Utah Attorney answers question: How to Negotiate with an Insurance Company

Explanation is given by viewing three videos in sequence.  View the first one, scroll down, view the second one and then view the last one.

Pawn Stars is a television show airing on the History Channel.

Pawn Stars make two points: (1) never take the first offer and (2) be willing to walk away.

Utah Personal Injury Attorney explains how to use the walk away negotiating strategy in automobile accident cases.

Following are transcripts of the first and third vidoes on this page.

Transcript of Video 1:

We’re frequently asked, how do you go about negotiating an automobile accident settlement with an insurance adjuster? Let me introduce this first, by showing you a little clip. Pawn Stars is a show on the History Channel. If you scroll down, on this page, I have a link to a video from the Pawn Stars, go ahead and watch that, and then, scroll a little bit further, and I’ll pick it up from there.

Transcript of Video 3:

Pawn Stars uses a negotiating style called a unilateral or confrontational negotiating style. This is a type of negotiating style you want to use when you are faced with an adversary or an opponent, so to speak, who you’re trying to negotiate one transaction with. You wouldn’t want to use this in a business setting, where you have an ongoing relationship with another person, for example a vendor, who’s going to be selling you things, but in a situation where you’re just trying to make one transaction and then you’ll be finished, this is a great negotiating style.

Now in a personal injury, or an automobile accident lawsuit or claim, that’s exactly you have. Generally speaking, you only have one claim against one insurance company. If you’re unlucky enough and you get in another automobile accident when you might have two or even more claims, but generally not against the same insurance company. This is the type of negotiating style that will get you the best results. Let me bring reemphasize what they said in that video. Number 1, never take the first offer. I’ve seen numerous cases where insurance cases offer a low-ball settlement first time around. Never take that. Insurance companies are always willing to negotiate. I’ve never had a case yet where they give their best offer the first time out.

Second, be willing to walk away. Now this may not make a lot of sense if you think about it in a context of a personal injury or an automobile accident case. How do you walk away from that? You have no choice, you must deal with that insurance company. The only way to get a settlement is with that insurance company. Let me tell you, the walk away is probably most powerful negotiating strategy that can be used. If you’ve ever been down on a beach in Mexico or a South American country, and you’re trying to negotiate the purchase of something from a vendor on a beach, the walk away is the way to get the best price, same thing with car dealerships.

There’s a ton of examples I can give you where the walk away is powerful, and so how do you apply that in automobile accident case when you’re dealing with an insurance company? Obviously, you can’t completely walk away from the transaction, but let me tell you the walk away that does work, and that is you say, “I’m sorry, I appreciate your efforts in negotiating this, but I’m not happy with the offer that you’ve made, and therefore, I’m taking this to the next level.” So you walk away.

Now, what’s the next level? Generally speaking, that’s filing a claim. Once the claim is filed, you have to negotiate again, if you’re still not happy with the offer, you walk away once more. We’re going to take this through the discovery phase. After the discovery phase is finished, you try to negotiate it again. If you’re happy with the settlement, great, take it. If you’re not happy with the settlement, walk away one more time. We’re taking this to trial.

It’s interesting to me, in my experience as an attorney, it’s been interesting to watch and see how powerful this negotiating strategy is with insurance companies. Insurance companies will increase their offer significantly, to clients who are willing to walk away. In other words, they’re willing to take it to the next step, whether it’s filing a lawsuit, going to the discovery phase, or even going to trial. If you’re willing to do that, you’ll get significantly more for your money and significantly more money in your settlement offer because you are willing to walk away.

Now, if you’re not willing to walk away, you will get a settlement, but the settlement will be much smaller. It’s sometimes easier opposing forces that clients have to deal with, and that is, well, if I walk away, it will take more time to settle my case, and that is true.

Some attorneys compete by saying, we can get a settlement extremely quickly, and that is true. Any attorney can get a quick settlement on a case. In fact, you don’t need an attorney to get a quick settlement. You can get a quick settlement on your own. An attorney can give you some benefit in that situation, because the attorney may be able to speak the insurance adjustor’s language, but the attorney will not get a great settlement, because a fast settlement is completely inconsistent with the walk away, and so if you really want to get a good settlement for your case, you need an attorney to willing to do walk away, that’s willing to take it to the next step.

One thing to ask your attorney, when you’re hiring an attorney in an automobile accident case, is have you taken an automobile accident case to a jury trial? Not to an arbitration. Insurance companies, I don’t think, really respect arbitration. They’re not afraid of arbitration. They will not make great offers for arbitration. The question is, have you taken it to a jury trial. That, a jury trial is the walk away the insurance companies respect. If you’re willing to take it to trial in front of a jury, the insurance company will make a much better offer than under any other circumstances. Good luck with that, and I’ll try to follow up and answer some other questions in the future. Thanks for your time.