The settlement offer normally comes at the end of negotiations. The negotiations begin after the adjuster has completed an investigation and has received a demand letter.

Facts studied by adjuster, before making initial offer

• Total for the claimant’s medical expenses
• Claim for lost wages
• Witness statements
• Police report
• Proof of property damage

Adjusters use the collected facts to determine the claim’s value

Some companies determine that value by utilizing the per Diem method. That assigns a single value to each day of the claimant’s recovery period. That assigned value is then multiplied by the number of days that it took for the claimant to recover. Insurers might struggle to come up with the value of a single day, or the exact length of the recovery period.

Other companies rely on the numbers obtained by utilization of the multiplier method. That requires selection of a number that can represent the nature and severity of the claimed injuries. When claimants have sustained catastrophic injuries, that number is 5 or more. For minor injuries, it becomes 1.5.

The numerical representation for the injuries’ nature and severity becomes one factor in a multiplication operation. The other factor is the total for the medical expenses. The Personal Injury Lawyer in Fort Erie knows that the result of the multiplication operation represents the injuries’ estimated value.

A growing number of companies have elected to use a computer program. That alters the value of the injury in accordance with the type of treating doctor that was chosen by the patient/claimant.

Other considerations that influence the adjuster’s thinking

Considers the chances that the outcome for the filed claim could get decided in a courtroom. Thinks about what verdict a jury might deliver, if the case were to go to court. The insurance company checks to see whether or not the claimant has hired a lawyer. Claimants without legal representation are more apt to accept a smaller settlement offer.

Checks to see if the defense could include a charge of shared fault. That would allow for presentation of a lower initial bid. Studies and responds to the claims in the demand letter. Feedback from the response could indicate the best size for the initial settlement offer.

Adjuster speaks with supervisor

Learns from supervisor what percentage of the claim’s calculated value should be used for calculating the size of the opening bid. That calculated opening bid must serve as the initial settlement offer. In order to keep the negotiations going the claimant would need to answer that same offer/bid with a counter offer.

Following an exchange of offers and counteroffers, the opposing parties agree on one figure. Over the phone, a decision would be made to have that discussed figure represent the size of the agreed-upon settlement, the amount owed the claimant.