Negotiation & Settlement Processes Flashcards
7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Negotiation & Settlement Processes flashcards as text
When a claimant rejects an initial settlement offer, what is the adjuster's best next step?
Answer: Request a detailed explanation of the claimant's valuation
Understanding the claimant's basis for rejection allows the adjuster to identify gaps and craft a more targeted counteroffer.
What does 'bracketing' mean in the context of insurance claim negotiation?
Answer: Setting high and low anchor points to guide settlement toward a midpoint
Bracketing involves offering a range where both parties' positions overlap, steering the negotiation toward a mutually acceptable midpoint.
A claimant's attorney sends a demand letter with a 30-day deadline. What should the adjuster do first?
Answer: Log the deadline, review coverage, and begin evaluation immediately
Timely response to demand letters is critical to avoid bad faith exposure; the adjuster must log the deadline and begin substantive review.
Which negotiation technique involves the adjuster deliberately pausing after presenting an offer?
Answer: Silence as leverage
Silence after an offer creates psychological pressure on the other party to fill the void, often prompting concessions.
What is a 'Mary Carter agreement' in the context of multi-defendant claims?
Answer: A settlement where one defendant secretly pays the plaintiff while remaining a nominal defendant
A Mary Carter agreement allows one defendant to settle privately while appearing to remain in litigation, which can affect the dynamics of the remaining case.
When is it appropriate to invoke a 'reservation of rights' letter during settlement negotiations?
Answer: When coverage questions exist but the insurer is still investigating
A reservation of rights letter protects the insurer's ability to deny coverage later while still allowing the investigation and negotiation to proceed.
What is the purpose of a 'high-low agreement' in litigation-phase settlements?
Answer: To guarantee a minimum recovery for the plaintiff and cap the defendant's exposure regardless of verdict
A high-low agreement caps the insurer's maximum payout and guarantees the claimant a minimum amount, reducing risk for both parties.