Some people believe that the best way to start a negotiation is by making a lowball offer. The idea is that you’ll end up with more money than if you had started high and negotiated down. However, this tactic can backfire in some cases.
Many times, it’s better to make an opening offer at par with the actual valuation of the object being negotiated over – as long as there’s room for movement on either side. If not, it may be worth starting negotiations at a higher price point so that both sides have room to move towards each other without feeling like they’re moving too far from their positions right off the bat.
Here are three reasons why you should refuse the insurance company’s first offer:
1) The insurance company’s first offer is likely the lowest they are willing to go.
Insurance companies know that it costs more money for them to settle with them instead of going through a lawsuit, so they will start low to get their settlement without much hassle.
2) The insurance company’s first offer may not be in line with the actual value of your claim.
Maybe you weren’t wearing a seatbelt and think it should have been noted on the accident report, or there was some other circumstance surrounding the car crash that wasn’t considered when they made their initial settlement proposal. If you have a legitimate case, you shouldn’t accept the company’s first offer.
3) The settlement may not be what you want.
Insurance companies are in the business of making money by settling claims as quickly and cheaply as possible, so they will tend to offer a low amount for your case.
Suppose you don’t have an attorney that can negotiate for you. In that case, the insurance company’s first offer is likely going to be the best you’re going to get.
However, if your case is worth more and the insurance company’s first offer doesn’t reflect that value, it may be worth looking for a different settlement proposal. You can talk to a skilled personal injury lawyer or law firm like Brach Eichler Injury Lawyers to help you in this regard.