Winning Strategies for Negotiating Claims

Sharpen your game and avoid the pitfalls.

June 22, 2012 Photo

Achieving the optimal outcome for your company and your client requires regularly sharpening the edges of your negotiation skills—whether you’re a seasoned professional or fairly new to the table. To be an excellent negotiator, you have to understand that preparation means more than just knowing your case. Here we’ll look at several reminders to help you stay sharp and successful in your negotiations as well as several pitfalls to avoid.

Never Assume

While refraining from describing how the word “assume” can be used as an acronym offering good advice, it is a good starting point due to its prevalence. Assumption is the one element that often causes a stumble.

Have you made assumptions that might sting you later? How objectively have you examined your case? Don’t assume that issues that have not yet been broached do not exist. There may yet be some points to be made of which no one has thought. A case that appears hopeless can change on a dime when you pursue the facts without the assumption that you already know where the case is headed.

Here is a case that illustrates the need to avoid assumption: a vehicle that traveled left of center on a slippery road hit an oncoming car head-on. The accident involved a traumatic injury and resulted in the rear-seat passenger becoming a paraplegic from the impact. At the time of the accident, many vehicles still had lap belts for back-seat passengers. No defense could be found concerning liability, and a decision was made to get the best settlement possible, pay it, and close the file.

The question was then raised, “Would the claimant have suffered paraplegia if they had been wearing a different type of safety belt, such as a three-point belt?” Due to the complexity and cost of proving a different outcome against a corporate giant, the company elected not to pursue the issue. Bringing the automaker to court on speculation alone was assumed too risky a venture.

However, the adjuster suggested a more cost-efficient alternative. They should research previously litigated cases involving lap belts. If the defense attorney in such a case hired an expert witness, they could be used to testify. A case was found, and the expert agreed to review the claim. He determined that his previous research was applicable, and the auto manufacturer was brought into the case. That action raised the stakes considerably, and the case was quickly settled. Never assume your client is too big or that there is only one way to approach discovery.

Information and Timing

It bears repeating: timing is everything. The skill to defend your insured depends, in part, on your ability to evaluate the information provided and use it skillfully. Decide what you will reveal to the other side and when you will reveal it—but be careful. If you appear to be withholding vital information, you may lose the opposing counsel’s cooperation.

A case in which an insured was alleged to have been involved in a hit-and-run accident looked quite bleak at first. They had been in the vicinity of the accident scene at about the time the claimant stated that his vehicle had been struck. However, the insured had been at the city dump and had a time-stamped receipt as proof. Before revealing the receipt information, the insured’s carrier required the claimant to provide a letter stating the exact time of the accident. Though the plaintiff’s attorney was ready to close the door and get the check, defense refused to settle until all information was provided. The plaintiff’s attorney sent the letter, which showed the accident to have occurred at the exact time on the insured’s time-stamped receipt proving that he could not have been driving the vehicle that caused the accident.

Don’t Let Things Get Personal

Whenever you feel that a case is becoming personal, it is up to you to recognize it and defuse the situation so that negotiations will not be negatively affected.

On a recent phone call, a defense attorney and adjuster suggested to a plaintiff’s attorney that his client’s settlement demands were too high. The plaintiff’s attorney changed his tone, got huffy, and suggested that perhaps the court should decide who was right. Realizing that things had become personal, the adjuster jokingly suggested that in his many years in the business, he’d never been told that he was “right.” The plaintiff’s attorney laughed at the self-deprecating comment, and the tension was quickly mollified. The phone call ended with an agreement to discuss settlement again at a later date.

The point is, negotiations often can become contentious. One of Thomas Jefferson’s most famous quotes is, “When angry, count to 10 before you speak.” However, the second part of the quote is just as applicable, particularly in heated negotiations: “If very angry, count to 100.”

When information is introduced that is contrary to your point of view, avoid a quick, possibly conversation-ending reaction. Counter a seemingly ridiculous statement or demand by asking for additional information. The more unreasonable the demand, the more you should expect the claimant to provide proof. It is not your responsibility to aid your opponent in proving his case. Once the additional information is provided, you can take your time in evaluating its efficacy with a more objective mindset.

Always Look for Leverage

Negotiations are not always about the money—sometimes there are other issues more important to the claimant. For an astute defense attorney, money is only one of the settlement tools at his disposal. Don’t be afraid to obtain additional info by probing with various questions. Some questions you may ask are: Has the claimant’s attorney represented this client before? (Maybe they are close friends.) Does the client want to punish the tortfeasor? Is this the attorney’s biggest case? Is the claimant’s attorney convinced that there are no liability issues?

