Whenever two disputing parties have put time and effort into negotiating a settlement, their engagement in that process has hastened attainment of an agreement. In a personal injury case, that same agreement has focused on the amount of money that should be used to compensate the victim of an accident.

Both sides appreciate the value of the submitted claim.

• The claimant should have in his or her mind a figure that represents the smallest acceptable offer from the insurance company.
• The insurance adjuster usually knows the maximum amount of money that the insurer has agreed to put forward in a bid.
• Those are the conditions under which the 2 sides negotiate, copying the approach of a buyer and seller that have decided to bargain over the price of a certain item.

How do the negotiations get started?

• The claimant-lawyer team sends a demand letter to the adjuster.
• The adjuster issues a response.
• The claimant has the right to accept or reject any offer from the insurance company, including that initial bid.

Approaches used by insurance companies, in effort to gain an advantage over at least some claimants.

Make a low-ball offer, one that falls well below the bid that the claimant had been hoping to receive; this approach provides the insurance company with a means for judging the claimant’s ability to comprehend the true worth of the submitted claim.

Insurance companies hope to end negotiations as soon as possible, and to convince the opposing party to accept a low payout. Their achievement of that goal would get realized faster, if a low-ball bid were to be accepted by the other side.

Sending a reservation of rights letter to some claimants, especially those that have not hired a Personal Injury Lawyer in Richmond Hill. That letter does not end the negotiations; it simply states that initiation of the negotiating process does not guarantee the granting of compensation to the victim/claimant.

Still, it does could confuse an unrepresented claimant. Obviously, a confused claimant might be more inclined to go along with an adjuster’s readiness to continue the negotiations. The insurance company would stand ready to take advantage of the renewed cooperation for the opposing party. It would probably issue a rather low bid. It would hope to witness an acceptance of the same bid.

Few claimants appreciate their own powers. Any one of them could accept a reasonable bid, without presenting a counteroffer. That could fool the insurer, who would have anticipated a lowering of the original demand.

Still, the adjuster must go along with the acceptance. In other words, the insurance company would get forced to agree to delivery of a generous payout. That would not be the outcome that any insurer would have in mind.