Learn how to make the most of your injury claim settlement
Once the claim settlement negotiation process begins, many deviate from the strategy they planned to follow. Others have no strategy at all! Following these six claim settlement tips is an excellent starting point for many who wish to attempt settlement of an injury claim.
1. Know what claim settlement value you are seeking
Lawyers do not enter settlement negotiations without having a good handle on what they are seeking. A settlement demand letter (or settlement proposal) is crafted by a lawyer and provided to the insurance company. The demand letter explains two main points: 1. Why the injured person is legally entitled to compensation, and 2. How much compensation the injured person is entitled to. The first issue (fault) is straight forward to the injured person. The second issue, however, may be less straight forward. Consider your injuries, your prognosis, and the impact the injuries have had on your life thus far. While the demand letter serves as a formal position advanced by the injured person, the insurance company has already done its own work to value the claim. Given this, it is vital that you determine the value of your claim fairly early on during the claim, and present a clear position to the insurance company- be it the adjuster on the phone or a lawyer working for the insurance company who may become involved in the case as time passes.
You don't need to tell the insurance company what you want to settle your case for until you're ready. You should, however, have some sense of the value and keep this number in mind. We suggest you develop a minimum settlement figure, a number which is the lowest amount that you could accept for your injury. We do not suggest that you reveal this bottom-line position to the insurance adjuster! Your lowest position is helpful to know and will help you assess what figure you should use as your first offer. Knowing (and sticking) with your lowest position will ensure that you don't snap up a bad offer in early settlement talks because it would be nice to have the claim over with and you can certainly find good ways to use the money. Many realize that the "take-it-or-leave-it" offer presented by the insurance company isn't their final position. The insurance company will commonly test the injured person's commitment to the case by throwing out a low settlement number. While it may be difficult, most people are wise to refuse the first offer if it is below an appropriately set lowest position.
Of course, one of the critical points to negotiation is to know how much your claim is worth. It is likely the case that you believe your claim is worth more than what the insurance company believes the claim is worth. You also don't want to lowball your claim because your lowest position will be too low, and your opening position may not be high enough. Whether you ask for it or not, the insurance adjuster will typically provide some context for their offer. The insurance adjuster may alert you to caselaw, facts which hurt your case, or other information which may lead you to reconsider your position. It may well be that you ought to review your position. We suggest listening to the insurance company and taking the time to reassess your beliefs about the case after the call. It may also happen that the insurance company's assessment of the case is more favourable than you initially realized. You may discover that there are facts in your favour that you didn't consider or law which supports a higher award of damages than you initially contemplated. We suggest that you listen closely to the insurance company as you may need to revise your minimum position.
2. Don't Jump at the First Offer
You may be asked to provide the first offer to the insurance adjuster. Making the first offer can be dangerous if you are not confident in your valuation of the case. It is wise to get the insurance company to make the first move. In most cases, the first move by the insurance company will be to offer a meager amount. In other cases, they may not make an offer because the insurance adjuster believes that their customer isn't responsible for the accident! Stay true to your assessment of the case. Your reply to the insurance adjuster will be a show of your commitment to the case and your understanding of your claims worth.
When the first offer is made, you are expected to reply with your acceptance or a counter offer. Your response should depend on whether the offer is fair but on the low-end of fair, or wholly unfair. If the offer is within the realm of reasonable, you are likely best to make a counteroffer that is on the high side of what you believe the range of fair is for your claim. If you have provided the first offer through a settlement demand and the insurance company has made the first counter offer, you should drop your position as a show of your interest in continued negotiation. Doing so shows the insurance adjuster that you are being reasonable and are willing to compromise. Don't be surprised if the insurance adjuster quickly replies with another offer (maybe even on the same call)! It may be that it only takes a few calls to come to a position you both think is fair for your injuries. It's not necessary to reiterate the facts of your case on each file. The insurance adjuster knows your case if they are willing to negotiate. The insurance adjuster will attempt to progress towards a settlement so long as they can justify their actions to their boss. While a full case regurgitation isn't needed, you are certainly able to emphasize the strong points in your favour. Some of the key points may be: their customer's complete blame for the accident, your significant injuries, and the major impact areas in your life.
