Negotiating a Personal Injury Claim
Whether your personal injury claim is from a car accident, slip and fall, or something else, when you report the claim to an insurance company, they will assign a claims adjuster to review the claim. Adjusters are different from insurance agents. While agents sell and maintain your insurance policy, they do not handle your claim. Some people may report their accident or personal injury claim to their agent. However, the agent will report the claim to the insurance company and an adjuster will be assigned to take over the claim.
The “Authority” of a Claims Adjuster to Settle
An adjuster’s “authority” to settle a personal injury claim is restricted to certain dollar limits and each adjuster has an authority limit. Authority is the maximum amount of money they are allowed to offer on any one claim. The limits depend on how experienced the adjuster is. New adjusters are typically given very little authority, for example $5,000. All cases assigned to this adjuster are going to be estimated by the claims department at under this authority amount.
Most claims adjusters will never tell you how much their “authority” actually is. However, adjusters will often refer to their “authority” during settlement negotiations to try to convince you that their offer is the best offer you can possibly get. Almost certainly, this is not the real amount of their authority and the adjuster is very likely bluffing. Floating an “authority” amount is a tactic used by many claims adjusters to get you to settle for less than your claim is worth.
Do Not Let Your Personal Injury Claim Stall
Many personal injury claimants, and even their attorneys, make the mistake of allowing settlement negotiations to stall. By holding on to your settlement money, the insurance company is essentially earning interest on the compensation to which you are entitled. It is important to take a proactive role in bringing your claim to a close and securing a favorable settlement offer.
Even though you cannot make a counteroffer until you receive an initial settlement offer from the claims adjuster, you should call the claims adjuster regularly until they make an offer. If you receive a verbal settlement offer over the phone, be sure to ask the claims adjuster to put the offer in writing and send it to you. You need to know exactly how the claims adjuster has arrived at their initial settlement figure, so that you can address each point in your counteroffer.
The Initial Settlement Offer
Do not be surprised if the initial settlement offer is a low figure. There are many reasons why you might receive a “lowball” offer. The claims adjuster may have concluded that you are partially at fault for your injuries, or that your injuries were not serious enough to justify the amount of damages you have demanded. The adjuster may also have concerns about the severity of your pain and suffering.
Although many claimants become upset or angry when this happens, consider it a test from the adjuster. The insurance company has nothing to lose and everything to gain by making lowball settlement offers. Insurance companies know most people struggle financially after an accident and are desperate to jump at the first settlement offer that comes their way. Even though it may be difficult to pass up a settlement offer, you should not accept the initial offer. Of course, like everything in life, there are exceptions, and it is possible the initial offer is actually fair, so this is not a hard and fast rule.
Either way, you should not panic over a low settlement offer. Remember, the insurance company is running a business and must maintain its profits. The claims adjuster hopes, but does not expect, you to accept the first offer. As soon as you receive the initial settlement offer in writing, carefully evaluate the stated reasons for the low settlement amount.
Rejecting a Settlement Offer and Making a Counteroffer
In order to reject the initial settlement offer, you should respond to each of the points made by the claims adjuster in a written counteroffer. In this letter, you will reassert your position, which was carefully described in your demand letter. Never personally attack the claims adjuster, doing so will not advance your cause. Instead, be professional yet firm in explaining why you deserve more money for your injuries and other losses.
Your counteroffer letter should state that you do not find the initial settlement offer acceptable, it should list the reasons why you deserve a higher settlement offer, and it should include a demand for a higher settlement offer. To show the insurance company will know you are willing to reach a compromise, the amount of your counteroffer should be slightly lower than the one you included in your demand letter. However, be careful not to reduce your settlement demand by too much. Otherwise, the claims adjuster may immediately accept your offer and refuse to negotiate further.
The Insurance Company’s Final Offer to Settle Your Personal Injury Claim
To determine whether this is indeed the final offer, you should directly ask the adjuster. If it is the final offer, you must make a decision whether you will accept or reject the final offer. If you decide to reject the final offer then your only option to obtain more compensation is to file a lawsuit.