Dealing with Lowball Offers:
Some Practical Suggestions & Considerations
BY: Joseph L. Vaccaro
There are many ways to deal with the “lowball” offer before it becomes necessary to file a lawsuit.
The first question you must ask yourself is why are you getting a lowball offer in the first place.
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Is this a carrier that always makes a lowball offer and deliberately forces cases into litigation?
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Does your client fall into a “profile: that you suspect or know the insurance company has targeted? (i.e. minimal impact damage, soft tissue injuries, preexisting conditions etc.)
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Is the adjuster experienced or inexperienced? Many time, inexperienced adjusters do not comprehend or appreciate the nature of an injury and do not evaluate the case properly;
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Have you provide all the information that the adjuster needs to evaluate the claim?
There may be other reasons to consider. Do not overlook calling the adjuster with a simple request to explain why they are offering what they are offering. An adjuster will generally give you some insight into why he/she is making the offer they are making. Listen carefully even if the reasons sound ridiculous. You will gain some knowledge that will dictate what to do next.
Typical responses are “your demand is ridiculously high which is why my offer is so low.” This may be a sign that the adjuster is inexperienced or it may simply be the adjusters negotiating style. It is up to you to figure out which and to respond accordingly.
Having come to some conclusions as to why you are receiving the lowball offer will help you formulate a counter offensive.
For example, if your demand is “pie in the sky,” a significant readjustment in the demand might be in order. You can “test the waters” with the adjuster by using “what if…” questions.
If you have simply indicated to the carrier that you believe the value of your claim exceeds their policy limits and you receive a lowball offer, you need to figure out the real value of your claim. If the real value of your claim does indeed exceed the policy limit, then it would be appropriate to make a counter demand with a number certain that is in excess of the policy limit. This will accomplish several things. The adjuster will be forced to inform his/her insured that claims are being made in excess of the policy limits and suggest they get personal counsel.
Many times, personal counsel can be instrumental in getting the insurance company to make an offer that is more consistent with the damages since that attorney, more often than not, is in a better position to pressure the carrier.
If your claim is not one you want to file a suit on, but the offer is simply unreasonable, send the adjuster a letter requesting they explain the offer, why the offer is reasonable and why your client should accept it. Putting an adjuster “on the spot” in this manner forces the adjuster to justify his/her actions. This is particularly true in first party uninsured motorist claims. The carrier has an obligation under Florida Statute 626.9541(i) to explain all offers of a compromise settlement either as they relate to the facts of the accident, the law or the provisions of the policy. In first party matters, you should insist on an explanation of any offer presented in a “lowball” fashion. Make the request several times if necessary.
If the adjuster does respond, the response will typically be a “non-answer” which should prompt another letter pointing this out and requesting further detailed explanation.
The purpose here is to force the carrier to justify their position. Failing that, report and file a Consumer Complaint with The Department of Insurance with a request for assistance. It is recommended that the letter be detailed citing any breeches of ethical conduct on the part of the adjuster or any violations of the Unfair Claims Practice Act or Florida Statutes.
This kind of a complaint to The Department of Insurance, especially when a copy is sent to the carrier, will trigger a review of the file by upper claims management, causing lots of attention to the file. In addition, the carrier will have to justify their actions to the department.
If they cannot do that satisfactorily, the local Deputy commissioner may pass the file up to the equivalent of a quality control unit. If that unit receives enough complaints, it will trigger an audit of the insurance company’s files by the department.
Needless to say, insurance companies do not like it when The Department of Insurance decides to pull an audit. It puts them on the spot.
If your claim is meritorious, and you have provided the insurance company with information it needs to evaluate the case properly, upper management will typically do a turn around and settle the claim rather than deal with the department. Also, if you are dealing with an inexperienced adjuster, the more experienced upper manager will likely reevaluate the case and instruct the adjuster to settle the claim for an appropriate sum.
If you’ve done all that is possible to justify your position and the carrier is still lowballing, consider pre-suit mediation as yet another means of getting your case settled. If the carrier agrees to this, you may learn a lot more as to why they are treating your case the way they are and often times this approach can stimulate settlement.
Dealing with lowball offers requires creativity. You can always resort to filing a lawsuit if necessary but if you are dealing with a claim that you do not particularly want to litigate, then you need alternative techniques. On the other hand, if there is potential for bad faith and the case is litigated to an excess judgment, the carrier will be in the un-enviable position of defending actions that can’t be defended.
