After an insurance adjuster has received a demand letter from a claimant, he/she responds to that demand by offering an opening bid. How does an adjuster arrive at the size of the number that will be used in such a bid?
Adjuster’s initial actions
He/she will obtain the view of the policyholder, the man or woman that the letter-writer has mentioned as the person responsible for the injury-causing accident. The insurance adjuster will examine the company’s database, collects relevant documents, such as doctors’ bills, proof of claimed salary, and receipts for repairs to damaged property.
Considers answer to 2 questions
What chance does the claimant/plaintiff have for winning this particular case?
What would a jury be apt to award this plaintiff, if the case were to move beyond the negotiation stage, to the litigation stage?
Tries to obtain an estimate of the case’s value
Some adjusters use a formula:
(Sum of total from all of claimant’s doctors’ bills)(Figure that reflects the injury’s severity) + total for lost wages = estimated value for claim
—The figure that represents the injury’s severity is usually a number between 1.5 and 5. If a claimant has suffered a catastrophic injury that specific number could be a 6 or a 7.
Some adjusters use a computer program: Present-day programs take into account the type of doctor that had oversight of the claimant’s treatment program. In other words, a computer program would yield a lower estimate, if the data given to the same program had mentioned treatment from a chiropractor, or other provider of alternative medicine.
Adjuster shares estimate of value with supervisor
Supervisor suggests adjustments to estimate. Those adjustments would call for a reduction in the size of that estimate. The size of the reduction would be greater, if the claimant had chosen against hiring a lawyer.
Supervisors seldom provide their adjusters with a new estimated figure. Instead, they tend to suggest removing some percentage of the figure produced by the formula or by a computer program.
Why do claimants that lack a lawyer receive a lower figure than those that have hired an attorney?
An adjuster’s opening bid should reflect the claim’s estimated value. Claimants seldom take the time to consider all the ways that pain and suffering could increase the value of their accident-linked claim. Because adjusters want to leave room from bargaining, their bids are lower, when dealing with unrepresented victims/claimants.
At the start of negotiations, the amount of money proposed by each side should not be too similar as per Injury Lawyer in Scarborough. Otherwise, there would be no room for negotiations. Both sides benefit from the key role that bargaining plays in the negotiation phase of the claims process. The adjuster’s bid should encourage pursuit of negotiations.
