Should I Prepare and Present a Counteroffer to an Insurance Adjuster’s Initial Settlement Proposal?
Detailed Answer
When you receive an insurance adjuster’s first offer, it often represents a starting point, not a fair market value for your claim. In Montana, you can—and usually should—respond with a counteroffer. This can help protect your rights and maximize recovery within Montana’s legal framework.
1. Understand the Adjuster’s Role and Your Rights
Insurance adjusters have a duty to investigate and negotiate claims in good faith under Mont. Code Ann. § 33-18-201. They often start with a lowball offer to gauge your willingness to settle quickly. Responding with a counteroffer signals that you are informed and prepared to prove your damages.
Key statutes:
- Mont. Code Ann. § 33-18-201 – Prohibits unfair claim settlement practices.
- Mont. Code Ann. § 27-1-211 – Governs offers of settlement (offer of judgment rules).
- Mont. Code Ann. § 27-2-204 – Sets a three-year statute of limitations for personal injury actions.
2. Gather Evidence to Support Your Counteroffer
Before you draft your demand, compile documentation:
- Medical records and bills.
- Repair estimates or receipts for property damage.
- Proof of lost wages (pay stubs, employer statements).
- Photos of injuries or accident scene.
- Expert opinions or reports, if applicable.
3. Drafting an Effective Counteroffer
Structure your counteroffer letter clearly:
- Reference the insurer’s initial proposal and your claim number.
- Summarize your key damages and cite supporting documentation.
- State your demand amount with a deadline for response (usually 30 days).
- Reserve your right to pursue litigation if the insurer does not respond or rejects your demand.
4. Leverage Offer-of-Settlement Rules
Under Mont. Code Ann. § 27-1-211, if you serve a formal settlement offer at least 30 days before trial and the insurer fails to beat it, you may be entitled to recover your attorney fees and costs from the date of the offer. This can incentivize the insurer to negotiate seriously.
5. Benefits and Pitfalls
Benefits of presenting a counteroffer:
- Sets a negotiation anchor higher than the initial offer.
- Demonstrates your knowledge and documentation of damages.
- Preserves leverage for an insurer to settle rather than risk litigation.
Potential pitfalls:
- Overstating damages without evidence can weaken credibility.
- Missing the statute of limitations (Mont. Code Ann. § 27-2-204).
- Letting deadlines lapse before engaging legal counsel, if needed.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney to discuss the specifics of your situation.
Helpful Hints
- Always respond in writing, even if you call the adjuster first.
- Keep detailed notes of all communications with the insurer.
- Be polite but firm—negotiations can be lengthy.
- Consider hiring an attorney if the insurer refuses to negotiate in good faith.
- Track deadlines for offering a settlement and filing a lawsuit in Montana.