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Insurance Adjusters Are People Too

An adjuster suggested that my case was worth only “nuisance value.” I replied, “You may be willing to settle for nuisance value, but I have to tell you. I can be A VERY BIG NUISANCE…. Just ask my wife.” The adjuster chuckled.

I try to approach my communications with insurance companies and their lawyers with a touch of humility, and where appropriate, humor. They may be expecting arrogance and self-righteousness. I try to give them a pleasant surprise, and in the process, disarm much of their uh… defensiveness.

I can almost always establish some kind of collegial bond with the other side. If you treat the adjuster like an enemy, they become your enemy. If you treat him/her like a human being with a job to do, you may have an ally, someone who is searching for a solution to a common problem. Most adjusters are not that emotionally invested in your case. They just want to do their job reasonably well and close the file. After all, it’s not their money.

Here are a few insights I’ve gleaned from my 35 years of negotiating with insurance adjusters. This article reflects my perspective, which is based on my personal experience and style. Every attorney must develop his or her own approach.

Demand Letters

I never skip the demand letter, even when I’m dealing with an insurance company that always low balls. Once the case goes into suit, I may lose the ability to get my unfiltered message to the adjuster. Having that message filtered through defense counsel may damage my ability to persuade the adjuster to settle early and for fair compensation. Defense counsel may be motivated to prolong the litigation. I would rather provide periodic updates to the adjuster, steadily establishing a relationship, the credibility of the claim and the wisdom for the insurer to cut its losses and settle.

If your case goes into suit, you can still get your unfiltered message through by sending an extra copy or two of the settlement package to defense counsel. Most will simply forward it to the adjuster. I like to make defense counsel’s job easy. An unfiltered settlement proposal improves my client’s chances for an early and fair settlement.

I prepare comprehensive settlement demand letters in all but the simplest of cases. This forces me to pick up my file and review every page. I always find gaps in my proofs that I can then fill. The letter becomes my template for the case. If the case doesn’t settle, I will refer back to the letter again and again throughout the litigation to remind me of the facts. It will also form the back bone of any settlement conference or mediation memorandum. I almost always collaborate on the letter with the client to assure accuracy and completeness. I like my clients to know that I am working hard on their case, and they appreciate being brought into the process. The team approach works best.

I don’t always wait until I have every item of proof before I send the settlement package. I like to get the ball rolling early. While I’m requesting the missing wage loss statement, MRI report, etc., the adjuster is reviewing my package and often coming up with requests for additional information. I would rather know about that sooner rather than later. An added benefit is that if you supply additional proofs after you get that first offer, the adjuster can use the new information to justify a better offer. Sometimes it makes more sense to wait until all proof is in, so the settlement discussion will be fully informed and reflect the full value of the case.

I like to humanize my client by sending photos to the adjuster. It is helpful for the adjuster to see that my client is not just a stack of papers. I ask the client to send me photos in which they like the way they look. If the injury involves cosmetic damage to the client’s appearance, before and after photos are a must. Think carefully about the potential impact of any photograph you send – as they say, a picture is worth a thousand words.

I generally do not set hard and fast deadlines with insurance adjusters and I avoid making threats. Unless I am ready to act on that deadline or threat, I think you lose credibility when you threaten and then fail to immediately follow through. Typically, my settlement letters close with, “Please call me after your review is complete.” Why demand a response in two weeks (or three) when the adjuster is likely to ignore that request? Instead, I call after no more than two weeks and ask if they received the demand package. That gets the ball rolling and avoids an unnecessarily provocative beginning to negotiations.

When to Make the Demand

Another important issue involves the timing of your settlement demand. Typically, the best time is when the client has plateaued in their recovery. This helps to avoid the nightmare of settling a case and then having the client inform you months later that they have scheduled surgery.

