Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

We file coverage and claim practice lawsuits, and most work out pretty well. I think the skill level of many in the policyholder’s bar, including myself, can be improved. While lawsuits help play out the drama of legal and factual disputes, eventually a resolution must be obtained. I feel as if a post I made in December, Influence And Persuasion, Part 2 is worthy of being re-published in full in light of some suggesting that the only way to resolve conflict is through mass resolutions which may actually not be in the best interest of the individual policyholder. For some background, I wrote this blog post after resolving the Port of New Orleans lawsuit with FM Global. I was preparing a speech for the Florida Justice Association about this topic and wrote the post with those thoughts in mind.

Influence And Persuasion, Part 2

As indicated in my previous blog, everybody can benefit from understanding some basics of intellectual influence. While my speech was given to trial attorneys who typically represent people against insurance companies, anybody can use them, and should, if they want better results with dealing with people who have different views. Some may question why I would publish the "secret" to getting great resolutions from insurance companies. Frankly, if everybody practiced these principles, the world would be a lot more progressive.

The four principles of influence and persuasion are:

1. Compassion
2. Authenticity
3. Genuine Caring
4. Passion

Compassion is the ability to understand and relate an issue from the viewpoint of the person you are trying to persuade. The best negotiators learn everything they can about the decision-makers, so they can relate the issues in a manner that is understandable, respectful, and acceptable to the decision-makers’ view of the world. Some great trial lawyers still teach that you have to determine the foreperson and leaders of the jury and try a case to those people. In a mediation or settlement discussion, understanding and respecting the belief system of those you are trying to persuade is paramount.

In most settlement meetings of insurance coverage and bad faith claims disputes, the insurance company will have at least two of the following people participating:

1. Field Adjuster--possibly an independent adjuster versus an in-house adjuster.
2. Supervising Adjuster
3. Opposing Attorney
4. High Claims Level Executive
5. In-House Counsel
6. The Person on the Phone--the decision-maker.

I often tell the other attorneys in our firm that an insurance company will pay big money to a prepared, skilled and tough professional, but most insurance executives will never voluntarily pay a jerk the full value of a case. Indeed, most attorneys from a generation ago are aghast at how unprofessional and demeaning many trial attorneys publicly behave today. It is generally worse in the major metropolitan areas, and I suspect that much of the behavior is bravado by some less skilled in trial practice to "bully" a result and avoid a trial.

The problem many attorneys and public insurance adjusters have is that they simply do not understand how an insurance company claims department operates. When you can only see the world through your own eyes, it is impossible to truly have compassion. For example, to get a better understanding of State Farm in our first round of Hurricane Katrina mediations in Mississippi, I hired a person who previously worked in State Farm's Bloomington home office. This person gave us a better understanding of the decision-makers who were not in front of us in Jackson, Mississippi. I often seek retired home office people as consultants or retain private investigators to help learn about the people I am negotiating with. If I could, I would simply have a pre-mediation dinner with them, but most insurance company claims executives do not like dining with a person they view as the enemy.

Authenticity is the ability to be "real" with another human. You have to be honest with the facts and how the law applies to those facts. You have to point to facts and law favorable to the opponent. Most people lack the courage to be authentic or do it in such a manner as to shut down the person they are trying to influence. If you cannot be authentic, it is difficult for the people on the other side of a discussion accept the honest facts and law. If you cannot demonstrate the ability to recognize that truth is sometimes gray, it is hard to have authenticity as well.

In a mediation of any bad faith case, I often use the jury instructions and "the rules of the road" techniques to show the insurance company exactly what the jury will be told to determine if and how society will hold the insurer accountable for its behavior during the claims process. If the policyholder's case has merit, putting the facts of the adjustment and the admissions gained through discovery next to the jury instructions, generally gives an intelligent insurance executive an understanding of why a case may be worth so much more than previously evaluated.

Genuine Caring is the ability to seek a fair resolution. Many may question why I would want a fair resolution rather than a killing for our clients. The answer is simple--I virtually never buy or settle anything at an unfair price to me. Thus, why would another individual do the same? However, I may pay dearly for something with a lot of value. And most of our cases, if they truly have merit, are litigated so that they are very valuable. The insurance company may have a hard time accepting that fact of value as any buyer of a valuable article. But, if it is fair and based on an authentic evaluation of the facts and law, what some on the outside of a case may see as a huge amount of money paid for a case is actually a fair amount to the participants.

