How to Negotiate with your Insurance Company

Filing an insurance claim on your house can be one of the most stressful and frustrating experiences about home ownership, or adulthood in general. It’s easy to feel overwhelmed by the scope of the project and intimidated by adjusters and insurance agents who handle these cases every day, and have an advantage over you.

But with a little patience, you can get a fair deal — or better.

Here is how to negotiate with your insurance company.

Understand this is a Negotiation

You’re used to negotiating when you buy a car or shop for handbags from street vendors in second-world countries, but an insurance claim?

Make no mistake: When you make an insurance claim, you have entered into a negotiation, and your goal is to win this negotiation. Think of the insurance company’s initial settlement offer as the starting point in that negotiation. And know that the insurance adjuster handling your case submits that initial offer with the expectation that you will make a counter offer. In many cases, they’ll be offering you half of what they’ve already been approved to give you, and hoping you’ll just accept the offer and move on.

Know that They Can Lie

Did you know it’s legal for the police to lie to you? Well it’s the same with insurance adjusters. For example, the adjuster may say something like, “this has to be approved by management,” or “that aspect of the claim is not negotiable.” Neither of these things is likely to be true. Everything is negotiable, and adjusters typically enter negotiations with lots of wiggle room to settle the claim. If they exceed that, they may need approval, but that won’t be happening after your initial counter.

Don’t Get Mad

There is a good chance the insurance company’s first offer is going to be hilariously low. If a lawyer got involved, it might be 10 percent of the actually approved number. If not, it might still only be 50 percent. Don’t blow your top. A good strategy in a negotiation of any kind is, if you suspect your opponent is lowballing you, is to dismiss their offer out of hand, and say something like, “We both know that’s not a serious offer,” and leave it at that. It resets the negotiation, and puts you in more of an offensive position.

Document Your Claims

Typically, a claim will be itemized. A flood claim, for example, will usually have hundreds of individually appraised items on it. It’s tedious, sure, but you can challenge the insurance company’s valuation of any or all of those items. To be convincing, you’ll need some kind of documentation, which is where receipts and things like used-market sales prices can help. If they say your table is worth $100, but you found one on Craigslist in similar condition for $300, you have a good chance of meeting somewhere in the middle.