Everything's Debatable

by Mark Goldwich

With the first round of GOP Presidential debates behind us, and in the shadow of the Iran Nuclear

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“deal”, I thought this would be a good time to write about debating and negotiating, and how it relates to insurance.

For me, the word “debate” is just fancy-speak for “argument”. Debaters are people who purport to be knowledgeable on a subject that present opposing viewpoints. The main difference is debates are planned, moderated, and  usually conducted with rules or conditions. Arguments are not nearly as formal, and can break out pretty much anytime. Still, it comes down to two or more people with opposing positions, trying to state their case effectively, so as to sway the other side, or the audience.

Negotiations are not much different either. Two or more sides come together with the hopes of reaching an agreement, or common ground, to establish an outcome. In the process, the parties argue (or debate) their positions to reach an agreement satisfactory to them. Early in my adjusting career I was taught the definition of a negotiated agreement was one in which “all parties are satisfied, but none are happy”. In other words, everyone gives up more than they wanted to, but they get enough to make the agreement, or take the deal. I was also taught that there were proven techniques and strategies that could be employed when negotiating. Once of my first supervisors strongly recommended I buy a book called “You Can Negotiate Anything” by Herb Cohen. This was over 25 years ago, but I still remember it, and it gave me a foundation for thinking differently about negotiating. And it didn’t just apply to insurance, as the title implies. It applied to just about anything.

As we saw in the presidential debates, even parties on the same “side” can disagree substantially, and

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occasionally an “argument” breaks out. And as we saw following the Iran negotiations, there can be significant differences of opinion on whether or not one party gave too much, and got too little.

But back to insurance. With insurance, you can’t negotiate when you enter an agreement to pay an insurance company to insure your property (or your life or health, for that matter). And remember, insurance – while often described as a “product” – is actually a legally binding contractual relationship. But with one major difference than most other contracts you enter into. When you agree to contract for insurance, you have no say in the wording of the policy. It is a unilateral contract – the insurance company writes the policy/contract, and you either accept it or you don’t. For the most part, this is not a good thing, with one main exception. Typically, if there is a dispute regarding the language of the policy, courts will generally rule in favor of the party that did not have a say in writing the contract.

Now, while you might not have a say in how the policy contract is written, you do have a say in what you get paid should you have a claim (shhhh, don’t let the insurance company know – they are under the impression that they get to tell you what they are going to pay, and you just have to accept it). 

Why do they think this way? Because in nearly all cases, insureds accept whatever the insurance company offers them. After all, who usually knows more about insurance and estimating damages, the insurance company or the insured? Who sends out a professional, licensed insurance adjuster, well versed in what they will and will not pay for? Who follows this process up with a letter on official letterhead that includes language from the actual insurance policy? Who has consultants, engineers, and attorneys at the ready, and depending on the insurance industry for their very livelihood? And who handles tens of thousands of claims each and every year, the insurance company or the insured? Of course, the insurance company has a huge advantage throughout the process.

But that does not mean you can’t negotiate an insurance claim, or renegotiate a previous insurance

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claim, and get a better “deal”. In fact, that’s exactly what we do every day for people. Even people who are educated, or business savvy, or whatever, tend to do poorly when it comes to dealing with their insurance company. It is simply because they are not skilled in negotiating with insurance adjusters.

This may be confusing because on the one hand I said negotiating is simply arguing or debating your position to reach an agreement. But remember, to do this effectively, you have to be knowledgeable on the subject, and in the case of insurance claims, the subject can be obscure, unfamiliar, technical, and if you’ve ever read an insurance policy cover to cover, quite convoluted. This is why professional public adjusters tend to fare much better at negotiating insurance claim settlements with company adjusters. We are familiar with policy language, construction, basic engineering, construction codes and standards, and while we are not lawyers, we are trained on applicable rules, laws, and legal cases. We also spend each day immersed in the process of adjusting and negotiating claim settlements. For the most part, we know what the insurance company adjusters know (sometimes more), putting us on a level playing field, which is a tremendous advantage when it comes to negotiating any agreement.

What are some other ways to gain advantage in an insurance claim negotiation? There are many, but

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being educated on the subject is certainly a great start.  I would suggest you remain calm, and not be emotional, but be able to use emotion to bring the other party to your side. Instead of screaming at an adjuster about how you are tired of living with the damage, calmly describe how it affects your children, your spouse, or your ability to eat or sleep. Describe what you are enduring so they can picture having to go through that experience themselves.

Don’t negotiate with yourself. Typically, this means you don’t make the first offer, and you don’t make two consecutive offers in a row. But once the insurance company has presented their offer, don’t expect them to make another offer simply because you rejected the first (they know that trick).

Stay in the real world. Don’t exaggerate figures or make unreasonable demands, just because you believe their figure or offer is unreasonably low.  Take the time to really listen to the other side. Show them that you are considering their position, and not dismissing them. Reiterate their points back to them, letting them know you heard them, before replying with your counter-points. Then, see if you can find areas of common ground.

Ask to speak to someone higher up the chain of command. The further up you can go while making reasonable arguments, the better your chances they will contact their subordinates and ask them to resolve this so you won’t keep calling them. Obviously, they expect this, and will resist, but you can persist and respectfully insist. If the claim supervisor won’t talk to you, ask for the claim manager, or the vice president of claims, or the owner of the insurance company. It will not always work, but it does work.

When negotiating directly with someone, don’t feel compelled to fill moments of silence. For some

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reason, most people dislike “dead air” time. Control yourself. Quickly filling the gaps with more words is a sign of desperation.  Be willing to suspend the negotiations for another day, or walk away altogether. This again shows you are confident in your position, as opposed to being weak. As has been pointed out with regard to the recent Iran proposal, a bad deal is worse than no deal at all. Follow up verbal negotiations in writing, memorializing the discussion. Naturally, you will want to spin this correspondence in a way favorable to you, but without completely distorting it – you want to maintain your credibility throughout the negotiations.

Don’t go into the negotiation with concrete expectations of absolute victory. Imagine the worst outcome, and consider the lowest amount you would accept. Then ask yourself,” if they offer me one single penny less, would I walk away?” If the answer is “no”, you need to reconsider the lowest amount you would accept, and then ask yourself that same question again and again until you are certain you would walk away without a deal. That’s your bottom line.

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Never begin your negotiations with your bottom line, and don’t be afraid to state a higher figure is your bottom line, even if it isn’t. Using this card too often will damage your credibility.

Finally, assume the other party knows these tactics and strategies as well (and maybe more). Negotiation is like a dance – dress well, learn the steps, perform with confidence, and you should be fine. And when all else fails, hire a professional.

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.