Working With Adjusters for the Non-Specialist
By Stephen Smith
The following provides the non-specialist some approaches for working with insurance adjusters in claim negotiations, and are based on 20 years of working both for and against insurance companies:
1. Know your case. In addition to the details of the case, know its value, research verdicts and talk to other attorneys. There are a number of resources to help you, the primary one being the American Association for Justice (formerly the ATLA), as well as trial reporting services. You do not want your demand to be so high as to cause the company to dig in, or so low that you fail to maximize settlement value. My experience has been that cases settle more quickly and for a higher value if you slightly under price the initial demand.
To arrive at a dollar value, while the old formula of trebling special damages may be outdated, it still serves as a starting point. Adjustments to the formula can be made based upon type of injury (soft tissue vs. hard tissue), comparative negligence and whether the claim involves any sort of disfigurement.
2. Know who you are dealing with. This applies to both the company and the individual adjusters. I once had a plaintiff’s attorney list for me the different branch offices of one insurance company I worked for, who was in those offices and how those offices and individuals were likely to approach claims. While the same principles are regularly employed in claim evaluation, different companies have different cultures and approaches. Some companies are tough. Some are not. I worked for one company that absolutely did not want to take cases to trial. This approach drove up settlement values since attorneys knew about it. Other companies take very hard lines. In one simple personal injury claim, the adjuster called me on a Saturday to lower his settlement offer because he thought I would not be in the office. The point is you need this information to help you with your approach to settlement.
3. Be organized and timely. While it can be difficult to always be timely and consistent in providing information and responding to requests, adjusters have more respect and will be more responsive to the extent you are proactive. Adjusters remember attorneys who do not provide documentation, do not respond to phone calls and wait until the last minute to file suit. While there are some times when this has to happen—for instance, if your client has not finished treating—you still need to respond and communicate.
4. Never take a case you cannot try. Attorneys frequently file claims in hopes they will get a quick settlement. The majority of cases need to be evaluated and approached as if you will take them to trial. If an adjuster feels you do not intend to take the case to trial, it lowers the settlement value.
5. First-party and third-party claims are different. Cases involving third-party claims are handled differently by an insurer than first-party claims. In a third-party claim, the only leverage you have with the insurance adjuster is a potential judgment against the insured and defense costs. In first-party claims, the standards are different. Those claims give you additional leverage as the potential exists for attorney’s fees, treble damages and prompt pay damages under Sections 541 and 542 of the Texas Insurance Code if the adjuster does not handle the claim correctly.
6. Property damage and personal injury claims are different. Property damage claims are evaluated solely on the cost to repair or replace property damage, rather than by factoring the cost of treatment for pain and suffering. Make sure you are knowledgeable about reparability and costs. Consult with an expert as in a personal injury claim.
7. Remember you are dealing with human beings. Many attorneys feel they get more by trying to intimidate or bully the adjuster. My experience is that while this can work in the short run, over time more is achieved by treating the insurance adjuster with respect. First, most adjusters deal every day with claimants pushing for more money. Bullying and intimidation is simply less successful, as you are just another on the list. Second, harsh tactics tend to breed resentment, reaction and intransigence. By the same token, treating others with respect tends to provoke a response. Better settlements can be obtained by developing a rapport with the adjuster.
Stephen Smith is Chair of the Insurance and Defense Section at Underwood Perkins P.C. He has 25 years of experience in assisting insureds and insurers in handling claims and can be reached at email@example.com.