Negotiation is a way of talking your way through a dispute with another party. If you suffered an injury due to the misconduct of someone else, for example, you might negotiate compensation from the at-fault party or their insurance company. It’s not just about facts, although they are critical.
Negotiating skills matter too—more than they ought to, actually. Ultimately, however, most of the negotiation process is knowing how much your claim is worth and being able to back it up with verifiable facts.
Beware: Insurance Companies are Businesses
Unfortunately, insurance companies are not charities whose purpose is to aid injury victims. They are businesses whose purpose is to earn as much money as possible. They earn money when clients pay them monthly premiums. They lose money when they pay personal injury claims.
What that means is that as soon as you suffer an injury for which the insurance company is responsible, an adversarial relationship forms between you and the insurance company. This is the relationship you are going to have to negotiate your way out of.
Maximum Medical Improvement (MMI)
Maximum medical improvement (MMI) is the point in your treatment where your doctor expects no further improvement in your medical condition. Hopefully, that means you have made a full recovery. Often, however, it means permanent disability. Either way, it means your condition has stabilized. MMI is a typical prerequisite to negotiation, since it’s difficult to calculate the amount of your medical expenses, and perhaps your lost earnings, until you reach MMI.
Direct Claims vs. Third-Party Claims
A typical example of a direct insurance claim would be you making a claim against your health insurance provider under the terms of your pre-existing policy with that provider. You would negotiate the amount of your settlement with your health insurance provider.
In a third-party claim, by contrast, you might file a claim against the liability insurer of an at-fault party who injured you through their misconduct. In other words, you would be negotiating against someone else’s insurance provider, not your own.
The Reservation of Rights Letter
A reservation of rights letter is a letter to you from the insurance company responsible for paying your claim. It will state that the insurance company is investigating your claim and that it reserves the right to refuse your claim if it proves meritless. This is perfectly routine. In fact, if you do not receive a reservation of rights letter, it could mean that the insurance company is ignoring your claim, which is not good news.
Calculating Damages
A personal injury claim can generate several different kinds of ‘damages’ (losses), including:
- Economic damages: medical expenses, lost income, out-of-pocket expenses, etc.
- Non-economic damages: pain and suffering, emotional distress, etc.
- Property damage: Your automobile, for example.
- Punitive damages: These are difficult to qualify for, but courts sometimes award them.
Be sure to claim every dime you are entitled to.
Estimated Future Damages
Estimated future damages include future medical expenses, and future lost earnings from diminished earning capacity. “Diminished earning capacity” occurs when a permanent disability inhibits your ability to work or prevents you from working altogether. In this situation, hiring an expert witness to help you calculate your damages years or even decades into the future is critically important. The last thing you need is to run out of money 20 years from now.l
Policy Limits
Maybe your claim is worth a million dollars. But if the policy limit of the insurance policy you’re claiming against is $20,000, that’s all you’re going to get from it. You can, of course, pursue a personal injury lawsuit to seek the full amount of your losses.
The Demand Letter
A demand letter is a formal letter that you send to the opposing party that describes your claim, justifies it, demands compensation, and sets a response deadline. You should have your lawyer draft and sign this letter, and you should include supporting documentation such as medical bills.
Comparative Fault
Under Georgia’s comparative fault law, you can lose part of your compensation if the accident was partly your fault. If you were 50% or more at fault, you would lose your right to compensation. The opposing party will certainly try to exploit this rule.
Lowball Offers and Counteroffers
The opposing party’s first offer will almost certainly be ridiculously low. Don’t panic–just respond with a reasonable counteroffer. This back-and-forth could go on for quite some time.
The Settlement Agreement
Don’t conclude a settlement on a handshake. You need a written settlement agreement approved by your lawyer. Do NOT download a template from the internet and sign it without modifying it for your case. Once both parties sign the settlement agreement, it becomes a binding, enforceable contract.
An Aiken County Personal Injury Lawyer Can Help With the Negotiation Process
One of the best ways that a personal injury lawyer can help you is by sitting down at the negotiating table on your behalf. In a best-case scenario, a personal injury lawyer might multiply the value of your settlement. Under the contingency fee arrangement that our Aiken County personal injury lawyers use, you pay zero legal fees unless you win. Contact us at (803) 226-9089 to schedule a free consultation.
