After you send the insurance company your initial demand letter, you will need to wait to receive a counter-offer from the insurance adjuster. The time it takes to receive a settlement offer will vary by case and adjuster. Don’t read anything into how long it takes for the adjuster to get back to you. Remember that these are people just like you and I and they have a job to do.
Before they send you a counter-offer, the adjuster will likely have interviewed witnesses, reviewed the police report, and maybe even visited the scene of the accident. In certain cases they may be waiting for their own investigator to finish a report to send to them. And of course, they will have read and analyzed your demand letter.
When they are fully informed about the status of your case, and have analyzed what they feel a “fair” settlement value is, they will either call you to inform you of this or they will send you a written counter-offer or both. Don’t be surprised if the adjuster low balls your settlement offer or gives you an outright denial (based on North Carolina’s contributory negligence law, this happens quite often).
Don’t Be Fooled by the Claim’s Adjuster’s Apparent “Authority”
During the course of your settlement negotiations, you may hear a reference to the injusurance adjuster’s stated “authority”. This is a made up number that the higher ups at the insurance company have deemed to be the maximum amount that the adjuster can settle a case for without seeking a manager to sign off on the settlement.
[box type=”info”] Think of it like the authority that an employee would have to purchase office supplies or other items for an office. That employee might have the “authority” to purchase up to $100 in supplies and if an order goes over that amount, they need to seek approval from management.[/box]
It’s the same thing here. And this number doesn’t really mean anything. It is rare that an adjuster will tell you what their authority is, but you will find out if and when they tell you that “I need to get approval from management to sign off on this settlement”.
Typically, most people who are negotiating their own cases will not reach a settlement level that requires a second look from a manager. If you are negotiating at levels that high, you really should be working with an attorney on your case. Frequently, the higher value cases will require a trial, or at least the threat of a trial, to command the settlement value that they are actually worth.
What’s important for you to understand here is that if you hear an adjuster refer to their authority to settle, don’t worry too much about it. This is a tactic that the insurance adjuster will use to try and get you to settle your case for less than it is actually worth.
Once you have submitted your initial demand letter, it is not uncommon to have to wait several weeks or more before hearing back from the insurance adjuster. Many people want to know how long they should wait before following up with the insurance agent if they haven’t heard from them.
The answer is… it depends.
You don’t want to seem desperate by calling every day after you send out the demand, but at the same time you don’t want your claim to just hang out there with no action being taken. The best option is somewhere in between.
We recommend that you calendar regular follow-ups with the insurance adjuster after you have sent out the demand. The first call or email may be a week to ten days after you sent it out. The purpose of this call is just to make sure they received your demand, if they haven’t already acknowledged receipt.
The second call should come 30-40 days after you sent out the demand. This call will be a little more pointed and explain to them that you are expecting a response within the next few days.
Although it is uncommon, especially if you have done a good job of following up, the next call should come between 45-60 days. If they haven’t responded, and won’t return your calls, it is time to call a lawyer. You don’t have to threaten this, you should just do it.
They don’t need to know how you are handling your case.
A Word About Timing
The statute of limitations for most personal injury cases is three years in North Carolina. If you wait to send out your initial demand with less than 6 months to go before the statute of limitations runs, you are significantly devaluing the amount of your claim. Most claims, where the injuries are not serious, should settle between 18 and 24 months after the accident, if not before.
[box type=”warning”] If you are into the second year with no plan as to how you intend to settle your case, it is time to call a personal injury lawyer for assistance.[/box]
The Initial “Offer”
Frequently on this website we refer to “lowball” offers from insurance adjusters. There is a reason for this. It’s because that is the type of garbage that most adjusters send out as their initial offer. You make a reasonable demand for $75,000 and they come back with a counter-offer of $1,000.
It’s almost insulting, and we have seen it time and time again.
Now, $1,000 might be a little on the low side. The insurance adjuster will want to make you an offer that will make you want to bite. So instead of $1,000, they may come back with an offer of $7,500 or even $10,000.
