Dealing with Adjusters

Once the insurance carrier is put on notice that a claim will be made against its insured, an adjuster is assigned to the case. The particular adjuster will depend on a variety of factors, including the size, nature, complexity, and in some cases, the location of the claim. As a general rule, however, the more complex and potentially dangerous the case is, the more experienced and potentially hardened the adjuster. Most minor soft tissue injury cases will be handled by relatively inexperienced adjusters. Most of them do not have authority to settle beyond a certain limit and must go to a supervisor, or in large personal injury cases, to the home office, for settlement authority. More seasoned adjusters have greater authority, but depending on the size of the claim they, too, must go to the home office for approval.

There are advantages and disadvantages to interacting with each kind of adjuster. For example, young and inexperienced adjusters may not evaluate the case properly from a settlement perspective and will often offer you little or nothing. Many inexperienced adjusters do not realize the costs involved in litigation, the merits of a plaintiff’s personal injury case, and the likelihood of the plaintiff’s eventual success at trial. Furthermore, many of these adjusters want to begin a track record for their supervisor to review, showing that they are not giving the company’s money away. Remember that most adjusters must answer to a supervisor who reviews the claims settled; and in that review the adjuster must justify the award of any money spent. Therefore, in certain cases it is more difficult to settle a case with a young adjuster than it is with a seasoned and experienced one.

There are, however, many problems that arise with the experienced adjuster. In most cases, he or she will know “every trick in the book” and will conclude that you are trying to pull off every one of those tricks. Additionally, some of these adjusters like to play lawyer and think that they can analyze the case with all of its legal ramifications, complexities and uncertainties. An adjuster like this must be handled differently from the young adjuster. For example, young adjusters need to be educated on the merits of your claim. Generally, a good demand letter, backed up by sufficient medicals, and an effective straightforward position in settlement negotiations can help you with the young adjuster. You must demonstrate to the adjuster that there is a sound reason the case should be settled from the carrier’s perspective. By having good documentation for the file, the adjuster can justify to his or her supervisor why he or she has spent money.

On the other hand, the seasoned adjuster will often be more interested in the actual merits of the case. What he or she is looking for is specific documentation of hard numbers on lost earning capacity, special damages, loss of consortium claims, and most importantly on medicals. A good portfolio of medical damages, with supporting statements from physicians, will go a long way toward bringing the adjuster into the appropriate settlement posture.

You must also document the merits of the case for the adjuster. Seasoned adjusters will generally look at the liability questions much more closely. One good way to lay out the legal merits of the case is to put forth, in a detailed demand letter, an analysis not only of damages but of the law. What are the liability questions? How should liability be apportioned?

Do not automatically argue in all cases that the plaintiff is entitled to one hundred percent of his/her damages or policy limits. Many insurance adjusters will recognize your professionalism, skill and experience in personal injury cases when they see that you have appropriately discounted the case from a liability standpoint. In other words, if there is only a 50 percent chance of recovery, do not look for 100 cents on the dollar in recovery. The adjuster will know that there are liability problems and will expect that those problems will be taken into account by both sides in settlement of the case. Of course, the adjuster will highlight those liability problems in trying to discount the case. It is your job to put those liability problems into the proper perspective so that they can be taken into account in reaching a just settlement.

Tips for Dealing with Adjusters

Whether you are dealing with a young and inexperienced adjuster or a seasoned professional, there are certain ways to help increase the adjuster’s responsiveness and acceptance of your position as well as to maximize the potential for a settlement. In most cases, it is beneficial to all parties concerned for a case to settle.

Whenever you can negotiate in a professional and courteous manner with the adjuster, negotiations will likely remain open and cooperative, See Zmolek, “Art of Negotiation: Strategies and Tactics,” 27 Trial 8 at 22 (August 1991). The following checklist offers suggestions on dealing with the adjuster to help achieve a fair and just settlement.

Treat the adjuster with courtesy and respect

Respond promptly to adjuster’s calls, letters and requests. You should also try to personalize dealings with the adjuster. For example, get to know the adjuster by first name and discuss similar interests or affiliations. Keeping a biographical file on the adjuster allows you to ask questions about the adjuster’s family and other aspects of his or her private life. Tell the adjuster how much you appreciate the forthright approach in an earlier case you worked on together. See Twiggs, “Negotiating Claims with Insurance Adjusters,” 25 Trial 5 at 93-96 (May 1989). In your file database, devise a way to keep track of every case you have had with a particular adjuster. Keep all of your notes on the adjuster and how he/she handles and resolves cases.

Be persistent

Diary your file to provide status reports to the adjuster at regular intervals, usually every 30 to 60 days. If the adjuster does not return calls or respond to deadlines, call the adjuster to determine the problem. Many times it is a lack of documentation that can be resolved quickly. Zmolek, “Art of Negotiation: Strategies and Tactics,” 27 Trial 8 at 22, 23 (August 1991).

