You’ve taken the time to craft a thorough, well-organized, well-documented demand letter. You used every possible resource to make your claim as strong as it can be. So what happens when the insurance adjuster receives your letter, reads through it, and calls you to begin negotiating a settlement?
Negotiating a personal injury settlement isn’t quite the same as haggling at a yard sale or bargaining with a car dealership salesperson. While some of the same negotiating techniques work, others fall flat in this context. Going into negotiations unprepared could mean leaving hundreds or thousands of dollars on the table. To get your insurance adjuster’s respect and full attention, you have to show that you know what you’re doing. Before your negotiations begin, arm yourself with these tips for success. Read on to learn the real secret to negotiating a settlement.
1) Don’t Speak First
The insurance adjuster will likely ask you – in more complex terminology, of course – how much you want. Most people without legal experience will blurt out a number. That’s exactly what the insurance adjuster wants you to do. From there, the adjuster will certainly negotiate down. Suddenly the number you were willing to accept is cut in half, and the adjuster is telling you that they really can’t go any higher. It’s this amount or nothing.
A little-known secret is that attorneys, like us, never want to be the first one to throw out a number. Just as you didn’t include a number in your demand package, don’t volunteer one to the adjuster, your opponent in the bargaining game. When asked, remind the adjuster that it’s his or her job to evaluate the case, and ask them what they think your claim is worth.
2) Go into Negotiations Knowing What You Want
Remember all that time you spent considering claim value? You might have been surprised that after calculating the value of your claim, and particularly your non-economic damages like pain and suffering, you never had the opportunity to include it in your demand letter.
Though the insurance company will only respect losses that you can document, the adjuster is a human being. He or she knows that you have non-economic losses, and that they warrant compensation, even though it’s in the insurance company’s best interests not to compensate you fully. The medical narrative you included in your demand letter painted a picture of how much pain and suffering you experienced. The adjuster got to see how many uncomfortable or downright painful medical tests and procedures you had to undergo and how long your injuries caused you substantial enough pain to require a doctor’s care. If you needed physical therapy, he or she was able to understand that your injuries impaired your physical abilities. Any prescription medications, like painkillers, illustrate the seriousness of your discomfort to the adjuster.
Both you and the insurance adjuster know that the value of your claim exceeds the amount of your economic damages. That’s why it’s always helpful to go into negotiations with that complete claim value in mind. Your insurance adjuster will never offer you more money than you ask for, so keep your calculations in mind as you negotiate, and always start high.
Suppose the insurance adjuster working on your claim won’t budge on the issue of naming a number first. You’re at a stalemate, and that’s not helping your case. If you wait too long and end up approaching the statute of limitations, you’ll have to file a lawsuit or end up with nothing. Lawsuits are so expensive to succeed in that you’d have to spend your personal money to handle one yourself, not to mention they’re so much more complicated than claims that you really do need a lawyer. (And if you’re too close to statute, no lawyer will want to take your case, anyway, because there simply won’t be adequate time to prepare.)
If you do have to throw out a number first, think back to that claim value amount you calculated. Make sure you included every economic and non-economic loss when figuring out that number. Of course we’d all rather get more money than less money, but is the number you calculated something that you will realistically be happy with?
If so, multiply it by two – or more. Then use this number to open the negotiations.
3) Always Ask for More Than You Want
A basic rule of all negotiations is to start higher (or lower) than the amount you really want to pay. Think about the process of buying a car. You are trying to get the best deal, so you start by naming a price lower than you really expect to have to pay. The salesperson counters with an offer higher than the price you named (and then he or she expects to get), but lower than any price he or she had previously stated.
As you go back-and-forth, you approach a middle ground. The basic idea stays the same, but the roles shift slightly in the personal injury scenario. Instead of seeking the lowest-priced deal, you’re looking for the highest-value settlement.
4) Adjust Your Haggling Strategy
A major difference between your personal injury claim and a car sales situation is that your options are limited. If you don’t like a salesperson’s attitude or the deal they are trying to get you to accept, there is always another car dealership for you to visit. You’re not locked into doing business with this person, and he or she knows it – which might make the salesperson more willing to cooperate with you and negotiate fairly. In a personal injury claim, you don’t have such freedom. If your preferred bargaining strategy hinges on threatening to take your business elsewhere, this negotiation will force you out of your comfort zone.
5) Never Reveal Your Bottom Line
Remember when we said earlier that the insurance adjuster is your adversary? Now you finally get to see that relationship in action. If you’re naturally a very straight-to-the-point person who doesn’t like playing the game of negotiating, you may be tempted to tell the insurance adjuster simply, “this is my bottom line.”
Don’t do it.
Though you’re not in the same physical space, you and the insurance adjuster are on opposite sides of the bargaining table. Sure, the adjuster might seem like they feel the same way about the process. Just as he or she did at the start of your claim, the adjuster is again trying to gain your trust. If the adjuster didn’t like negotiating – or, more importantly, wasn’t good at doing it for the benefit of the insurance company – he or she would find a different line of work.
So don’t let your guard down just because the insurance adjuster tells you that the company would like to resolve the claim as quickly as possible and that giving them your bottom-line number will speed up the process. It’s just one more trick. From your lowest acceptable number, the adjuster will continue negotiating down. It’s too late to change your mind and up the amount of money you’d accept. You’ve already given up your leverage.