The purpose of this offer is to make you think about it. They know that you are going through turmoil. They know you have been out of work and the bills are mounting. They know that you are struggling financially and need to get some “fast cash” in the door so that you can make ends meet.
It’s a sad reality, but many claimants will jump at this initial offer. Don’t make that mistake.
The insurance adjuster will point out all the holes in your case. They will diminish your pain and suffering. They will tell you that your medical bills were unreasonable and your treatment was unnecessary. They may even tell you that you could have worked through this injury, thus diminishing your claim for lost wages.
They want you to take their first offer. In fact, they are counting on it. This is how they make their money – settling cases like yours for a low-ball amount. And naive personal injury claimants that haven’t been reading this website make those mistakes all the time.
When you receive the initial offer, you will evaluate its merits. You should review the adjuster’s assertions point by point, line by line. It’s excruciating work, but it is absolutely necessary to maximize the value of your claim.
Next you will start to put together a counter-offer to send back to the adjuster. Remember, don’t take their initial offer personally. Don’t attack them in your own counter-offer. Maintain a sense of professionalism. If you can’t stay level headed in this negotiation, now is the time to call a lawyer. We do a great job of listening to our clients rant on about how unfair the system is and what a terrible person the insurance adjuster is. It comes with the territory.
Rejecting the Settlement Offer and Making a Counter Offer
Assuming you can stay level-headed about your negotiation, you will need to respond to the insurance companies counter-offer. At this point, you can accept their offer (not recommended), reject it and file a lawsuit (more on that later), or counter with a second offer.
The vast majority of claimants will respond with their own offer. Here are a few bullet points that you will need to include in this response:
- A statement that you find their settlement offer unacceptable and/or inadequate and that you have decided to reject that offer;
- A list of reasons why you deserve a higher settlement value for your particular case;
- A second demand for a higher settlement value.
From a purely legal standpoint, this is known as rejecting their offer and making a counter-offer. Depending on how reasonable or unreasonable your initial demand was (let’s assume it was reasonable), you will drop your counter-offer by a little bit, but not much.
You want to convey that you are willing to negotiate reasonably, but not let them know you are a pushover or, on the opposite side, are completely unreasonable. Both alternatives will dramatically decrease the value of your claim in the eyes of the insurance adjuster.
If you aren’t sure what to do, or what number to offer, you should contact a personal injury lawyer for assistance. Negotiating an insurance settlement can be a stressful time and the lawyer’s ability to review the case objectively is a tremendous asset. They may be able to give you insight into the next section of this article, what a “fair” settlement offer is.
What is a “Fair” Settlement Offer?
Evaluating a settlement offer from an insurance company can be tricky. It’s especially so in North Carolina due to the law of contributory negligence. Because of contributory negligence, if there is any hint that you may have been partially negligent in causing the accident, an insurance company is more likely to low ball their initial offer or deny the claim entirely.
You should be prepared to deal with this possibility in the event it happens to you.
But assuming there was no contributory negligence, and you get a “good” insurance adjuster on the case – how do you know what a fair settlement offer is?
It is highly unlikely, but insurance adjusters will sometimes send a perfectly reasonable settlement offer back to you. If you aren’t sure, or can’t be impartial enough to properly evaluate the settlement offer, you should hire a personal injury lawyer for assistance.
Bad Faith Insurance Practices
On the flip side, there is another common practice called insurance bad faith. This is where the insurance company has the ability and legal obligation to pay out a proper amount for a claim and they just refuse to do so in the face of overwhelming evidence to the contrary. Bad faith claims are difficult to pursue and extremely complicated. But if you do feel like the insurance company is acting unreasonably, you may have a cause of action for bad faith.
Return to the Personal Injury Claim Guide
If you have a question for us, you can submit it confidentially online by clicking here. You can also call The Hart Law Firm at (919) 883-4861. We are happy to speak to you and answered any detailed questions you may have.