3. Get the Adjuster to Justify Their Low Offer
If the adjuster makes a very low offer that is not reasonable for your claim, it may be a tactic to see whether you know what your offer is actually worth. The best defense to this situation is to ask the insurance adjuster to explain the basis for their position. Be sure to write down the reasons they provide. It may well be that they don't fully understand your injuries, or they believe that you contributed to the accident. While it will never help to argue on the phone with the insurance adjuster, it will usually do a world of good to write a short letter to the insurance adjuster replying to each reason the adjuster used to justify their offer. Your letter can accept some of the reasons provided by the insurance company. If so, be sure to recognize these concessions when making your next counter offer. If you disagree entirely with the reasons given by the insurance adjuster, be sure to provide information to support your position. We find that most people are well served by sending the letter and waiting for a reply before sending a new offer. Many treat the letter as a form of counter offer without an actual monetary drop in the negotiation.
Be sure to follow up with your adjuster on your next call. Confirm that he or she has received your letter. Ask for their opinion and whether they have reassessed your claim. If so, you can expect a new offer. If not, do your best to continue negotiations so long as you remain within your predetermined range of fair outcomes.
4. Emphasize Emotional Points in Your Favour
During negotiations, mention any emotional points supporting your claim. If, for example, you have sent the adjuster a particularly strong photo of a smashed car or a severe-looking injury, refer to it. If there was a bottle of beer found in the other party’s car, refer again to the possibility of alcohol use. If similar accidents had occurred in a similar way at that location, remind the adjuster. If your injury interfered with your ability to care for your child, mention that your child suffered as a result. Even though there is no way to put a dollar value on these factors, they can be very powerful in getting an insurance company to settle an accident claim.
5. Wait for a Reply to your Offer
If you've made an offer, stick with it until you get a reply offer from the adjuster. By reducing your offer without a reply it will signal that you're willing to reduce your offer even more. It's never good to negotiate against yourself!
Be sure to get the reason for reconsideration if the adjuster asks you to reassess your offer. You will be expected to explain the basis for your offer, be it the same or different than the amount first presented. You will quickly learn whether the insurance adjuster has another offer to provide, or if you have hit an impasse and no reasonable offer will be forthcoming. If the latter, you will need to apply more pressure on the insurance company before negotiations continue.
6. Know When to Get a Lawyer
There will be times where the injury victim simply can't get a reasonable offer from the insurance company. This is most often the case when injuries are unclear, or more significant. Larger claims may also be more challenging to settle at a reasonable number.
You need to know when you need help. We suggest you talk to a lawyer if you fall under any of these categories:
a) You are seeking the full Minor Injury Cap, or damages in excess of the Minor Injury Cap
The adjuster is simply less likely to take claims from unrepresented people as seriously. The loss of value may be more apparent when dealing with a larger claim for compensation.
b) You are seeking compensation for ongoing or future damages.
If you have ongoing medical costs or concern about losses which you may incur in the future, you may be wise to speak with a lawyer about the quantification of the losses. You are unable to reopen a settlement once it is settled - even if you happen to have more costs that you did not consider at the time.
c) There is a question about fault
Is there is any question about your statement of events? Perhaps the insurance adjuster suggested that you could have done something to avoid the accident or lessen the severity of the accident. If so, you should speak to a lawyer about the issue and get advice before responding to the adjuster.
7. Confirm the claim settlement in writing
Many cases will settle over the phone. We all know how easily miscommunications can happen over the phone. Be sure to send an email or fax to the insurance adjuster immediately after settling your claim to confirm the terms of the settlement agreement. The communication to the adjuster does not need to be a complicated document.