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How Do You Negotiate an Insurance Settlement?

Written by Berkowitz

statute of limitations

Most personal injury and medical malpractice claims are paid out, not by the defendant himself, but by an insurance company. And insurance companies are businesses that make money by accepting premiums, not by paying claims. As such, you can expect resistance when you file an insurance claim.

At the negotiating table, you will be facing a professional negotiator – an insurance adjuster whose sole purpose is to save as much money for his employer as possible. Since insurance adjusters are, essentially, professional negotiators, it’s going to be David vs. Goliath unless you know what you are doing.

Beware the Statute of Limitations

If you miss the statute of limitations deadline for filing a lawsuit, you can expect the insurance company to completely ignore you from then on. After all, why should they pay your claim if you are unable to go to court to force them to pay? Your ability to file a lawsuit is your only bargaining leverage, even if you never have to actually use it. Before you begin negotiations, you should know exactly how much time you have.

Unless an exception applies, you have two years to file a lawsuit, beginning on the date of the accident or injury that triggered your claim. If you are filing a claim for wrongful death, the clock starts ticking on the date of the victim’s death. Once you file a lawsuit, however, the clock stops ticking, no matter how long it takes to ultimately resolve your claim.

Extensions of the Statute of Limitations Deadline

Connecticut allows certain limited exceptions to the two-year rule, including:

  • If you did not discover your claim until some time after the accident or injury occurred, the two-year clock doesn’t start until you discover that you have a claim. Your failure to discover your claim must have been reasonable.
  • If the defendant leaves Connecticut, the clock stops ticking when the defendant leaves the state and doesn’t resume ticking until he returns. Nevertheless, the hard deadline is seven years after the accident.
  • If you need time to investigate the merits of a potential medical malpractice claim, the court clerk will grant you a one-time 90-day extension if you apply for it.

You may need the assistance of a lawyer to determine if any of the foregoing exceptions apply.

Basic Negotiating Principles

There is no such thing as a comprehensive step-by-step guide to negotiating a personal injury claim, because every case is different. Nevertheless, below are some useful principles.

  • Begin negotiations with the right attitude. The insurance company is not your friend (it is not necessarily your enemy either), and your interests are in opposition to each other. Your goal is to maximize the value of your claim, and their goal is to minimize it. Never forget that.
  • Know the true value of your claim, because you will be lost without that knowledge. This may take some research. Do not ignore the non-economic component of your claim such as pain and suffering, because that could make up the bulk of the true value of your claim.
  • Understand the policy language well enough to know immediately if the adjuster is trying to twist its meaning to their advantage.
  • Back up your claim with documentary evidence as far as possible. Medical expenses and lost earnings are particularly easy to quantify with documentation.
  • Familiarize yourself with the basics of Connecticut personal injury law.
  • Be polite and businesslike, but be firm when necessary.
  • Be patient – don’t jump at the first offer. It is highly unlikely that the insurance company’s first offer represents their true “bottom line.”
  • Demand that the insurance adjuster justify a low offer. He may be playing games with you to find out how naive you are.
  • Get the settlement in writing, and read the agreement carefully before you sign it.

The Insurance Company’s Bag of Tricks

Insurance companies are not Santa Claus no matter how much their advertising campaigns might encourage you to think they are. Like Santa, however, they will be carrying a bag – but it will be filled with tricks, not toys. Listed below are a few of them:

The Lullaby Strategy: Giving you the runaround isn’t just designed to exhaust you and neither are the excuses you might hear for the constant delays the insurance company may attempt to subject you to. They might be hoping that you don’t know about the statute of limitations deadline, and that you won’t find out until it is too late. Don’t let them lull you to sleep.

The Interview Strategy: Never, ever give the insurance company a recorded statement about your claim unless your attorney gives you the OK and he is present during the interview. And never assume that any conversation is not being recorded. The possible trick questions are endless: “How are you?” “I’m fine.” ”But didn’t you say you were in constant pain?” And that’s just the beginning.

Blaming the Victim:Insurance companies know that Connecticut law allows them to reduce the value of your claim if the accident was partly your fault, and to deny your claim entirely if the accident was mostly your fault. Just because they are trying to blame you doesn’t mean the accident was your fault.

