Negotiating with a Medical Malpractice Insurance Company...

Notes: Some people think Adjusters will offer less to a non-lawyer than a lawyer. That's not necessarily true, but it can be. Adjusters exist to try and settle a claim for less than it would cost if a lawsuit was filed.

If you're representing yourself the Adjuster may not give your case fair consideration because you don't have the same leverage attorneys have - the ability to file a proper lawsuit and pursue it through depositions, interrogatories and all other trial matters. Adjusters know your competency to file and pursue a lawsuit doesn't extend much past Small Claims Court.

The same experienced Adjusters know that even though they may have spent countless hours negotiating with a non-attorney injured party, that person won't hesitate to hire an attorney if they don't think the Adjuster's final offer is fair. If that happens the Adjuster knows she wasted a lot of time and the case still wound up in the medical malpractice insurance company's legal department. This raises the company's costs significantly.

If you are organized, professional, and not willing to settle the case quickly just to get your hands on some money, the Adjuster will most likely take you seriously and negotiate fairly.

Notes: The adjuster will not argue with you about the disability. Although a sensitive subject, you will have to rely upon the disability to work toward an appropriate settlement. You shouldn't feel uncomfortable using a disability as the primary leverage for your claim. Always remember, you didn't bring this upon yourself.

Notes: Adjusters need to settle cases, that's their job and they likely have a pile of other cases sitting on their desk. Telling the Adjuster her offer was too low, then telling her you'll get back with her early next week is a clear sign she's not going to buy you off quickly and cheaply.

Although this is not a game, the Claims Adjuster has just tested you. Don't react emotionally and don't jump at the first offer. Before the next call look again at your hard costs. Add all the past medical bills and do your best to estimate the future bills. Also add all the out of pocket expenses already spent and do your best to extrapolate them into the future.

In our example case, the amount Sean's parents have come up with for hard costs is $175,000.

Notes: Sean's parents don't know how to estimate an amount for pain and suffering, but they know $200,000 is not nearly enough to cover the hard costs, out of pocket expenses, past, present, and future bills, possible lost wages, and pain and suffering.

They spent some time at the courthouse looking at lawsuits for similar personal injuries. They saw lots of jury verdicts in similar cases. Eventually they got a general idea of appropriate payouts involving teenagers who were seriously injured as a result of doctor and hospital negligence.

Notes: By doing this Sean's parents have effectively put the Adjuster on notice. She knows they researched jury verdicts and because they have remained calm and collected during negotiations she also knows they're serious. She's probably not prepared to offer the $950,000 but she now knows there is a number - an amount on the table.

She's also just as aware of the jury verdict amounts. Part of her job, especially as a Senior Claims Adjuster, is to be aware of everything relevant to personal injury medical malpractice settlements and jury verdicts. Both parties know the settlement will be somewhere between $200,000 and $950,000 dollars. The question remains, what will that amount be?

All medical malpractice insurance company adjusters have what's referred to as "Authority to Settle". There is a certain amount of money the Adjuster is authorized to pay. The authority is usually dependent upon seniority and status.

Notes: The adjuster does not have to reveal what her limits are or how much she's prepared to pay. That information will only be available if a lawsuit is filed and the attorney requests it at pre-trial discovery. But she can reveal the limit if at some point she thinks it will help with negotiations.

The reason for not wanting to divulge payout authority is because as soon as she does she knows you will request that exact amount or $1.00 less. You would have effectively "bumped up" the negotiations.

Words like "right now" are important. The medical malpractice insurance company adjuster is not saying she can't get more money. Instead she's saying she doesn't have authority to pay any more right now - the implication being she could possibly go to her supervisor to increase her authority.

Notes: At this point in the negotiation there seems to be a stalemate. That's quite normal.

Notes: The Adjuster is now concerned because for the first time the issue of a personal injury lawyer has come up. Although Sean's parents were smart enough not to say they hired an attorney, or threatened to hire one, they at least let the Adjuster know they are considering doing so.

The Claims Adjuster is not panicking, but she's starting to give serious consideration to all the time and effort she's already invested in this case - realizing she now is on the brink of losing this negotiation to the legal department.

Notes: This is the first time Sean's parents have let the Claims Adjuster know they are willing to accept less than the $950,000 dollars. They didn't say the amount has to be $950,000 dollars, but that it must be closer to that amount (that's pure negotiating).

Notes: There it is. The Claims Adjuster just said $350,000 is the medical malpractice insurance company's final offer.

Once you hear the words "final offer" you know if you don't accept that amount you'll have to hire an attorney and file a lawsuit. Doing so, as we heard earlier, is a multi-year process. And if the verdict is in your favor, you run the risk of the insurance company appealing the case. That will take even longer.

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Sean's parents' initial demand was $950,000 dollars. They have now been offered $350,000 dollars. If they don't accept that amount they can take their chances at trial.

Sean's parents must decide on Sean's behalf whether to take the $350,000 dollars now, or wait for several years while Sean's case winds its way through the bureaucracy of the court system.

What's the upside? The upside is a possible jury verdict of much more than $950,000. The verdict also could be much less. Whatever the amount there is always the possibility the insurance company will appeal if they feel the award is excessive. An appeal will extend the case another year or two.