2-E NEGOTIATIONS Flashcards
(52 cards)
Negotiation:
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.
Liability claims:
● Harder to assign dollar amounts
● Factor in issues like mental duress and comparative negligence
Property damage claims:
Cost to repair or replace is simple and straightforward
Liability dispute example
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.
Before negotiations begin, an adjuster must determine:
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!
Prior to negotiations, the adjuster must:
● 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
Minor (but important) details
Solving simple, trivial matters can get negotiations unstuck
Minor (but important) details example
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.
Give and Take in Negotiation
● 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
Trustful Claimant + Trustful Adjuster =
Better Negotiations
Create a good first impression
● Professional appearance
● Respectful attitude
● Neatly groomed
● Good hygiene
Have a positive attitude:
● 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.
Keep comments polite
● 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.
Show respect:
● 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
Develop a good reputation
● A trustworthy reputation makes negotiation easier
● An untrustworthy reputation will undermine negotiation
Some helpful negotiation techniques:
- Humor
- Questions
- Demonstration
- Pleasant Surprise
- Diversion
- Silence
- Have a Back-up Offer Ready
- Flexibility
Use humor properly
● Lighthearted humor can defuse tense negotiations
● Must be used appropriately
● Consider the feelings of all present
Questions helpful for negotiation:
● Detailed
● Thoughtful
● Sincere
Questions harmful to negotiation:
● Patronizing
● Trivial
● Argumentative
● Questioning claimant’s ethics or intentions
Demonstrate contradicting evidence; which can include:
● Video footage
● Previous statements
● Witness testimony
● Contractor estimates
Pleasant Surprise
Conceding a point favorable to the claimant builds trust and goodwill.
Diversion: when negotiations are going nowhere
● End the meeting or divert to another area of negotiations to defuse high emotions
● Resume negotiations at an appropriate time
Practice selective silence
● People often talk simply to fill the silence
● Discomfort may lead to inadvertent disclosures
Have a back-up offer ready
● Gives the claimant the sense that they have options and choices
● Helps the adjuster be flexible while staying within the insurer’s limits
