Negotiations

Here are a couple of useful tips for subscribers to our Settle It Yourself Newsletter. In this section, we will discuss just two of the options that you have in response to the personal injury insurance adjuster's treatment of your injury claim (the "bad faith" issue) and to his final settlement offer. By the way, the response to the first settlement offer should usually be to transmit additional information. On this site, we tell members by all means to follow up promptly with their "Second Salvo" letter. (For help with Second Salvo letters, click here to subscribe,

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"Bad Faith" Personal Injury Adjuster Insurance Claim? Don't Even Threaten It!

It is a popular suggestion heard about these days that if an insurance company does not treat a claimant "right", they can be sued for "bad faith". What does that mean? It means that they may have stepped over the line on delay or threats or misinformation, or failure to get back with you on a demand letter or on an inquiry.

If you suspect that the adjuster might have been abusing fair dealing laws, click here to contact your state's insurance commissioner,

. Many times there is a set of regulations issued by your state's Insurance Commissioner. Make the call to your commissioner, because there is often someone who can answer the question about that very issue which has caused you some heartburn.

But sometimes there is no law or regulation by which to gauge the performance of a carrier. Instead, the claimant has to go on case law, which is less precise, but gives general principles for resolution of insurance claims.

The basic tenants of claims adjusting are fair dealing and good faith. How those principles translate into practical rules is the difficult part. But suffice to say, it takes more than just adversarial positioning on the part of the adjuster to cause a breach. Behavior would have to be pretty horrifying to qualify, and much of what is stated to be "bad faith" does not qualify.

If you do have behavior (or lack of it-just "sitting" on your claim), you can find a way to say IN WRITING that you believe this behavior is inappropriate and ask them to rectify the situation. This gives you the basis of being up-front and well-documented should you have to make a bad faith threat or claim later.

But during the initial stages of resolving differences between you and the personal injury insurance adjuster, we most strongly caution against threatening a personal injury insurance adjuster with a bad faith complaint. We do not think he is going to be influenced in the slightest to be more receptive to your position. Just the opposite: he will become more entrenched in his position. And what will you have accomplished by your threats? Nothing positive; instead, you will have made it more difficult to achieve your desired result without an attorney.

If you think you have the elements of bad faith in the handling of your claim, we suggest that before you ever make any threat to your adjuster you should contact your insurance commissioner and discuss the situation. If you are led to believe that you have suffered an abuse, then still do not go off threatening the adjuster, but instead hire an attorney for one hour to review the matter. Remember that your local bar association likely has a lawyer referral number where you can obtain an hour appointment for a very low cost. The attorney will be able to discern bad faith, and even if it did not occur in this one instance, he can write a letter to the carrier that will be treated with a lot more consideration that would be your idle threat to report the carrier to the insurance commissioner.

It is true that there are many thousands of instances of bad faith abuses perpetrated upon claimants (whether Pro Se or with an attorney) each year. But only a fraction of them are meritorious claims that can be brought to conclusion with a monetary award. And we would venture that none in that group were proceeding without an attorney. So do not threaten to bring a bad faith claim; let an attorney address that issue.

Further Response to the First Offer; "Nibbling" at the Close of
Negotiations of Your Personal Injury Claim Settlement

As we have noted in our newsletter and in our member's site,

, we suggest that you do not attempt too much response on the phone in that first conversation where the insurance adjuster makes his personal injury award offer. Instead, make your notes in a readable form and tell him you will get back to him with more information.

As soon as you hang up, review your notes so you understand what the adjuster stated as the reason(s) why he cannot meet your settlement demand. Then gather more information to send back to him with your counter-offer and await a phone call. In this second phone call he will make a counter-offer and you can make another offer. The case could settle at that time, EXCEPT there may be a couple little things you want in addition.

Remember, patience and persistence are keys to success in these negotiations. Also, try to give him some specific item of damages for which a receipt could be generated. Most adjusters would sooner have a list of bills to pay than add the same amount to your general damages award. Adjusters prefer special damages over general damages because they can document them in the file and thereby support the payment a lot easier than just blindly adding to the pain and suffering award.

Here is how to get one or two little "nibbles" for extras once you have basically agreed to a settlement. NOTE: this is not done as a first counter-offer; these suggestions are for use AFTER you have achieved a good settlement counter-offer from the insurance adjuster. So-and again, use this only where you are already happy with his "final" offer-what you will do is to invite his attention to the fact you are willing to accept his amount, ON CONDITION that he do or pay something you are asking for. Here are some examples:

To get another little bit of money. After agreeing in a "ballpark manner" to what feels like his last and final offer, you could then "nibble" by adding some little amount to the total award he is proposing. For example, if your ballpark agreed amount is less than $5,000, then you should add $100; if his offer is between $5,000 and $10,000, then add $200; if his offer is between $10,000 and $15,000, then add $400; if his offer is less than $20,000, then add $500, ON CONDITION he will recommend acceptance of this, YOUR final offer.
What if some of your medical bills remain outstanding? Let's say that your insurance quit paying medical bills three months ago, leaving you owing some amount. MAKE THE PHONE CALLS to doctors' offices BEFORE you communicate the final offer and prepare a list of the bills you do owe. Send the list to the adjuster and tell him you need these bills paid in addition to the total amount you have last discussed.
Payment of future medical care. Or, perhaps, you may compromise on your request for $5,000 in future medical care and instead tell him you would take just $1,000 in future care on condition the case is settled as you and he had otherwise agreed.