The information you discover from additional probing may help you gain leverage in settling the case. You might be surprised what people reveal when given the opportunity to talk.

In a case where two sides were discussing settlement, the court had already issued and awarded the plaintiff with a judgment. A settlement conference was arranged, and all parties met for discussion. The adjuster asked for permission to speak with the plaintiff while his attorney argued legal issues with the defense attorney. The adjuster probed the claimant, a young man approximately 21 years old, who stated that he was going to take his money, buy a red sports car, and head to California to become a standup comedian. Realizing that time was very important to the plaintiff, the adjuster offered to have the settlement check expedited to the plaintiff’s attorneys’ office by the next morning in exchange for an amount less than the initial judgment. Much to the chagrin of his attorney, the plaintiff immediately accepted.

Five Pitfalls to Avoid

President John F. Kennedy once said, “We cannot negotiate with those who say, ‘What’s mine is mine and what’s yours is negotiable.’” The willingness to compromise must exist in all manner of negotiations, whether pre-suit or while mired in litigation. In an effort to maintain the integrity of your position and ultimately achieve the best result for your client, be sure to sidestep difficulties that can impede your goals. Here are five pitfalls to avoid in the negotiations of a claim.

1    Not Looking Forward. At the outset of the claim or filing of the suit, you may deem the opposing side’s expectations as a “nonstarter” to negotiations. However, the early stages of a case may prove to be the most crucial time for fact finding and the investigation of evidence. Whether presented with a claim destined for litigation or involved in the defense of a lawsuit, strive to maintain a professional and approachable demeanor if and when you are contacted to negotiate. Your thoughtful and professional approach to early negotiation—even where you have no expectations of settlement—still impacts the ultimate result. Rushing through negotiation discussions, especially at the outset of a case, may prevent you from obtaining key information or may be a lost opportunity to hinder a future inflated demand. Knowledge, in this case, is power.

2   Getting Stuck in a Rut. In those cases that just won’t settle, a fresh examination of facts and the opposition’s approach may reveal a position not supported by the reality of the case. While it is necessary to conduct negotiations pursuant to company guidelines; court rules and procedures; and your own good practices, it is important not to allow the substance and tone of contentious negotiations to impact your perspective or your ability to reflect on the opposition’s interests and motivations. The longer the life of the case, the more opportunity you have to reevaluate expectations from a new perspective and tailor your negotiations accordingly. Fresh scrutiny may reveal a policyholder or a plaintiff who is not willing to negotiate in any meaningful way. Conversely, it may reveal that your initial approach was overly aggressive or is no longer supported by evidence.

3   Getting Lost in the Forest. In every claim or case—simple or complex—you will develop a theory. Always maintain an understanding of the substantive facts and evidence that form the basis of your overall objectives. Throughout the negotiation process, the opposition may offer a version of facts or case law that is incongruous to your theory or “smoking gun” document in an effort to gain leverage. While you should always investigate your opposition’s theory of the case, it’s just as important to evaluate the significance of what is being offered. If the other side offers facts or case law in conflict with your theory of the case, request their basis of information and do some thoughtful investigation. Don’t fixate on issues that have no impact on big-picture objectives or your client’s best interests. Running after red herrings to prove a point will impact your leverage and diminish your own credibility. 

4    Not Obtaining a Signed Confidentiality Agreement. Make sure your negotiations are confidential. While offers of compromise or settlement are not admissible to prove liability, statements of fact made as part of the negotiation process may become discoverable. Consider whether confidential or disclosed statements should be made to the other side.

5    Not Communicating Your Approach with Your Own Side. Once the claim is in litigation, it is important to develop an understanding of the role of counsel and adjuster for all aspects of negotiation. Should negotiation have been attempted prior to the initiation of the suit, any initial demands or offers should be discussed along with an understanding of the pre-suit expectations. Following the filing of the suit, counsel and adjuster should have a clear understanding of the manner in which negotiations will be conducted. As the case progresses, considerate and continued communication between both parties is essential to a strong and unified negotiation strategy.

Thoughtful and measured negotiation tactics can serve many purposes. You cannot effectively negotiate a settlement in the best interest of your client without a thorough understanding of your case. However, the negotiation process can be used to collect evidence, gain an understanding of your opponent’s motivation and interest, assess your realistic position, and, ultimately, gain the leverage you need to achieve your client’s desired results.  

Neil Santolucito is senior claims representative with United Fire Group. Monica Palermo is an attorney with Clausen Miller. They can be reached at,, respectively.

About The Authors
Multiple Contributors
Neil Santolucito

Neil Santolucito is senior claims representative with United Fire Group. He can be reached at

Monica Palermo

Monica Palermo is an attorney with Clausen Miller. She can be reached at  

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