The Fishing Expedition: Never give an insurance company unfettered access to your medical records. This is because the medical history of a claimant is a pond in which an insurance company will fish for evidence that your injury was caused by a pre-existing condition rather than by the accident itself. You might be surprised at how creative they can get, especially when they have a doctor on staff.

Playing Games with Policy Language: Insurance policies are written by insurance industry lawyers, and every word is carefully chosen. If the insurance company can establish that their policy does not cover your claim, the merit of your claim won’t matter anymore. Become very familiar with the language of the policy you are claiming under, and don’t let the other side carve out dubious loopholes.

Social Media Espionage: If the value of your claim is substantial, there is no reason why the insurance company can’t assign someone to monitor your Facebook and Twitter accounts to look for evidence that your injuries aren’t so serious after all. Set your profile to private, and don’t accept friend requests from strangers.

The Nickel and Dime Strategy: A skilled insurance adjustor can reduce your claim by a million dollars a nickel at a time. Although that is hyperbole, it does illustrate an important point: A multitude of small “adjustments” to your claim can be as damaging as one large adjustment.

Devaluation of Your Pain and Suffering: Pain and suffering is inherently difficult to quantify, but it is real. An insurance company will happily exploit the intangible nature of your suffering in order to devalue it. (Please note, however, that some insurance policies do not cover pain and suffering damages.)

“Can I Have Your Autograph?”: … at the bottom of the document with all the fine print, please. Never sign anything without having your lawyer check it first, and never accept a check for less than the full value of your claim without written confirmation that it represents only a partial settlement.

Playing Doctor: Your doctor is the one who is qualified to determine which medical treatments you need, not the insurance company. But that won’t prevent them from trying to substitute their own self-serving medical judgment for your doctor’s. 

“You Don’t Need to Retain a Lawyer”: The truth is thatthey don’t need you to retain a lawyer. Insurance adjusters grin from ear to ear when they hear that a claimant is attempting to represent himself. We wish we could be there to watch their smiles fade when they discover that Berkowitz Hanna has been retained to handle the claim.

How a Lawyer Can Help

A lawyer can assist you in obtaining a generous settlement, even if you never go to trial. The following are some of the ways a lawyer can help:

Determining the true value of your claim: It is dangerous to enter into negotiations without knowing the true value of your claim, and insurance adjusters know how to take ruthless advantage of this lack of knowledge. Two components of a personal injury claim that are most likely to be underestimated by an accident victim are (i) pain and suffering damages, which may far exceed medical expenses; and (ii) future medical expenses, which could be immense.

Negotiating with the insurance adjuster: If you are represented by a good lawyer, you may not even need to speak with the insurance adjuster at all – except to tell him that all further inquiries should be directed to your lawyer. Any settlement of your claim, of course, will require your express authorization. Your lawyer can help you with settlement negotiations in the following ways:

  • Drafting the initial demand letter. This sets the tone for the negotiations, and it must be drafted carefully.
  • Determining how much to ask for (this amount should normally be considerably higher than the value of your claim in order to give yourself room to bargain).
  • Responding to counter-offers, which are sure to come. The negotiation process often works like a game of ping-pong with offers and counter-offers flying back and forth.
  • Drafting a formal legal Complaint so that you can file a lawsuit. Often this is done as a negotiating strategy to show the other side that you mean business so they will issue a serious counter offer.

Providing a third-person point of view: If you have been seriously injured and are under a lot of stress, and if you feel that you have been treated unfairly by the defendant or the insurance company, it could be very difficult for you to look at your claim objectively. Retaining a third party, such as a lawyer, can help inject needed objectivity into an emotionally charged process.

Drafting a settlement agreement: The final stage of any successful negotiation is the signing of the settlement agreement. This agreement must be drafted carefully to avoid unintended consequences, including possible tax consequences. Your lawyer can draft this for you or review a draft submitted by the insurance company.

Decisive Action Can Make the Difference

The longer you wait to pursue your claim, the lower your odds of walking away with fair compensation. This principle applies even if you don’t miss the statute of limitations deadline, because evidence tends to deteriorate over time, thereby weakening your claim. Visit Berkowitz Hanna today to schedule a no-obligation case evaluation. Call us now or contact us online to get started.