RESPONSE TO LOWBALL INSURANCE SETTLEMENT OFFER

SENDER INFORMATION

[YOUR NAME / LAW FIRM NAME]
[ADDRESS]
[CITY, STATE ZIP CODE]
[TELEPHONE]
[FAX]
[EMAIL]

DATE: [DATE]

VIA: ☐ Certified Mail, Return Receipt Requested
☐ Email to: [EMAIL ADDRESS]
☐ Facsimile to: [FAX NUMBER]
☐ Overnight Delivery

RECIPIENT INFORMATION

[INSURANCE COMPANY NAME]
[CLAIMS DEPARTMENT]
Attn: [CLAIMS ADJUSTER NAME]
[ADDRESS]
[CITY, STATE ZIP CODE]

CLAIM IDENTIFICATION

RE: REJECTION OF INADEQUATE SETTLEMENT OFFER AND COUNTEROFFER

Claim Number: [CLAIM NUMBER]

Dear [CLAIMS ADJUSTER NAME]:

I am in receipt of your settlement offer dated [DATE] in the amount of $[OFFER AMOUNT] for the above-referenced claim. After careful review, I must respectfully reject this offer as it is wholly inadequate and does not represent a good faith attempt to settle this claim fairly.

I. REJECTION OF OFFER

Your offer of $[OFFER AMOUNT] is rejected for the following reasons:

A. The Offer Is Substantially Below the Actual Value of the Claim

Your offer represents only [PERCENTAGE]% of the actual documented value of this claim.

B. Specific Objections to Your Valuation

☐ Property Damage Claims:

☐ Your estimate fails to include necessary repairs for: _______________________
☐ Your estimate uses inadequate materials/methods that do not restore to pre-loss condition
☐ Your estimate improperly applies depreciation to: _______________________
☐ Your estimate uses labor rates below market rates in this area
☐ Your estimate fails to account for code upgrade requirements
☐ Your adjuster did not physically inspect the property / conducted inadequate inspection
☐ Other: _______________________

Specific objections:

_____________________________________________________________________________

_____________________________________________________________________________

☐ Personal Injury Claims:

☐ Your offer fails to adequately compensate for medical expenses totaling: $[AMOUNT]
☐ Your offer fails to adequately compensate for lost wages totaling: $[AMOUNT]
☐ Your offer fails to adequately compensate for pain and suffering
☐ Your offer fails to account for future medical treatment
☐ Your offer fails to account for permanent impairment/disability
☐ Your liability assessment is incorrect because: _______________________
☐ Other: _______________________

Specific objections:

_____________________________________________________________________________

_____________________________________________________________________________

☐ Other Claims (Business Interruption, Contents, etc.):

☐ Your valuation methodology is flawed because: _______________________
☐ Your offer excludes covered items: _______________________
☐ Your depreciation calculations are incorrect because: _______________________
☐ Other: _______________________

Specific objections:

_____________________________________________________________________________

_____________________________________________________________________________

II. DOCUMENTATION SUPPORTING ACTUAL VALUE

The actual value of this claim is supported by the following documentation:

☐ Independent contractor estimate(s) from [CONTRACTOR NAME(S)]: $[AMOUNT]
☐ Independent appraisal from [APPRAISER NAME]: $[AMOUNT]
☐ Medical bills and records totaling: $[AMOUNT]
☐ Physician statement regarding treatment/prognosis
☐ Lost wage documentation: $[AMOUNT]
☐ Receipts and invoices: $[AMOUNT]
☐ Photographs documenting damage/injuries
☐ Expert report from [EXPERT NAME]
☐ Comparable sales/market data
☐ Other: _______________________

Summary of Documentation:

_____________________________________________________________________________

_____________________________________________________________________________

Copies of supporting documentation are enclosed / have been previously provided on [DATE].

III. IMPROPER PRACTICES IN YOUR VALUATION

Your lowball offer appears to result from the following improper practices:

☐ Failure to conduct adequate investigation
Your adjuster [DID NOT INSPECT / CONDUCTED ONLY CURSORY INSPECTION] of the loss.

☐ Use of biased or unqualified estimators
Your estimate was prepared by [NAME/COMPANY] who [DESCRIBE BIAS OR LACK OF QUALIFICATION].

☐ Improper depreciation
You have improperly depreciated [ITEMS] that should not be depreciated / depreciation was calculated incorrectly.

☐ Failure to consider all damages
Your estimate fails to include [LIST EXCLUDED ITEMS/DAMAGES].

☐ Use of below-market rates
Your estimate uses [LABOR/MATERIAL] rates that are below the prevailing market rates in this area.

☐ Misapplication of policy provisions
You have incorrectly interpreted [POLICY PROVISION] to reduce the claim value.

☐ Ignoring submitted documentation
You have failed to consider [DOCUMENTATION] that was submitted on [DATE].

☐ Other improper practices:
_______________________

IV. LEGAL NOTICE REGARDING BAD FAITH

Please be advised that making a settlement offer that is substantially below the actual value of a claim may constitute bad faith and a violation of the [STATE] Unfair Claims Settlement Practices Act.

