Settlement Negotiation Tactics Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Settlement Negotiation Tactics flashcards as text
In the context of claims settlement, what is 'structured settlement' most appropriate for?
Answer: Claims involving ongoing medical needs, minors, or large long-term damage awards
Structured settlements are best suited for cases with ongoing medical needs, future lost wages, or large awards where periodic payments serve the claimant's long-term interests.
What is the primary purpose of a 'high-low agreement' in settlement negotiations?
Answer: To set minimum and maximum recovery limits regardless of verdict outcome
A high-low agreement caps the defendant's maximum exposure and guarantees the plaintiff a minimum recovery, eliminating the risk of extreme verdict outcomes.
During mediation, the mediator proposes a 'mediator's proposal' after impasse. What does this mean?
Answer: The mediator suggests a specific settlement number that both parties accept or reject privately and simultaneously
A mediator's proposal involves the mediator suggesting a number that both parties accept or reject simultaneously in private, removing the stigma of being the first to compromise.
Which of the following BEST describes the 'reservation price' in settlement negotiations?
Answer: The minimum or maximum amount a party will accept before walking away
The reservation price is the walk-away point—the least favorable settlement a party will accept before preferring to litigate.
A claimant's attorney sends a time-limited policy limits demand. What is the CRITICAL first step for the claims professional?
Answer: Request an extension and inform the insured of potential exposure
The claims professional must evaluate the claim, document findings, and notify the insured of potential excess exposure before or concurrent with the response.
What is 'concession patterning' designed to signal in a settlement negotiation?
Answer: The pace and size of moves communicate how close a party is to their limit
Decreasing concession sizes signal that a party is approaching their limit, while consistent concessions suggest room remains, making the pattern strategically important.
Under what circumstances is it appropriate for a claims professional to negotiate directly with a represented claimant rather than their attorney?
Answer: Only if the attorney provides written consent or withdraws from representation
Directly contacting a represented party without their attorney's consent violates professional ethics rules and can expose the insurer to bad faith claims.