Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When you receive an initial settlement offer from an insurance adjuster, it often serves as a starting point for negotiation rather than a final number. In Tennessee, policyholders have the right to counteroffer, provided they understand the legal framework and practical considerations.
Why Counteroffer?
An insurance company’s first offer may undervalue your losses or damages. By preparing a counteroffer, you can:
- Ensure all medical bills, repair costs, and out-of-pocket expenses are covered.
- Account for future expenses, such as ongoing medical treatment.
- Reflect non-economic damages, including pain and suffering.
Legal Context under Tennessee Law
Tennessee law imposes a covenant of good faith and fair dealing in every insurance contract. An insurer may face extra-contractual liability if it unreasonably delays, denies, or underpays a claim. See Tenn. Code Ann. § 56-7-105(a)(2) (link).
While Tennessee does not require you to make a counteroffer, doing so helps establish that you engaged in reasonable settlement discussions. If the insurer continues to undervalue or ignores your documented losses, you may demonstrate bad faith under Tenn. Code Ann. § 56-7-105 (b)–(c).
How to Prepare a Counteroffer
- Review the Policy: Understand your coverage limits, deductibles, and exclusions.
- Gather Documentation: Compile medical records, repair estimates, invoices, and receipts.
- Calculate Your Losses: Total economic damages (medical bills, lost wages, property damage) plus a reasonable figure for non-economic losses.
- Draft a Demand Letter: Clearly state your counteroffer, include itemized expenses, and set a response deadline.
- Use Supporting Evidence: Attach expert reports, like medical opinions or appraisals, to justify higher valuation.
Negotiation Strategy
After sending your counteroffer, expect further communication. Keep responses clear and focused on facts. If negotiations stall or the adjuster declines to engage in fair value discussions, note the insurer’s conduct—this record can support a bad faith claim if necessary.
Helpful Hints
- Send all communications via tracked mail or email to create a paper trail.
- Keep detailed notes of phone calls, including dates, times, and names of representatives.
- Don’t accept the first offer under pressure; insurers often test your willingness to negotiate.
- Consider a medical or property damage expert to strengthen your counteroffer.
- If you face resistance or bad faith tactics, consult a Tennessee personal injury attorney for advice on next steps.