, leaving the plaintiff undercompensated while the insurance company escapes its full financial responsibility. This secrecy benefits the insurance industry at the expense of injured individuals who have done nothing wrong.

Settlement Negotiations: Another Hidden Fact

Another key piece of information jurors never hear is whether the parties attempted to settle the case before trial. The vast majority of civil cases are resolved through settlements rather than trials, and for good reason. Trials are inherently uncertain, time-consuming, and expensive for both sides. Plaintiffs typically prefer to settle because it provides them with a guaranteed recovery without the risk of receiving nothing if the jury rules against them. Defendants, or more accurately their insurance companies, often have the same motivation to settle, as it avoids the costs of litigation and the possibility of an unfavorable verdict.

The Role of Insurance Companies in Settlement Decisions

What jurors don’t know is that in almost every personal injury case, the plaintiff has made at least one attempt to settle before trial. Settlement negotiations are a standard part of the litigation process, and plaintiffs’ attorneys are incentivized to resolve cases quickly and fairly. If a case proceeds to trial, it’s typically because the defendant’s insurance company has refused to offer an amount the plaintiff considers reasonable.

It’s important to understand that defendants themselves often have limited control over whether their insurance company settles the case. Insurance companies are profit-driven entities, and they make settlement decisions based on their bottom line. They are often willing to gamble with the time, energy, and privacy of their insureds in order to avoid paying claims. However, policyholders have rights too. If a defendant strongly prefers to settle, they can and should demand that their insurance company resolve the claim. Doing so can spare them the stress of depositions, trial testimony, and the intrusion into their personal lives that comes with litigation.

Why Full Compensation Matters

When jurors award full compensation to injured plaintiffs, it sends a powerful message to insurance companies. Large verdicts incentivize insurers to settle cases fairly and promptly in the future, avoiding the time and expense of trial. Conversely, when juries undercompensate plaintiffs—often because they are unaware of the role insurance plays—it reinforces the insurance industry’s strategy of delaying and denying claims.

Insurance companies rely on a simple calculation: if they can minimize payouts by dragging cases out and forcing plaintiffs to trial, they come out ahead financially. This approach is not only unfair to plaintiffs but also wastes valuable court resources. By awarding fair and full compensation, juries can help shift the balance of power and ensure that insurance companies fulfill their obligations to policyholders and injured individuals.

The Importance of Holding Insurance Companies Accountable

Defendants often pay insurance premiums for years, believing they will be protected in the event of a lawsuit. However, when a claim arises, many policyholders find themselves at odds with their own insurance company. The insurer’s primary loyalty is to its shareholders, not its policyholders, and this conflict of interest often leads to unnecessary litigation.

Policyholders should not hesitate to push their insurance company to settle cases before trial or depositions. The coverage they paid for is meant to provide peace of mind and financial protection, not to subject them to the stress and uncertainty of litigation. Insurance companies have a duty to act in good faith, and policyholders have every right to demand that their insurer upholds this obligation.

Conclusion: What Jurors Can’t Know, but Should

Jurors play a crucial role in our civil justice system, but the information withheld from them creates an uneven playing field that often benefits insurance companies at the expense of injured plaintiffs and their own policyholders. By understanding the realities of insurance coverage, settlement negotiations, and the motivations of both plaintiffs and defendants, we can better appreciate the hidden dynamics that shape civil trials.

While jurors are not allowed to hear about insurance or settlement offers, the parties and their attorneys are well aware of these facts. If jurors were fully informed, they might view the cases before them in a very different light. In the end, the secrecy surrounding insurance and settlement discussions serves only to shield insurance companies from accountability while leaving injured plaintiffs undercompensated and defendants burdened by unnecessary litigation.

If you’re ever called to serve on a jury, remember: what you’re not told is just as important as what you are. And if you’re a plaintiff or defendant in a personal injury case, know that you have rights—and that your voice matters in holding insurance companies accountable.

At The Legal Beagle, we believe in empowering our clients with knowledge and fighting tirelessly to ensure they receive the compensation they deserve. The litigation process can be overwhelming. That’s why it’s essential to have an experienced legal advocate who understands these hidden dynamics and can present a compelling case on your behalf. If you’ve been injured due to someone else’s negligence, don’t wait—call The Legal Beagle today. Our team will evaluate your case, explain your rights, and fight to hold the responsible parties accountable. Let us help you seek the justice and compensation you deserve.