Negotiating Your Way Through Negotiations with Insurers

Posted 3/11/2010
By Denise Caspersen

Negotiations are a plain fact of doing business in collision repair. Within the business setting, negotiations among vendors, employees, customers and partners occur on a daily basis. There are several key elements to moving a negotiation forward and accomplishing the intended outcome. These guidelines may help you the next time you're at the negotiation table with insurers.

Relationships

"Assumptions are the termites of relationships." - Henry Winkler (aka "Fonzie") from Happy Days, 1974-1984

A foundational element of negotiating is the relationship between individuals. The more positive the relationship, the more likely a successful outcome to any negotiation will result.

Relationships are built on finding common ground and having an understanding of where the other person is "coming from." When a collision repair shop estimator communicates with an insurance adjuster, the common ground is the overall repair. No matter what the skill level is of the adjuster or estimator involved, more can be achieved by allowing for the sympathetic understanding that accident estimation is difficult, requires skill and has limitations. At that point, starting on the same team lends itself to greater respect, improved understanding and a more likely result in achieving the goal of a quality, safe repair with appropriate compensation.

Although this may not remove the discussion to be had regarding parts, repair processes, what is and is not included, a common- ground relationship does provide an opportunity to have equal footing and a firm foundation for just those discussions.

Once the hard discussions start, keep calm and watch your body language. Allowing an individual to speak his or her thoughts, points and suggestions does not mean you are giving in, but it does provide you with more knowledge to then respond to and negotiate from. In this situation, listening may be the hardest part of the process. Try to be welcoming and not cross your arms or close yourself off to the conversation. Any assumptions you bring to the negotiation are your preset inhibitors to success.

Preparation

"If I had eight hours to chop down a tree, I'd spend six sharpening my axe."
- Abraham Lincoln, 16th president of the United States

Preparing for a situation involving negotiations is vital to achieving a safe, quality repair with appropriate compensation. Regardless of the parties you are negotiating with, the greater your level of preparation, the greater the success of the negotiation. When negotiating with insurance adjusters, the more documentation you have on hand and attached to the estimate, the smoother the negotiation process will be.

Write an estimate before the insurance adjuster arrives and provide this along with documentation as a platform for discussion. This does not mean the adjuster will not want to write an estimate but it does continue to place you and the adjuster on a level field for negotiations. See your estimate as the main communication tool between yourself, the customer and the insurance company.

As the expert, you may have the opportunity to take the lead in educating the adjuster in several things: properly documented and necessary repair procedures, new metals found in the repair, necessary steps for new adhesives and necessary welding processes. Remember: The goal is a safe, quality repair with appropriate compensation.

If you are tempted to "show your stuff" and become arrogant, then breathe deeply, allow yourself room to listen and then redirect the tone to an educational one, referencing a third-party informational source. Be prepared to have some less significant areas in mind for compromise. If possible, start with those building on cooperation and the relationship, and then be persistent on the areas you determine to be priority.

ASA member benefit providers such as Airbag Solutions and Alldata are sources for documenting the recommended and necessary repair procedures and parts requirements. ASA also has step-by-step information fliers addressing various refinish processes.

PCM Logic paint and materials calculator is a system for documenting the necessary paint and materials required for any refinish operation. Mitchell International also has a paint and materials calculator available for calculation and documentation. Although the adoption of these types of paint and materials systems is not the norm by insurance providers, the more these systems are used by collision shops and provided as documentation, the quicker the adoption rate will be among insurers.

For several years, ASA has compiled various procedural page not-included items involving Audatex, a Solera company, Mitchell International and CCC Information Services within ASA's Not-Included Charts. With these charts, you are able to quickly see what the difference is between your estimating system and the differing system of the insurance adjuster. These are available on the ASA Web site at www.ASAshop.org within the ASA store. For a small investment, ASA members are able to download the ASA Not-Included Charts and provide them to the members of your shop's estimating team. The charts are also available to nonmembers for a set fee.

Being prepared prior to a negotiation is another step in achieving the goal of a safe, quality repair with appropriate compensation.

