negotiating with insurance companies

6 Tips for Presenting a Persuasive Settlement Proposal

negotiating with insurance companiesYour case is ripe for settlement. How do you bring all the disparate elements – the facts, the evidence, the legal arguments – together in one persuasive settlement package? Here are 6 tips from veteran insurance insider, Joseph Vaccaro, excerpted from his book, Negotiating With Insurance Companies:

1. Remember your audience.

Imagine a claims adjuster who is handling 150 to 200 claims at any given time. She may receive five or six settlement proposals in a one- or two-week period. The first thing that adjuster is going to do on Monday morning is flip through the stack of proposals on her desk and pick out the ones that are the easiest to review. Those that are going to take more time, because they were poorly packaged, will go to the bottom of the stack.

2. Grab the adjuster’s attention on the first page.

The first page to page-and-a-half of your settlement proposal letter should be a succinct statement of what you want and why you want it. Your first few paragraphs should set forth: (a) the amount of your settlement proposal; (b) a brief discussion of the liability issue(s); and (c) a brief summary of the injuries and damages. This format allows the adjuster to quickly determine whether she needs to review the entire file or can simply begin negotiations because the proposal is within the reserves posted on the claim.

3. Do not address potential problems with your case unless . . .

Once you have summarized what you want and why you want it, use the body of your letter to fill in the relevant details. Do not, however, create a problem where one does not (yet) exist. Even if you see an issue with a certain aspect of your case that may need to be explained at some future time, don’t address that issue unless the insurance company has already raised it. The insurer may not recognize it, and your calling attention to it will only lead down a path that is contrary to your goal – settling the case in your client’s best interests, for as much as possible.

4. Consider sending an audio/video proposal in big-dollar cases.

Cases involving multi-million dollar damages typically are reviewed by upper management and high-level claims committees. Consequently, these big money cases usually end up with the “ivory tower types,” individuals with no prior exposure to the claim, whose only knowledge of the claimant is what they read in a claims file. A well-crafted DVD settlement proposal can bring your case to life for these “ivory tower types” in a much more human way than any written report or proposal can.

5. Do not send an audio/video proposal unless . . .

Before you decide to package and send your settlement proposal on a DVD, rather than in printed form, you must: (a) call the adjuster and confirm that a DVD is acceptable (if not preferable); and (2) edit your proposal so that it is limited to 20 to 30 minutes or, in exceptionally complex cases, 60 minutes, at the absolute most. If you can make it shorter, that’s even better.

6. Set a response time and follow up.

In most cases, it is reasonable to request a response in three weeks. If you have not heard anything by the deadline, follow up with a letter and a phone call to the adjuster. Another way to approach this is to call the adjuster a few days after you send your settlement proposal; use this phone call to confirm that the adjuster received the proposal, and ask how long it will take to get back to you. Follow this phone call with a short, friendly letter memorializing the response time. If the adjuster does not respond by the date he promised, you already have laid the groundwork for a follow-up phone call.


Joseph L. Vaccaro has 40+ years of insurance claims handling experience, including 11 years with one of the country’s largest carriers. During the 28 years following, he worked for two prominent plaintiff’s law firms as head of their pre-litigation departments. He has since started his own consulting firm, where he counsels attorneys in the areas of insurance coverage analysis, insurance bad faith analysis, and mediation/negotiation strategies. He also provides expert witness services on behalf of policyholders.