Insurance buyouts refer to a decision by an insurance company to provide a single, lump-sum settlement to end a claim, often in lieu of incremental future payments. The term can apply to total-loss auto claims, disability insurance policies, and a number of other insurance situations. Though the details will vary depending on the type of settlement you are seeking, the general process remains consistent across the board.
Compare the insurer's offer with what you would consider acceptable. If the dollar difference is small, you can likely negotiate it yourself. For large dollar differences or where you must relinquish rights as a result of acceptance, you may want to hire an attorney.
Hire an attorney, if necessary. Insurance companies deal with situations like yours every day, and have attorneys working for them. Having an experienced attorney on your side can help you achieve your goal.
Gather applicable market data. For disability buyout situations, you want data regarding life expectancy and mortality, as well as the expected duration of the claim and the policy. For auto losses, the data should concern current retail or resale values of similar vehicles.
Present the data to your adjuster in a way that emphasizes the cost-effectiveness of your proposed settlement. For a disability buyout, your data should support why a lump-sum settlement now is cheaper for the insurer than a series of incremental payments. For auto buyouts, your data should demonstrate the validity of the price you are seeking, showing the insurer that it is not cost-effective to take further actions like hiring appraisers or going to court.
Be prepared for a counter-offer from your insurer. If your data truly supports the price you are seeking, stand firm in your demand. Insurers lose money when claims are not settled quickly.
Ask for the settlement offer in writing before signing anything or cashing any checks.
When you have reached an agreeable settlement amount, sign the necessary paperwork and collect your money.
Don't ask for more than your data supports. The insurance company has data of its own to back up the offer it made to you. Asking for settlement amounts you cannot support only decreases your chances of a successful negotiation.
Your adjuster is trained to handle situations like this all the time and knows much more about your situation than you do. While hiring an attorney prematurely can halt a negotiation, sometimes it is necessary in order to keep the insurer from taking advantage of you. Don't negotiate large dollar amounts alone unless you know what you are doing.
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