Negotiating a final settlement of a personal injury claim is a little like bargaining to buy something at an outdoor market where haggling is commonplace. You and the buyer (the insurance adjuster) both know roughly how much an item (your damages) is worth. You know how much you are willing to take for it, and the adjuster knows how much the insurance company is willing to pay. But neither of you knows how much the other side is willing to pay or receive. So you go through a process of testing each other, a dance of bluff and bluster that goes like this, usually in just two or three phone calls:
• You ask for a high amount in your written demand letter.
• The insurance adjuster tells you what’s wrong with your claim -- that there is a question about liability, or that your lengthy physical therapy was unnecessary.
• You respond to these arguments.
• The adjuster makes a low counteroffer to feel out whether you are in a hurry to take any settlement amount.
• You concede a little bit concerning the adjuster’s arguments and make another demand slightly lower than the one in your demand letter.
• The insurance adjuster increases the company’s offer.
• You either accept that amount or make another counter-demand.
It is usually as simple as that. The main facts determining how an accident settlement comes out are how well you have prepared all stages of your claim -- investigation, supporting documents, and demand letter -- how much you are willing to settle for, and how much of a hurry you are in to settle.
During negotiations, an insurance adjuster has a right to ask questions and dispute facts in an attempt to limit your right to compensation. Questions or disputes might concern:
Coverage. Whether the insurance policy in question actually covers the accident.
Liability. Who was at fault for the accident and what was the degree of your comparative negligence.
The extent of your injuries. Whether an injury was disabling or had a long-term permanent effect.
The nature and extent of medical treatment. Whether the type and duration of procedures or therapies were medically necessary, and whether you had preexisting problems that contributed to your damages.
You should meet an adjuster’s reasonable questions and inquiries with reasonable answers. But some questions and arguments are not legitimate—and are intended unfairly to influence you to settle the case for less than it is truly worth.
How you act during settlement negotiations can go a long way toward making the process run smoothly and quickly, with a minimum of stress or aggravation for you, and with a satisfying settlement as the result. Here are some of the basic rules about dealing with a claims adjuster. (For more, check out Tips for Negotiating with an Insurance Company.)
Be organized. If you have a conversation with the adjuster, make a note of what was said. If either you or the adjuster have said that you will or will not do a certain thing, or that something is to occur by a certain date, write a confirming letter and send it to the adjuster. Keep a copy of everything you send. If you have agreed to provide the adjuster with information, do it promptly.
Be patient. Although you may have already had to wait a considerable amount of time to get all your medical and income records, try not to be in too great a hurry to settle your claim. One of the tactics claims adjusters use is to make a low initial settlement offer and see if you are too impatient to continue negotiating. If you can stand to wait, do not jump at a first offer. Holding off for a little while often increases your settlement amount. After some time passes, it will be the adjuster who will want to settle your claim as soon as possible, and then you will be able to get the full value of your claim.
Be persistent. The flip side of being patient is being persistent. Don’t let the adjuster sit on your claim. If the adjuster has said that he or she will do something -- make you another offer, or check with a supervisor -- get a specific date by which it will be done. Put everything agreed upon in a confirming letter, and when that date rolls around, call and politely demand a response. If you have asked for information or for a new settlement offer, set a reasonable deadline by which you would like the response. Don’t pester an adjuster by calling every day, but make sure the adjuster knows you are out there and that you will be regularly and thoroughly following up on your claim.
Be calm and straightforward. Insurance adjusters are overworked and underpaid, and they hear a lot of stories every day. They are also human, which means they don’t respond well to abuse or to hysterics. Even if you get an inconsiderate or unsympathetic adjuster, keep your cool and don’t get into a personal battle. Your job is simply to show the adjuster that you know how the process works and that your claim is an honest one. Let the adjuster know you believe in the facts you have presented. Avoid high emotions. If you show the adjuster you are making a good-faith claim, you will likely get a good-faith settlement offer in return.
For more details on negotiating an insurance claim, including sample letters to insurance companies, suggestions for handling negotiations, and strategies for dealing with an insurance company that refuses to make a good offer, see How to Win Your Personal Injury Claim, by Joseph L. Matthews (Nolo).