Avoid “brow-beating”

Brow-beating the adjuster is never productive. It is far more effective to personalize yourself and the claim itself, since the average claims adjuster handles approximately 200 claim files at any given time. It is not useful to become a nuisance. Never let it appear that you are taking the upper hand in negotiations. The claims representative sees himself or herself as a trained professional. A “know-it-all” attorney who, by attitude or insinuation, demeans the role of the adjuster will virtually never achieve a mutually acceptable settlement. The fair-minded plaintiff’s counsel who does the homework and fairly values the case will always get the adjuster’s ear. And once having it, open forthright negotiations, conducted in a fair and professional manner, will almost always lead to a just and expeditious settlement of even the most difficult claim.

Listen more, talk less

It is typical for an adjuster to spend the first few minutes on the telephone explaining to you in detail why your case does not merit the amount of money you requested. Most lawyers hate to listen to this rhetoric from the adjuster, and often will cut the adjuster off and say something like, “Just tell me the offer!” This is a missed opportunity for you to hear early in the case about all of the perceived negatives of your case from the defense perspective. If you cannot settle with the adjuster, and the case goes to defense counsel, you will know what the defense thinks are the major problems with your case. At this stage of the case, while you are dealing with the adjuster, you have time to fix some of these perceived weaknesses or to put the case in a better light for the next go round. When the adjuster is going on and on about how bad your case is, just sit back and take lots of notes.

Draft an appropriate demand letter

The demand letter should incorporate elements of liability and damages with case citations, witness statements, police reports, medical evaluations, photographs, etc. Provide documentary support for each element of damages, particularly for loss of consortium, loss of enjoyment of life, pain and suffering and other non-economic damages, as well as in cases of wrongful death. See Moore, “Loss of Enjoyment of Life,” 25 Trial 9 at 58 (September 1989); Madole, “Wrongful Death Damages: An Overview,” 25 Trial 9 at 84 (September 1989).

Provide “objective” criteria

Provide to the adjuster as much evidence as possible that can be viewed or described as “objective” criteria. This should include recent verdicts or settlements in similar cases, medical support for claims of permanent impairment, favorable articles, sections from the AMA Guides for the Evaluation of Permanent Impairment (4th ed. 1994) or The Diagnostic and Statistical Manual of Mental Disorders (4th ed. 1994), and the like. See J. Tarantino & P. Rocha, Estimating and Proving Personal Injury Damages (James Publishing). You should also include all objective diagnostic tests that have been done on your client. Remember that “the more objective the criteria on which you based the plaintiff’s claim, the more reasonable your claim appears to the adjuster—and the more likely the settlement will approach your demand.” Twiggs, “Negotiating Claims with Insurance Adjusters,” 25 Trial 5 at 95 (May 1989).

Avoid presenting a case that relies entirely on the numbers. Adjusters no longer evaluate strictly on a multiplication of accrued medical bills. Factors such as the length of treatment, the types of treatment administered, the attempts, if any, on the part of the patient to return to work are routinely factored into a claims department evaluation of a particular case.

Isolate areas of disagreement

Attempt to gain concessions from the adjuster regarding liability, damages or other areas on which the parties can agree, and document those agreements in writing. Once there has been agreement on a particular area, that area should not be reopened for purposes of discussion. This will avoid problems reaching closure in the negotiation process. Remind the adjuster that concessions on liability, damages or defenses are, and must be, a two-way street.

Don’t burn your bridges

Always leave the door open for continued negotiation. Even if the parties cannot agree on a settlement and it appears the case must be tried, never forfeit a future opportunity to reopen settlement negotiations. Try telling the adjuster that you and the insurance company can evidently not agree on a settlement. This may subtly shift responsibility for not settling the case off the adjuster and onto the company. Then try for the last time to get one more offer out of the adjuster by asking him or her to get the company to review all the facts of the case one more time to see if it will increase its offer. Twiggs, “Negotiating Claims with Insurance Adjusters,” 25 Trial 5 at 96 (May 1989).

Sending a draft complaint and draft discovery requests

This demonstrates to the adjuster that you are serious about the case, creating a catalyst for a fair offer. The complaint can add certain value to the claim, especially if the adjuster is concerned about litigation costs. Filing and serving the complaint also creates real time constraints, even if you do agree to extend the time for an answer to be filed. See Miller, “What Factors Will Prompt an Adjuster to Depart from his In-house Formula for Evaluating a Personal Injury Claim?” I Ins. Settlement J. 49 (1990); Zmolek, “Art of Negotiation: Strategies and Tactics,” 27 Trial 8 at 22, 23 (August 1991).

Ask “What do you need from me?”

When talking to the adjuster, it is good practice to ask “What information can I provide you in order to place this claim in a position for a good settlement?” The adjuster might give you a laundry list, but at least you will know what is important to this particular company or adjuster.

Michael J. Morse’s law firm has grown to 10 attorneys and 20 staff handling automobile, truck, and motorcycle accidents, both first and third party. They emphasize spinal cord and traumatic brain injuries. Besides the firm’s third party negligence practice, a large portion of the firm’s resources are dedicated to first party litigation against Michigan no-fault insurance companies. In 2007, Michael was appointed by Governor Jennifer Granholm to Michigan’s Chiropractic Board. Mr. Morse is the author of Litigating Neck and Back Injuries, from which this article is excerpted.