Though it may run counter to conventional wisdom, I am going to suggest it may be appropriate under some circumstances not to wait until treatment is concluded before pursuing settlement. What would you do if you represented a six-year-old boy whose finger was partially amputated because of a homeowner’s negligence? Would you wait until the child grew into an adult? Wouldn’t you want to wait until the growth plates had fully matured? How would you know what the child’s future holds if you don’t wait? The problem with waiting is that your client might be much more sympathetic as a six-year-old boy than he will be as an eighteen-year-old man. Of course it’s impossible to know how your six-year-old client will present when he’s eighteen. But once the initial trauma has healed, the sequelae of an amputated finger are fairly predictable. By pursuing settlement early, not only might you save your client years of waiting, you might get him an offer that would provide far greater compensation than if you waited.

It also may make sense to pursue settlement before your client’s recovery has fully plateaued where he or she has suffered a serious injury and there is only minimal coverage available and no substantial assets. These cases often settle quickly and easily for the full amount of available coverage.

How do you find out what the policy limits are? Pre-suit, if you directly ask the adjuster about the limits, he/she will probably decline to answer. What I do is send proof of the injury and then follow up with a phone call. I ask if the limits are minimal (15/30 for an auto case). Adjusters almost always answer that question. If the limits are not minimal, then the next time we speak, I ask if it’s a 25/50 policy, and then I work my way up. I can almost always determine policy limits pre-suit this way. If you have established a collegial relationship with the adjuster, they won’t mind giving you this information.

How to Handle Negotiations

I don’t chase adjusters. I use the “shiny bowl of milk” approach. I put out the settlement brochure for the adjuster to review. But I don’t aggressively chase after an offer and I don’t beg for offers. You know what happens if you chase a cat – wait for the cat to come to you. That doesn’t mean you can’t call and ask about settlement. Just don’t be overly aggressive. Eventually the cat will get thirsty.

I’m careful about when I call adjusters (or counsel) for an important negotiation. I try to avoid calling when I’m upset, tired, hungry, in need of caffeine, etc. It’s too easy to let a challenging phone call turn into an angry interaction. I may even meditate or use some other relaxation technique just before making that call. I find that this helps me respond calmly to an attack on my client’s case. Losing your temper almost never helps your client. Wait for the right moment to make that big call. I know a lawyer who keeps a boxer’s heavy bag hanging in his office. After pounding the bag for 30 seconds, he has worked out some of his aggression. Then he can be assertive without being aggressive.

Avoid even the appearance of desperation. Even if your client is demanding that you accept a low offer on a six-figure case, find a way to mask your vulnerability. Adjusters can smell panic. You must convey calm at this uncomfortable time, and hopefully you can persuade your client that injury cases are usually marathons, not sprints.

Some Final Thoughts

A trick to watch out for is the adjuster (or defense lawyer) who claims confidently that he/she believes the case can settle for a certain compromised amount. If you assure them that indeed the case can settle for that amount, you may be disappointed when you hear later that they could not get the necessary authority. Here is what I do. I explain the situation to my client, that the offer is not firm and suggest a non-committal response. I then tell the adjuster that the compromised amount sounds good and that I will recommend it to my client. I may even say that I am pretty sure the client will take it. But I will not fully commit until the offer is firm. That generally results in a firm offer and a settlement.

What about the adjuster who wants to attend your client’s deposition? There are two schools of thought. The adjuster cannot attend without your permission. Only the attorneys and their clients have an absolute right to attend. On the one hand, the adjuster may feed defense counsel questions during the deposition that the client could trip up on, or may otherwise make what is already a stressful experience even worse. On the other hand, if my client presents well, I want the adjuster to meet him/her in person and see how well they testify. Permitting the adjuster to attend can be a powerful show of strength and confidence. Even if the deposition does not go as well as expected, all eyes are open and the parties are probably in a good position to accurately assess value.

Here is a final tip. When an adjuster seems agreeable to doing a high/low arbitration, ask if they will pay the low figure up front. Since they are going to have to pay at least that amount at some point, they may be willing to do so now. This should be part of the overall negotiations on high/low parameters and the identity of the arbitrator(s).

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