2-E 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:

Answer 2

● Harder to assign dollar amounts

● Factor in issues like mental duress and comparative negligence

Question 3

Property damage claims​:

Answer 3

Cost to repair or replace is simple and straightforward

Question 4

Liability dispute example

Answer 4

If Jacob rear-ends Mary, how do you, as the adjuster, assign an exact value to her claimed mental duress? And did she play a role in her own damages? If so, to what extent? On the other hand, if Josh wrecks his own car, your job is much more simple: estimate the cost for the body work.

Question 5

Before negotiations begin, an adjuster must determine:

Answer 5

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 6

Prior to negotiations, the adjuster must:

Answer 6

● Complete investigation
● Complete estimate
● Know the circumstances
● Be clear about objectives
● Understand possible obstacles
● Know the maximum amount the insurer will pay
● Have an idea of the minimum amount the claimant will accept

Question 7

Minor (but important) details

Answer 7

Solving simple, trivial matters can get negotiations unstuck

Question 8

Minor (but important) details example

Answer 8

The insured may want something as simple as an apology for a clerical error or other misunderstanding. If an adjuster can pinpoint and rectify minor issues with the claimant right off the bat, the negotiations process may quickly take care of itself and lead to a satisfactory outcome for both parties.

Question 9

Give and Take in Negotiation

Answer 9

● 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

Question 10

Trustful Claimant + Trustful Adjuster =

Answer 10

​Better Negotiations

Question 11

Create a good first impression

Answer 11

● Professional appearance
● Respectful attitude
● Neatly groomed
● Good hygiene

Question 12

Have a ​positive attitude:

Answer 12

● Humble and understanding
● Willing to listen
● Open to new facts
● Take claimant’s perspective
An arrogant or “win-at-all-costs” attitude can torpedo negotiations.

Question 13

Keep comments polite

Answer 13

● 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.

Question 14

Show respect:

Answer 14

● 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

Question 15

Develop a good reputation

Answer 15

● A trustworthy reputation makes negotiation easier

● An untrustworthy reputation will undermine negotiation

Question 16

Some helpful negotiation techniques:

Answer 16

1. Humor
2. Questions
3. Demonstration
4. Pleasant Surprise
5. Diversion
6. Silence
7. Have a Back-up Offer Ready
8. Flexibility

Question 17

Use humor properly

Answer 17

● Lighthearted humor can defuse tense negotiations
● Must be used appropriately
● Consider the feelings of all present

Question 18

Questions ​helpful​ for negotiation:

Answer 18

● Detailed
● Thoughtful
● Sincere

Question 19

Questions ​harmful​ to negotiation:

Answer 19

● Patronizing
● Trivial
● Argumentative
● Questioning claimant’s ethics or intentions

Question 20

Demonstrate​ ​contradicting evidence; which can include:

Answer 20

● Video footage
● Previous statements
● Witness testimony
● Contractor estimates

Question 21

Pleasant Surprise

Answer 21

Conceding a point favorable to the claimant builds trust and goodwill.

Question 22

Diversion: when negotiations are going nowhere

Answer 22

● End the meeting or divert to another area of negotiations to defuse high emotions
● Resume negotiations at an appropriate time

Question 23

Practice selective silence

Answer 23

● People often talk simply to fill the silence

● Discomfort may lead to inadvertent disclosures

Question 24

Have a back-up offer ready

Answer 24

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

Question 25

Be flexible

Answer 25

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 26

Negotiation techniques:

Answer 26

● Humor
● Questions
● Demonstration
● Pleasant Surprise
● Diversion
● Silence
● Back-up Offer
● Flexibility

Question 27

Litigation

Answer 27

● Laws and courts favor settlement by negotiation, avoiding litigation
● Offers made during negotiations are not admissible in court

Question 28

Liability Claims vs. Property Claims

Answer 28

● Property:​ claimant is the policyholder

● Liability: ​claimant is a third party

Question 29

Litigation​ ​is a last resort for the insurer:

Answer 29

● Unpredictable

● Potential prejudices against insurers

Question 30

Should the insurer take the claim to court?

Ask two questions:

Answer 30

1. How much money must be surrendered?

2. How will this affect our reputation?

Question 31

Should the insurer take the claim to court? Example

Answer 31

Successful negotiation becomes much more difficult if an insurer becomes known as a “push over,” rarely taking a case to trial regardless of the circumstance. Lawyers opposing the insurer may believe they can ask for whatever they want, knowing that historically the insurer is apt to pay rather than risk trial.

Question 32

In court, the adjuster’s claim file is _______; it must be handed over.

Answer 32

discoverable

Question 33

Non-Discoverable: 2 Types

Answer 33

1. Attorney-Client Privilege:

2. Work Product

Question 34

Attorney-Client Privilege:

Answer 34

confidential information between the attorney and

his client shared as part of the process of getting legal advice

Question 35

Work Product:​

Answer 35

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 36

Proper filing tips guidelines

Answer 36

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 37

Proper filing tips guidelines example

Answer 37

Suppose you are investigating a fire claim. You find that there are several inconsistencies between the physical evidence and the claimant’s statement. Instead of writing in your file “I believe the claimant is a lying fraud, which is common among people in her income bracket,” you might instead write, “My investigation revealed several apparent inconsistencies between the physical evidence and the claimant’s statements. They are as follows: … .” The first comment may compromise the insurer’s ability to defend itself if the claim goes to court; the second will not.

Question 38

Additional claim file safety tips

Answer 38

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

Question 39

Additional claim file safety tips

example

Answer 39

Here is what a record of communications in a claims file might look like:
■ “8/23/18 – Called claimant and left a message.”
■ “8/26/18 – Sent interim report to claims manager Joe Smith.”
■ “8/27/18 – Inspected loss with insured and insured’s contractor. Took recorded
statement.”

Question 40

Criminal Trial​:

Answer 40

State (plaintiff) vs. Citizen (defendant)

Question 41

Civil Trial​:

Answer 41

Citizen (plaintiff) vs. Citizen (defendant)

Question 42

TV depictions:

Answer 42

Criminal trial: ​Law and Order Civil trial: ​Judge Judy

Question 43

Claim disputes are settled in ​civil​ trials:

Answer 43

● Defendant is typically the insurer ● Plaintiff is the claimant
● Adjuster is typically a witness

Question 44

If an adjuster ​does​ end up in criminal court it is usually as:

Answer 44

● Witness for either party
OR
● Defendant (if accused of a crime)

Question 45

Criminal trial burden of proof:

Answer 45

● 12 out of 12 jurors

● Guilt proved “beyond a reasonable doubt”

Question 46

Civil trial​ ​burden of proof:

Answer 46

● 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 47

Contributory vs. Comparative Negligence

Jury’s Responsibilities:

Answer 47

● Determine the level of liability of both parties

● Determine the amount of damages

Question 48

Contributory Negligence:

Answer 48

Any negligence on the part of the plaintiff = ​no settlement

Question 49

Comparative Negligence:

Answer 49

Settlement ​reduced ​by the percentage of the plaintiff’s negligence

Question 50

Criminal trial:

Answer 50

● State accuses defendant of violating the law
● 12 out of 12 jurors must agree
● Proof beyond a reasonable doubt

Question 51

Civil trial:

Answer 51

● Citizen accuses another citizen of wrongdoing

● Proof by a preponderance of the evidence

Question 52

If plaintiff was at all negligent in the loss:

Answer 52

● Contributory Negligence: no settlement (only allowed in some states)
● Comparative Negligence: partial settlement