6) Keep Policy Limits in Mind
There’s one other way that settling a personal injury claim differs substantially from haggling over a car: policy limits. An insurance policy has fixed coverage limits. The company can’t offer you a settlement that exceeds the limits of the policy. Just about every other good or service you could negotiate a price on has a price range that most people would consider reasonable and another price range for which you shouldn’t realistically expect to obtain it. However, these price ranges aren’t set in stone the way that an insurance policy’s coverage limits are.
Have you ever negotiated with someone who claimed, “I’m taking a loss on this”? You won’t run into that with the insurance company. Your settlement can’t exceed the amount of coverage available.
What happens if you don’t know the policy limits? The early stages of negotiations are a good chance to find out. If you asked for the entire policy limit in your demand letter, there’s a good chance the insurance company will deny you that amount of money. Find out why. If the policy limit is a high one, and higher than you can reasonably expect to recover for your damages, you might be able to use this knowledge to choose a more reasonable starting point and shorten your negotiations.
If, on the other hand, you name an actual number either in your demand letter or your negotiations, the adjuster might tell you that there is “insufficient coverage” to pay you that amount. Find out why.
If the adjuster tries to evade the question, be persistent. You want this information. Knowing the policy limits can prevent you from wasting your time trying to get a better settlement than you’re really able to get. In a motor vehicle accident claim, it could allow you to start pursuing a claim through any underinsured motorist coverage you purchased through your own insurance company. If the policy limit is on the lower end and your injuries clearly are worth more, you may be able to demand the full policy limit now (if you didn’t do so earlier) without running into much opposition from the insurance adjuster.
7) Know Your Strengths (and Use Them!)
You want to approach any negotiation from a position of strength. While the insurance adjuster certainly has power, because he or she is the gatekeeper standing between you and the money you deserve, you also have strengths. You know your claim better than anyone else possibly could. You experienced the accident firsthand, and you have lived with the consequences every day since. You have put in considerable time and effort to research liability, gather evidence, and create a compelling demand. So keep in mind the strengths of your claim.
If you need to, write down these points on a notecard, and keep it handy anytime you talk with the insurance adjuster. Was the policyholder obviously in direct violation of a law when he or she caused the accident? Is there a potential that your injuries could cause you future problems? Whenever the insurance adjuster offers a settlement that you feel is less than you deserve, tell him or her why. Remind the adjuster how significant the impact has been on your life, and of any factors that you believe should increase the value of your claim. Your substantial damages are worth more than the adjuster’s low-ball offer. Don’t be afraid to say so!
Just as you are aware of your strengths, be aware of any weaknesses in your claim, too. You don’t have to (and shouldn’t) bring them up, but you should be prepared for the possibility that the insurance adjuster will.
8) The Real Secret to Negotiating a Settlement
Unfortunately, there are no magic words to get adjusters to cooperate. The only real secret to the negotiating game is that it’s all about respect. Unfortunately, adjusters often lack respect for claimants who pursue a case without professional legal help. They may think that your lack of experience in personal injury law will make you an easy target for them to take advantage of.
Personal injury law can be overwhelming for newcomers, and that’s what the insurance company is counting on. An insurance adjuster may try to decrease the value of your claim by tricking you in ways he or she wouldn’t dare attempt to do if an attorney was on your side. It’s not fair, but unfortunately, it does happen.
Suppose, for example, that the adjuster tries to tell you that you are partially at fault for the accident, so you can’t recover any compensation. Because you’ve done your homework, you can demonstrate the ways in which the other party was at fault. Even if your actions did contribute to the accident, you know that laws governing comparative negligence in New Jersey or Pennsylvania allow you to recover compensation as long as you were less than half at fault.
By responding to the adjuster with evidence, as an attorney would, you can earn his or her respect. Adjusters are only human. Some of them hate interacting with unrepresented claimants, even though they get stuck paying out more money to those with lawyers, specifically because the claimant is uninformed about the legal process. If you make their job easier for them by providing complete, well-organized documentation of the damages you’re seeking compensation for – as you already did in your demand package – they are more likely to work with you rather than treat you like a headache they don’t have the time or energy to deal with. Proving that you know your stuff is the most reliable way to get adjusters to respect you.
At Console and Associates P.C., we have 25 years of experience working with insurance adjusters. If you’re considering filing a personal injury claim, give our experienced attorneys a call. The consultation is always free, and if we handle your claim, you’ll pay us nothing until we win with our No Fee Promise.
Of course, it’s possible to handle your claim on your own. Getting an insurance adjuster to respect you might seem like a daunting task, but it’s still possible.
Whether you’re a natural haggler or the notion of bargaining makes you break out into a cold sweat, you can negotiate with an insurance adjuster. All along during the process of building your case, you’ve also been building the skills you need to negotiate a settlement. You’ve spent time learning the law and finding evidence to support your claims, just like an attorney would. You’ve certainly had to be persistent throughout this whole process, and that persistence will help you stand up for yourself during negotiations.
Hopefully, your hard work thus far will be enough to help you get the settlement you deserve. You can wrap up your claim and move on with your life. If the insurance adjuster assigned to your claim refuses to cooperate reasonably despite your best efforts, though, it may be time to pass your case off to a professional. Check back soon for the next installment of How to Handle Your Own Personal Injury Claim to learn about the process – and hazards – of wrapping up your claim.