Can I Negotiate With the Insurance Company Myself?

The process of a personal injury claim involves negotiation between yourself and an insurance claims adjuster. Whether you have an attorney or negotiate yourself, the process is the same, though you will have a great chance of success in receiving a fair settlement offer with an attorney to represent you. There is no list of mandatory rules in negotiation, but it helps to have an idea of the process and the steps to help you make the best decisions in your case.

Insurance Negotiations Overview

The process of negotiating a settlement in your case will require a great deal of patience, plenty of preparation, and a commitment to persistence. The process may seem unbearably slow, but you can use the time between counteroffers to plan ahead and reflect on your progress.

You can’t do much to destroy your case in negotiations unless you are terribly careless and sign a release form or cash an insurance company’s check. You can make minor mistakes and still avoid damaging your claim too much. If you say something that you don’t intend to say, you can explain that you misspoke and continue with negotiations. The insurance adjuster may push back, but you can get your negotiations back on track after a small mistake, so don’t waste energy worrying too much.

Patience Is A Virtue

When it comes to settlement negotiations, you have to have patience. You may need the money as quickly as possible, but you should never let the insurance company be aware of this. Don’t try to hurry the process, because the adjuster will recognize this and will focus on your weaknesses. Counteroffers will be based on your urgency to settle the case instead of being based on the facts of your claim. It is important to be patient, calm, and professional to keep the negotiations focused on facts.

Fair Treatment From Insurance Adjusters

You should not expect fair treatment from insurance claims adjusters. There is no law that says that they must be fair to you, and they can take advantage of your inexperience and anxiety. That isn’t to say that there are no honest, considerate, and empathetic adjusters out there, but you should not count on fair treatment and you should be wary of offers that are lower than what you deserve.

Basic Steps In Negotiation

1. Your Notification Letter

The first step of your personal injury claim is to send a notification letter to the insurance company of the at-fault person. This letter will express the fact that you are seeking compensation because you have been injured and sustained damages due to the negligence of the insured person. This is where your negotiation process begins.

2. Insurance Company’s Reservation of Rights Letter

Once you’ve sent the negotiation letter, you can expect a response from the insurance company in the form of the Reservation of Rights letter. This letter will tell you that the insurance company is reviewing your claim and will discuss the claim with you, though these discussions are not an admission of liability.

3. Your Demand Letter

You should not send a demand letter until you’ve completed medical treatment and any physical therapy or rehab that is necessary for your recovery. Your demand letter will outline your special damages (specials) with the details of your claim, damages, lost wages, medical expenses, etc. If you have a typical minor injury claim, multiply the full sum of your medical bills by a number that is in between two and five for pain and suffering (general damages). Your total settlement demand will include the special damages and general damages.

4. Adjuster’s Response/Counteroffer

While you may need to be patient at this point, you will eventually receive a response to your demand from the insurance adjuster. He or she may tell you that your claim has no value or much less than you indicated. You can expect to hear statistics and legal terms that are intended to indicate that you are not as experienced or knowledgeable as the insurance claims adjuster. Do not expect the adjuster to agree to your initial settlement demand amount.

Adjusters will frequently use different tactics to get you to agree to a lower settlement amount. They will say that they don’t have the authority to go higher. They will act as though the counteroffer is kinder than what you deserve. They may even say that the offer won’t be available in the future, as though this is the best you can expect to receive. These tactics will help the insurance adjuster to determine a few different things about your case:

  • Do you really understand how the settlement process works?
  • Are you impatient enough to accept a very low offer?
  • Are you inexperienced enough to believe his authority is limited?
  • Are you intimidated enough to give into rebuttals?
  • Are you serious enough to potentially file a lawsuit?

5. Your Response to Counteroffer

To make sure that the adjuster knows that you aren’t intimidated and that you are serious, you should respond to the counteroffer with a respectful and polite thank you, followed by a calm assertion that you disagree with the amount. You should explain that your injuries are real and that the treatment prescribed by your doctor was necessary for recovery. You may acknowledge the points that the adjuster made and mention that you’ll consider reducing your demand based on these points, though not by a lot. Let the adjuster know that you’ll review the offer and get back to them.

6. The Bartering Process

The next step is to slightly reduce your demand. The insurance adjuster may not respond quickly because he or she is hoping that your impatience will get the best of you, and you’ll initiate contact with a phone call. This is a mistake that you don’t want to make. If you call the adjuster before you receive a firm counteroffer, then you may find that you are negotiating against yourself. The offers and counteroffers will continue and you will keep defending your position and the adjuster defends the insurance company’s position. The goal is to eventually reach a figure that you are both comfortable with to finally settle the claim.

The “Drop Dead” Figure

The lowest amount that you are willing to accept to settle your claim is known as the ‘drop dead’ figure. You should be prepared to file a lawsuit if you cannot settle the claim for at least the amount of your drop dead figure. Do not reveal this amount to the adjuster. Your goal is not to get the drop dead figure, but a figure that is higher than this, so you should not let the adjuster know your minimum amount.

7. The Final Negotiating Step

At times, the claim will reach a stalemate where you and the adjuster are unable to reach a settlement that is agreeable to both sides. It is in everyone’s best interests to settle the claim, but you should be prepared for the possibility of the stalemate which will lead to a lawsuit.

Minor claims of $5,000 or less (in most states) can be filed on your own in small claims court. You’ll need to know the jurisdictional limits on the amount that you can demand on your own. If the amount of your demand is larger than this monetary cap, call an attorney to help you file a lawsuit in a higher court.


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