Respect

"There is no respect for others without humility in one's self." - Henri Frederic Amiel, Swiss philosopher

Respect adds another cornerstone to the accomplishment of a successful negotiation. We all know that respect for individuals is not a given but respect for the customer, the skill you are providing and the business you work for are key elements in generating respect for any individual coming through your shop doors.

Simple acts of kindness and understanding can build respect between yourself and an adjuster. Realizing that the adjuster is doing a job, dictated by powers other than themselves, allows you the opportunity to communicate from a mutual territory. The courtesy of asking questions and allowing for recommendations demonstrates to others that you respect their input.

During the negotiation process, ask questions, which allow adjusters to demonstrate their level of knowledge. When the knowledge is limited or presents a misunderstanding, take the high road of a mentor and educate based on your skill and available information.

Although you may not agree with the recommendations, you are building respect by listening and searching for understanding. When you approach a situation of negotiation where respect is limited, take a moment to recognize that you do not have to know everything. What is being communicated to you by the other party may lead you down an alternative path in accomplishing the goal of a safe, quality repair with appropriate compensation.

By understanding that the negotiation is not personal, you have a better chance of not becoming emotionally engaged and can remain focused and factual based on your discussion.

If you reach a point where resolution is not likely, have respect for the proper chain of command. Provide documentation, dates, areas of disagreement and any other professional reasons for requesting a review of the claim. When speaking with individuals up the chain of command, remember to demonstrate a level of respect for the original negotiating adjuster and stress the desire to accomplish the goal on the customer's behalf.

Respect is a hard one that grows over time but provides such a strong bond within a negotiation that it is worth developing with every opportunity.

Honesty

"I was brought up to believe that the only thing worth doing was to add to the sum of accurate information in the world." - Margaret Mead, American cultural anthropologist

Approach each negotiation with honesty. If you have a relationship, are prepared and have respect, the honesty element will come naturally and without hesitation. Honesty is in the best interest of every party involved. One of the goals of your relationship with the insurer is to have trust between you and the insurance adjuster. Misinformation, no matter how innocent, can damage your credibility with the insurer, the customer and your shop.

Successful negotiations are not played like a hand of poker; bluffing and hedging your bets will not produce consistent, positive, long-term results. If you feel you are being bluffed or lied to, ask questions, turn back to being a good listener and ask more questions. If there is a bluff or a lie, they will be exposed rather quickly, and you will retain the positive negotiating position.

Be accurate in your description and allow yourself the freedom to say you do not know when you do not have the answer or documentation immediately accessible. Turn your moment of not knowing into a joint research opportunity where you and the adjuster are using your information system, your data system, and your ASA Not-Included Charts as a third-party source of information to build your negotiation.

Patience and Understanding

"All things come to him who waits - provided he knows what he is waiting for." - Woodrow Wilson, 28th president of the United States

An area of the negotiation that takes practice is one of patience and understanding as collision repair shops are required to accomplish a safe, quality repair in the shortest amount of time. Delays affect cycle time, which affects the outcome of the repair, the attitude of the insurer, the shop's key performance indicators and most important of all, the customer.

When patience is required, it is vital here to keep your focus on the long-term goals of your business and your relationships. We have all entered into situations where pressures are motivating a quick response. Insurance adjusters are no different.

Several actions can be taken to generate more patience and understanding within the negotiation. Realize what is and is not in your control. If you are awaiting a response from another party, follow-up, confirming that you are part of the process and willing to supply any missing pieces or answer any outstanding questions. Focus on being a part of the solution. Remember the long-term goal and the long-term relationship. More time on the front end on this particular repair will lend itself to less time in the future and an overall positive effect to your negotiations and financial growth.

"The older I get, the more I see a straight path where I want to go. If you're going to hunt elephants, don't get off the trail for a rabbit." - T. Boone Pickens, American financier

An overarching key to successful negotiations is to remain focused. So often we are distracted by bunny trails as we move down the path of success. We must be willing to accept that not all negotiations will turn out in our favor but if the action was built on a positive relationship with preparation, respect, honesty and patience for the "good," then additional steps will be taken in accomplishing the goal of a safe, quality repair with appropriate compensation.

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