Negotiations

Question 1

Negotiation

Answer 1

A process by which two opposing parties attempt to merge their respective interests in order to yield a balanced and beneficial outcome for both parties.

Question 2

Liability claims are harder to ____, and they factor in issues like _____ and _____.

Answer 2

• assign dollar amounts
• mental duress
• comparative negligence

ex.: Jacob rear-ends MAry. How much is her claimed mental duress worth?

Question 3

In a property damage claim the cost to ______ or ____ is ____ and ____.

Answer 3

• repair
• replace
• simple and straightforward.

ex.: Josh wrecks his car. His adjuster only needs to estimate bodywork.

Question 4

Preliminaries of negotiation:

What must the adjuster determine?

Answer 4

1. ) Is there coverage?
   - peril is covered
   - policy is active, etc.
2. ) What is the insured’s liability? (liability claims only)
3. ) What are the damages?
   - Special damages
   - General damages
   * Remember no negotiating punitive damages!

Question 5

Prior to negotiations, the adjuster must do what?

Answer 5

1. ) Complete investigation
2. ) Complete estimate
3. ) Know the circumstances
4. ) Be clear about objectives
5. ) Understand possible obstacles
6. ) Know the maximum amount the insurer will pay
7. ) Have an idea of the minimum amount the claimant will accept.

Question 6

Negotiation tips

Answer 6

1.) Minor (important) details: solving simple, trivial matters can get negotiations unstuck. Ex.: Saying “I’m sorry” for a clerical error or a frustrating misunderstanding.

2. ) The “give and take”:
   - approach negotiation with an open mind
   - impossible to prevail on every point
   - conceding some points increases likelihood of opposing party conceding points
   - inflexibility prevents negotiation and causes frustration

3.) Develop trust: trustful claimant + trustful adjuster= better negotiations

4. ) Create a good first impression
   - professional appearance
   - respectful attitude
   - neatly groomed
   - good hygiene

5.) Have a positive attitude:
-humble and understanding
-willing to listen
-open to new facts
-take claimant’s perspective
Caution: an arrogant or “win-at-all-costs”

Question 7

Negotiation tips

Answer 7

1.) Minor (important) details: solving simple, trivial matters can get negotiations unstuck. Ex.: Saying “I’m sorry” for a clerical error or a frustrating misunderstanding.

2. ) The “give and take”:
   - approach negotiation with an open mind
   - impossible to prevail on every point
   - conceding some points increases likelihood of opposing party conceding points
   - inflexibility prevents negotiation and causes frustration

3.) Develop trust: trustful claimant + trustful adjuster= better negotiations

4. ) Create a good first impression
   - professional appearance
   - respectful attitude
   - neatly groomed
   - good hygiene
5. ) Have a positive attitude:
   - humble and understanding
   - willing to listen
   - open to new facts
   - take claimant’s perspective
   * *Caution: an arrogant or “win-at-all-costs” attitude can torpedo negotiations.**

Question 8

Negotiation tips

Answer 8

1.) Minor (important) details: solving simple, trivial matters can get negotiations unstuck. Ex.: Saying “I’m sorry” for a clerical error or a frustrating misunderstanding.

2. ) The “give and take”:
   - approach negotiation with an open mind
   - impossible to prevail on every point
   - conceding some points increases likelihood of opposing party conceding points
   - inflexibility prevents negotiation and causes frustration

3.) Develop trust: trustful claimant + trustful adjuster= better negotiations

4. ) Create a good first impression
   - professional appearance
   - respectful attitude
   - neatly groomed
   - good hygiene
5. ) Have a positive attitude:
   - humble and understanding
   - willing to listen
   - open to new facts
   - take claimant’s perspective
   * *Caution: an arrogant or “win-at-all-costs” attitude can torpedo negotiations.**
6. ) Keep comments polite:
   - Keep criticisms out of the discussion
   - Maintain professional speech, even if claimant is unprofessional
   - Don’t make claimant angry
   - Rude, sarcastic remarks, especially when they do not pertain to the claim itself, are a waste of time.
7. ) Show respect:
   - Look claimant in the eye
   - Shake hands warmly
   - Don’t interrupt or correct
   - Listen and seek to understand
   - Don’t assume you know what the claimant wants
8. ) Develop a good reputation
   - A trustworthy reputation makes negotiation easier
   - An untrustworthy reputation will undermine negotiation

Question 9

Negotiation techniques

Answer 9

1. ) Humor
2. ) Questions
3. ) Demonstration
4. ) Pleasant surprise
5. ) Diversion
6. ) Silence
7. ) Have a back-up offer ready
8. ) Flexibility

