How do you respond to a lowball offer from an insurance company? (2024)

How do you respond to a lowball offer from an insurance company?

Within the letter, you can indicate that you reject the offer and highlight why you deserve a higher settlement amount. You should also counter their reasons for offering the lowball initial offer. Your explanation behind these reasons can be critical in getting a better second offer from the claims adjuster.

Within the letter, you can indicate that you reject the offer and highlight why you deserve a higher settlement amount. You should also counter their reasons for offering the lowball initial offer. Your explanation behind these reasons can be critical in getting a better second offer from the claims adjuster.

Getting an offer from a liability insurance company means they've concluded that someone they sold insurance to is liable for your losses. They quickly offer you a lowball settlement in hopes that you'll take it before you learn from a lawyer what your claim is really worth. Don't fall for lowball offer tactics.

State the settlement offer you are willing to accept and the reasons why. You can repeat the position you stated in the first demand letter. Your attorney can advise you on whether you should stick with the amount stated in your first demand letter or if you should present a counteroffer.

It's okay to make a counteroffer when an insurance company offers a settlement, but you have to make an educated decision before moving forward. These are some of the questions you should go over with your attorney: Is the counteroffer a sufficient settlement offer?

Acknowledge it's a low ball offer

Don't respond immediately; instead, let them know you'll get back to them. Then consider what tactic could work best. One approach is to simply say that you're willing to negotiate, but that you need to hear a serious starting offer.

Keep your message concise, clear, and respectful. Briefly explain that you have carefully considered the offer but have decided to pursue other opportunities that better align with your career goals and compensation expectations. Maintain a positive tone by expressing your willingness to stay connected.

However, if you're interested in grabbing a bargain and becoming a homeowner for financial reasons (and are less invested in which house you own), a low offer could be the right option for you. Consider making an offer that hovers 25% below the asking price—and see what happens.

Why is the first settlement offer so low?

An insurance adjuster's first offer might be intended to reach a quick settlement and limit the insurance company's liability. Insurance companies know that if you're coping with serious injuries and feeling financial stress, you might accept a lower settlement amount to resolve the matter quickly.

There are two ways insurance companies can end a customer's policy: through non-renewal or cancellation. Non-renewal means the insurance company will see out the rest of your policy term but let you go as a customer after that.

Always reject a settlement offer in writing. Type a letter to your contact at the insurance company listing the reasons you think that their offer is too low. Back up these reasons with concrete evidence attached to the letter. Finally, provide a counteroffer of a sum you think is more reasonable.

Rather, ask why the adjuster has provided this extremely low figure. You should then write a formal letter of response in which you state that you don't find the initial low settlement offer acceptable, listing the reasons why and concluding with a demand for a higher settlement offer.

Many insurance adjusters will lowball you on non-economic damages. That's because they don't have a set dollar amount attached, unlike economic damages. Ask the adjuster which multiplier they used for non-economic damages (this multiplier ranges from 1.5 to 5).

Speak with a Car Accident Lawyer: Seek legal counsel to understand your options and potential legal action. File a Complaint: If necessary, file a complaint with the insurance company or regulatory authorities. Don't Settle for Less: Refrain from accepting a low settlement offer without proper evaluation.

Try to stay level-headed. Keeping the conversation polite and respectful will improve your chances of reaching agreement. It is also important that you take time to prepare yourself before those negotiation talks begin. Good preparation will give you more confidence going into mediation or settlement discussions.

The rule of thumb when you negotiate salary with a counteroffer is between 10% and 20% of the offer amount. If you like the job and would accept the first offer rather than pass on the job, a counteroffer of 10% to 15% above the initial offer is not too aggressive.

What happens if insurance doesn't want to settle?

When an insurance company refuses to settle, it may be liable for the full amount of the excess judgment after trial, notwithstanding the lower policy limits. This duty of good faith aligns the insurance company's incentives with those of its insured.

It would be best if you did not accept a counteroffer when it is more than the salary you are unhappy with, when the job does not have room for promotions, and when the career does not fit your long term goals.

Accept that the offer is low-ball

Consider what strategy might work best. You can say you are willing to negotiate but you want to hear an offer that is serious. Another avenue is to make a counter-offer that is a price slightly below your asking price, even if it's just $1,000 less.