Properly Negotiating with an Insurance Company
After a claim, whether it is a personal injury or auto accident or even a malpractice claim, you will have to submit a demand letter to the insurance company. Once that step has been completed, it’s time to gear up for negotiations. Ideally, you will have a legal team on your side for negotiations. Even if you do have a lawyer, it’s important to understand what goes into a negotiation to be best prepared for how things will proceed.
The Negotiation Process
The first call is always the hardest in any negotiations. The adjuster will discuss the strengths and weaknesses of the claim and offer a settlement for an amount lower than the demand letter. At that point, a counter offer will be made that is higher than the adjuster’s amount but lower than the demand letter. Due to this, it’s important to have a high enough number in the original demand to lower during negotiations. On average, it takes two or three phone calls to reach a figure that is between the two offers.
A reservation of rights letter will come after the negotiations have begun. This letter simply protects the insurance company from the claimant saying the insurance policy covers the accident because negotiations began. The letter isn’t meant to trick the claimant but rather protects the insurance company from having to pay out a settlement before agreements are made.
Know Your Settlement Amount Ahead
As mentioned, the original demand letter should have an amount that is higher than what you expect to receive. To have that amount, you must first determine the lowest settlement you are willing to take. This should be based on your own information and should not be revealed to the adjuster at any point. Of course, you don’t have to stick with this figure. If the adjuster makes points that lower the figure that you didn’t consider, lowering the figure could benefit your claim in the long run.
Don’t Accept the First Offer
Just as you are high-balling your offer to get more money, the adjuster’s job is to low-ball the first offer to try to pay out less. This is also done to see if you know what you are doing, or may be a somewhat reasonable offer but is lower than what you will accept. If it does seem reasonable, immediately make a counteroffer that is lower than your demand but a bit higher than the offer. This will show you are trying to be reasonable and could get to a quicker final settlement.
Ask for Justification
If you get a very low offer, ask the adjuster how they got to the offer. Rather than making a counteroffer, asking for a justification can reveal if they are using a tactic to get you down lower. Be sure to take notes on the reasoning. At this point, write a brief letter responding to the points. This will act as an unofficial secondary demand letter. You can lower the demand by a bit but it is advised not to lower too far to see if they adjuster will budge on the amount.
In the next phone call, ask for a reply to your letter. At this point, you should receive a more reasonable offer that is easier to bargain with and arrive at a reasonable offer. However, this won’t always work. In some cases, the adjuster will try to continually wear down your offer. Having a well-seasoned lawyer on your side can help. If you are entering negotiations of an offer from an insurance company and feel you are being unfairly treated, contact our team at Jonathan Perkins Injury Lawyers today.