How to Negotiate an Insurance Settlement | 9 Insurance Negotiation Tips
We are going to share with you some insurance negotiation tips that our firm uses when training our attorneys and our case managers how to negotiate the maximum value in an insurance claim.
Here are nine negotiating tips that will help you settle your insurance claim for maximum value.
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Tip #1: Know What The Value Of Your Claim Is
Insurance negotiation tip number one is, know what the value of your claim is before you ever pick up the phone and talk to the insurance adjuster.
In our firm we want to determine two things:
- One is the settlement range of our case. We start by figuring out a low end and a high end of what we think the value of your case is going to be, we bracket it.
- The second is setting a bottom number. Whatever we do, we will not settle the case for anything less than that bottom number. The beauty of this is it sets your predefined goals. You know exactly where you’re going to be, and it keeps you from potentially going off the beaten path.
That’s not to say that there couldn’t be new facts that would emerge later that might increase your settlement range, or decrease your settlement range, but for purposes of your negotiation know what your framework is.
Tip #2: Prepare, Prepare, Prepare,
Insurance negotiation tip number two when trying to settle your claim is to prepare, prepare, prepare, and specifically make sure to bullet point your crib sheet before you ever pick up the phone and talk to an adjuster.
Communications can go left to right, they can go sideways, make sure that you have your bullet points of exactly the issues that you want to address, and that make up the components of your claim.
Have it on a cheat sheet, have it with you. And that’ll make sure that if you end up moving sideways, that you can come back to the middle, and come back to the heart of your negotiations, and increase the value of your claim.
Tip #3: Listen And Mirror
Insurance negotiation tip number three when trying to negotiate your insurance claim is to listen and mirror.
Mirroring is the technique of listening to what somebody says and repeating the gist of what they say back to you. And the reason this is so important in negotiation is you probably have no relationship with the insurance adjuster the first moment that you pick up the phone, but every little bit that psychologists tell us that you move forward to develop rapport in a relationship helps, and one of the techniques that psychologists tell us works is to listen and then to mirror.
So if the insurance adjuster is telling you why they had a very, very bad day in small talk, and they tell you, yeah and it was the worst day ever, as silly as it sounds, listen and say yeah, the worst day ever. And by doing that you’re validating what the insurance adjuster is feeling, and you’re opening them up to be receptive to what you have to talk about.
Tip #4: Prepare A List Of Questions
Insurance negotiation tip number four when negotiating your claim is to prepare a list of questions that you wanna ask in advance.
Questions are perhaps the most important part of the negotiation and no one ever talks about them. Everyone thinks it’s what you say that will win the day, but come on, let’s be real, right? Are you really going to convince someone that already has another opinion about something just by telling them how strongly you feel?
And the answer is, most likely not.
But questions allow another person to speak, and they do two things:
- One, they give you information. Where is the insurance adjuster coming from? What do they perceive to be the bad facts of your case that maybe aren’t bad facts, and that you can remedy by listening to them? Where are they off? Do they have facts that are wrong and that you can correct them?
- And two, they also give the insurance adjuster the opportunity to speak, and in his own mind listen to what he’s saying, and maybe realize that some of his positions are untenable or unreasonable.
So prepare your list of questions.
Tip #5: Ask Your Questions
Insurance negotiation tip number 5 when negotiating your claim, pull out your list of questions that you wrote down and ask them.
Just because you wrote them down doesn’t mean you’re going to remember to ask the questions.
What we trained our case managers to do when they first start working with us is to ask at least five questions. It seems a little bit difficult but it works. It gets communication flowing, and also helps to build rapport.
Tip #6: Seek Commitment To The Facts
Insurance negotiation tip number six when negotiating a claim is to seek a commitment to the facts that build the basis of how you’re valuing your claim.
So for example, you may have a certain value to your claim, and it’s based in large part on the fact that your client has substantial economic damages. Now, of course, you’ve already sent a demand package over to the insurance adjuster, and it included medical records, and so you think there shouldn’t be any question there.
The insurance company knows what these medical economic images are, but that’s not always the case. In fact usually, it’s far from it.
Sometimes the insurance adjuster discounts your medical bills, perhaps because the insurance adjuster thinks that the medical treatment was unnecessary, or it was too much, or sometimes the insurance adjuster discounts your medical bills because the insurance adjuster believes that they’re going to be written off.
Or sometimes the insurance adjuster made a mistake or missed over a particular bill.
So seek a commitment to some of these underlying propositions that are important to your case.
Tip #7: Know Your BATN During Insurance Negotiation
Insurance negotiation tip number seven is, know your BATNA.
Your BATNA is your best alternative to a negotiated agreement. And for us in the insurance claim business, and for us injury lawyers, that usually means filing a lawsuit, or if you’re already in litigation that can mean extending litigation and potentially going to trial.
But know it in advance, it will help you go back to tip number one and confirm that your evaluation of your case is correct if you know what the costs are that you and your client are going to have if an agreement is not reached.
Tip #8: Isolate Disputed Facts
Insurance negotiation tip number eight when negotiating your claim is to isolate disputed facts and be willing to stop the negotiation to go ahead and resolve those disputed facts and come back later.
So what do I mean by that?
Well, let’s look at it this way. Consider the scenario where a client has $30,000 of lost wages. Now that’s a lot of lost wages, and that’s going to be a big component. But using one of the tips beforehand, you’ve isolated and recognized that for whatever reason, that maybe it’s because a lack of proof the insurance adjuster doesn’t believe that that’s the right number. Instead, the insurance adjuster thinks that the lost wages are really 10,000 or $15,000.
Well if the insurance adjuster’s at $10,000 in lost wages and your at $30,000 in lost wages, and that’s economic damage, what are the chances that you’re going to be able to resolve your dispute? Probably not good, so why not stop the negotiation.
Try to understand why the insurance adjuster doesn’t believe what your damages are, and see if you can go back and gather up the appropriate evidence to prove beyond a shadow of a doubt to the insurance adjuster that your number is the correct number.
Maybe that’s going back to get W2s or pay stubs, or tax returns. Or in high wage cases, maybe that’s hiring a forensic accountant to go ahead and do the numbers for you, or an economist.
Regardless, be willing to stop your negotiation to solve the factual disputes, and be willing to come back later.
Tip #9: Know When To Not Negotiate
The ninth and final tip when negotiating your claim, to try to maximize your value when you’re negotiating with the insurance adjuster is knowing when to not negotiate.
That’s right, it’s probably the most important tip, which is knowing when negotiation is the wrong way.
Know when to step away from the table, and file a lawsuit.
When is that? It’s pretty simple. You know what your numbers are. You know what the settlement range is on your case, and you’re dealing with an insurance adjuster who’s coming in the way, way, way below that.
You’ve gone through the other tips, you’ve figured out that there isn’t a factual dispute. They have all the information. They’re just lowballing you. Don’t waste your time anymore.
Don’t negotiate anymore, don’t even respond. Just move forward, litigate, and ultimately as you move forward aggressively and proactively, let the insurance adjuster through their insurance attorney and litigation come to you to negotiate.