Question 10

Use humor properly

Answer 10

• lighthearted humor can defuse tense negotiations
• must be used appropriately
• consider the feelings of all present

Question 11

Ask the right questions

Answer 11

1. ) Helpful questions are:
   - detailed
   - thoughtful
   - sincere
2. ) Harmful questions are:
   - Patronizing
   - Trivial
   - Argumentative
   - Questioning claimant’s ethics or intentions

Question 12

Demonstrate contradicting evidence

Answer 12

• video footage
• previous statements
• witness testimony
• contractor estimates

Question 13

Pleasant surprise

Answer 13

Conceding a point favorable to the claimant builds trust and goodwill. If you concede a point that is a ploy you will be untrustworthy.

Question 14

Diversion

Answer 14

When negotiations are going nowhere:

• end the meeting or divert to another area of negotiations to defuse high emotions.
• Re-initiate negotiations at an appropriate time

Question 15

Practice selective silence

Answer 15

• People often talk simply to fill the silence

- Discomfort may lead to inadvertent disclosures

Question 16

Have a back-up offer ready

Answer 16

• Gives the claimant the sense that they have options and choices
• Helps the adjuster be flexible while staying within the insurer’s limits.

Question 17

Be flexible

Answer 17

Be willing to make minor changes within the insurer’s parameters.

• Strengthens the adjuster’s position
• Shows the claimant that the adjuster is accommodating
• Adjuster should be very sure of the insurer’s “stop-marks”.

Question 18

Litigation

Answer 18

• laws an courts favor settlement by negotiation, avoiding litigation
• Offers made during negotiations are not admissible in court

Question 19

Property claims vs liability claims

Answer 19

• property: claimant is the policyholder

- Liability: claimant is a third party

Question 20

Should the claim go to court?

Answer 20

• How much money must be surrendered?
• How will this affect our reputation?

Court is unpredictable and the judge may have potential prejudices against insurers.

Question 21

Adjuster’s claim file: discoverability

Answer 21

• discoverable vs privileged
  
  • attorney-client privilege: confidential information between the attorney and his client shared as part of the process of getting legal advice.
  • Work product: work prepared for the insurer in anticipation of imminent litigation, as long as the insurer would not have had the work done if it weren’t for the lawsuit.

Question 22

Adjuster’s claim file: proper filing guidelines

Answer 22

Claim file should be

• clear
• organized

Claim file should have

• detailed documentation of claimant’s testimony
• witness statements
• investigations

Claim file should NOT have

• negative opinions about the claimant or insured
• racist or biased comments

Question 23

Adjuster’s claim file: proper language

Answer 23

Unsafe:
“I believe the claimant is a lying fraud, which is common among people in her income bracket.”

Safe:
“My investigation revealed several apparent inconsistencies between the physical evidence and the claimant’s statements. They are as follows:…”

Question 24

Adjuster’s claim file: additional claim file safety tips

Answer 24

1. ) Never joke in written communications- paper or electronic
2. ) Be careful with photographs
3. ) Document everything, including the date of all communications as they transpire

Ex.:

• 8/23/12- Called claimant and left a message.
• 8/26/12- Sent interim report to claims manager Joe Smith
• 8/27/12- Inspected loss with insured and insured’s contractor. Took recorded statement.

Question 25

Criminal vs. Civil trial

Answer 25

Criminal: State (plaintiff) vs citizen (defendant) Civil: Citizen (plaintiff) vs citizen (defendant) TV depictions: Criminal trial: Law and Order Civil trial: Judge Judy

Question 26

Claims in civil trials

Answer 26

Claims disputes are settled in civil trials: - defendant is typically the insurer - Plaintiff is the claimant - Adjuster is typically a witness If an adjuster does end up in criminal court it is usually as: -witness for either party OR -Defendant (if accused of a crime)

Question 27

Burden of proof :Criminal vs civil trial

Answer 27

Criminal trial burden of proof: - 12 out of 12 jurors - guilt proved "beyond a reasonable doubt" Civil trial burden of proof: -wrongdoing proved by a "preponderance of the evidence" Preponderance of evidence: more evidence supports the plaintiff's case than contradicts it (51% or more evidence supports)

Question 28

Contributory vs comparative negligence

Answer 28

Jury's responsibilities: - determine level of liability of both parties - determine the amount of damages Contributory negligence: -any negligence on the part of the plaintiff=no settlement Comparative negligence: -settlement reduced by the percentage of the plaintiff's negligence.