The insurance company has an idea for the value of a submitted claim. The claimant has a figure in mind for the compensation package. During negotiations the 2 sides try to agree on a figure that represents a compromise.

Basic steps in the process of negotiating

Plaintiff writes demand letter and sends it to the defendant’s insurance company.
An insurance adjuster responds by sending a counteroffer, plus a list of weaknesses in the submitted claim. Plaintiff responds to the adjuster’s comments and to the adjuster’s counteroffer. Based on that the Injury Lawyer in Ottawa knows that the insurance company will increase the size of its offer. The plaintiff must make a choice: Accept the insurance company’s offer or put forward another counter demand.

A possible added step

The insurance company sends the claimant a reservation of rights letter. Insurance companies send out such letters in order to reserve the right not to pay the claimant anything until the insurer has studied the claimant’s policy. After sending that letter, the insurance company will continue to investigate the submitted claim. Furthermore, representatives from the insurance company will stand ready to negotiate with the plaintiff, or with the plaintiff’s lawyer.

Factors that can determine the outcome from the negotiations:

The amount of supporting evidence shown to the insurance adjuster: The plaintiff might elect to attach that same evidence to the demand letter. A decision made by the plaintiff: The plaintiff must decide on the minimum amount of money that he or she would be willing to accept in a negotiated settlement. Plaintiffs usually make that decision when composing the demand letter. Still, the amount selected can be changed.

If the initial bid from the adjuster comes close to the plaintiff’s minimum figure, then the plaintiff ought to raise the size of that same figure. On the other hand, if the statements from the adjuster highlight specific weaknesses in the plaintiff’s argument, then the plaintiff should reduce the size of the chosen minimum.

The speed with which the plaintiff wants to settle the case: Lawyers always urge their clients to delay negotiating until they have attained the state of maximum medical improvement (MMI). Once a plaintiff agrees to a settlement figure, then the plaintiff is asked to sign a release.

After the release has been signed, the insurance company has no reason to compensate a claimant for any further medical problems, even that associated with the accident. Thus, lawyers tell their clients to wait until they are certain that they have arrived at the point of MMI. Lawyers want their client to receive the largest compensation possible. That goal can only be achieved if the lawyer’s client has refused to push for the achievement of a quick settlement. Fast money is not the best money.