Specifically, [STATE] law prohibits:

☐ Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. [CITATION]

☐ Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered. [CITATION]

☐ Attempting to settle a claim for less than the amount to which a reasonable person would believe they were entitled. [CITATION]

If this claim is not resolved fairly, I reserve the right to pursue all available remedies, including:
- Filing a complaint with the [STATE] Department of Insurance
- Initiating litigation for breach of contract and bad faith
- Seeking compensatory damages, statutory penalties, and punitive damages
- Seeking recovery of all attorney's fees and costs

V. COUNTEROFFER

Rather than reducing my claim to meet your inadequate offer, I am providing the following counteroffer:

A. Demand Amount

Based on the documented value of this claim, I demand payment of:

This amount represents [a modest reduction from / the full value of] my documented claim in recognition of the costs and uncertainty of litigation.

B. Settlement Terms

This counteroffer is contingent upon the following terms:

☐ Payment within [NUMBER] days of acceptance
☐ Full and final release of all claims related to this loss
☐ No admission of liability by either party
☐ Confidentiality of settlement terms
☐ Other: _______________________

C. Deadline for Response

This counteroffer remains open for acceptance until [DATE], which is [NUMBER] days from the date of this letter.

If I do not receive a meaningful response by that date, I will consider negotiations to have failed and will pursue other remedies.

VI. REQUEST FOR INFORMATION

If you continue to dispute the value of this claim, please provide:

☐ A detailed, itemized explanation of your valuation methodology
☐ The qualifications of the person(s) who prepared your estimate
☐ All documents and information you relied upon in reaching your valuation
☐ The specific policy provisions you believe support your position
☐ Any comparable sales, market data, or other objective support for your valuation

VII. ALTERNATIVE DISPUTE RESOLUTION

If we cannot reach agreement through direct negotiation, I am willing to consider:

☐ Appraisal (if available under the policy)
The policy provides for appraisal at [POLICY SECTION]. If you wish to invoke appraisal, please provide written notice as required.

☐ Mediation
I am willing to participate in mediation with a mutually agreeable mediator to attempt to resolve this dispute.

☐ Arbitration
[If applicable under policy or by agreement]

VIII. RESPONSE REQUESTED

Please respond to this letter by [DATE] with one of the following:

1. Acceptance of my counteroffer of $[AMOUNT];

2. A substantially increased offer with detailed justification for any remaining differences; or

3. A request to invoke appraisal or mediation.

I remain willing to resolve this claim fairly and without litigation, but I am not willing to accept an offer that does not reasonably compensate for my documented losses.

Sincerely,

_________________________________
[YOUR NAME]
[ADDRESS]
[PHONE]
[EMAIL]

cc: [ATTORNEY NAME, if represented]
[STATE DEPARTMENT OF INSURANCE, if filing complaint]

Enclosures:
☐ Independent estimate(s)
☐ Medical records/bills
☐ Lost wage documentation
☐ Photographs
☐ Other supporting documentation

STATE-SPECIFIC NOTES

CALIFORNIA

• Ins. Code § 790.03(h)(5): Insurers must attempt good faith settlement when liability is clear
• Ins. Code § 790.03(h)(6): Cannot compel litigation by offering substantially less than recovery
• Breach of implied covenant of good faith provides remedy
• 10 CCR § 2695.7(g): Must provide itemized written explanation of basis for settlement offer
• Punitive damages available with malice, oppression, or fraud

TEXAS

• Tex. Ins. Code § 541.060(a)(2): Cannot fail to settle in good faith when liability is clear
• Tex. Ins. Code § 541.060(a)(3): Cannot compel litigation by offering substantially less
• Treble damages available for knowing violations
• Chapter 542 prompt payment penalties may also apply
• 18% interest penalty for delayed payment after acceptance

FLORIDA

• Fla. Stat. § 626.9541(1)(i)3: Must attempt good faith settlement when liability clear
• Civil Remedy Notice (§ 624.155) required before bad faith lawsuit
• 60-day cure period after CRN filing
• Appraisal commonly available for property claims
• Damages may exceed policy limits in bad faith cases

NEW YORK

• Ins. Law § 2601(a)(4): Must attempt good faith settlement when liability clear
• No private right of action under § 2601
• Pursue through breach of implied covenant
• General Business Law § 349 may provide additional remedy
• Appraisal available in most property policies

NEGOTIATION TIPS

1. Do not drastically lower your demand in response to a lowball offer. A small reduction (5-10%) maintains your position while showing willingness to negotiate.

2. Always respond in writing to create a record of the negotiation.

3. Request justification for any low offer before making a counter.

4. Document everything - keep copies of all correspondence and notes of phone conversations.

5. Do not accept any offer until you have reached maximum medical improvement (for injury claims) or full repair scope is known (for property claims).

6. Set reasonable deadlines for responses to maintain momentum.

7. Be prepared to invoke appraisal if available under your policy for property claims.

8. Consider legal representation if the claim is substantial or negotiations are not progressing.

CHECKLIST BEFORE SENDING

☐ Reviewed offer letter carefully
☐ Documented all supporting evidence for claim value
☐ Calculated percentage of actual value offered
☐ Prepared detailed objections to their valuation
☐ Set reasonable counteroffer amount
☐ Set appropriate deadline for response
☐ Reviewed for professional, non-emotional tone
☐ Attached all supporting documentation
☐ Made copies of everything
☐ Sent via method providing proof of delivery
☐ Calendared response deadline