Passion is loving what you do. Passion is loving your client. Passion is loving your case. To be the best at anything, you have to be passionate about it. If you want to influence another human and evoke a human response, most people need to see a passion for what you are doing and saying.

Our firm is filled with zealots. More than any other reason, the passion for fighting for policyholders and against the injustice of bad claims practices is the reason why we are financially successful at what we do. The passion is not for the money, it is for the cause. David Pettinato took on a bunch of very small insurance claims for very modest individuals because they were wrongly denied their claims’ full values. I told David that we had to do this, even though we were very busy with much larger matters, because it simply was not right that an insurance company would take advantage of its poorer clients.

In any human endeavor where there is a battle of views on important issues, the resolution will often depend upon the passion one puts into the work and the advocacy necessary to overcome another view. I cannot expect anybody to be influenced to an outcome which they may initially doubt is proper unless they truly understand that I know it is fair and that they can see my belief in it. When the Port of New Orleans case settled, I honestly felt a loss. I loved the issues and the work I was doing on the case. I enjoyed every minute of it. I am certain that passion had an impact on the resolution that few thought could be achieved this year. 

I wrote in response to a comment in The Value of Networking and Sharing Insurance Claim Information:

"The truth is that there are many fine and outstanding adjusters that do a fantastic job getting money to policyholders. The problem in my line of business is that I never hear of those stories because my clients have claim problems."

 

I have watched hundreds of hours of insurance training videos from various major insurance companies such as State Farm, Allstate, Nationwide, and GEICO. Our library is full of insurance claims manuals and training guides. Most of this training is excellent and teach principles of good faith. The public rarely gets to see this. The attorneys in my firm see it because it is our job to question what is taught and learn what is being done in the field.

I often talk with adjusters on cases before litigation--especially when corporations retain us to consult and help prepare their insurance claim with public insurance adjusters. Most of the adjusters are fairly well meaning individuals, but the adjusters in the field always seem to report to managers. Much of an insurance adjuster's claims attitude is determined by the culture and attitude of the claims supervisors. With some notorious exceptions, the attitudes and cultures are usually not in the training videos.

In those commercial losses where we are retained before the need for a lawsuit arises, the dialog becomes somewhat strained as we point out various benefits the insurance product can pay to help reduce the impact of the loss to the corporation. The adjusters seem bewildered because most of the time, they control their conversations with less knowledgeable and experienced policyholders. Even corporate risk managers and loss consultants rarely understand the full benefits available under a policy and leave millions on the table. Usually, after discussion and delay, the field adjuster gets approval for our view of the loss and the adjustment moves on with far greater payment.

The bottom line is that, from the policyholder perspective, there seems to be very little attitude from the insurance claims management to train field adjusters to use the insurance product to soften the financial blow as much as fairly possible. There seems to be little direction from managements to field adjusters to inform policyholders of information which would reduce their loss. If the training and attitude were otherwise, I probably would not have a job in this field of law.

Assuming that insurance claims management really does want its adjusters to help customers as much as the insurance policy allows, training adjusters to understand the product from the customer’s viewpoint is paramount. An example is Factory Mutual, where they specifically train their adjusters in the industry for which the insurance product is written. However, the vast training is not that way. Dimechimes recently explained in its Blog:

"I have been following consumer advocate attorney, Chip Merlin’s blogs since Hurricane Katrina. Rather than present blogs from an “ambulance chaser” perspective, I have watched him try to educate consumers about coverage issues and warn them about looming statute of limitations coming, for instance in MS post Katrina.

While it may be strange to study from free information from an insured plaintiff trial attorney website and standpoint, I have found it quite educational. Just don’t wear your feelings on your sleeve when you view his blogs as there are comments you may not agree with from an adjuster, adjusting firm, or insurance company standpoint.
......
The value I have found in viewing his blogs (there are several on his law firm site at www.merlinlawgroup.com ) is the fact that first he has an insurance defense background prior to becoming a consumer advocate trial lawyer so he knows both sides of the fence. Second, he posts links to active cases involving current claim litigation with links to important court documents we can learn from. I often link to his blog posts on this adjuster information blog when training new adjusters on Bad Faith as he has many great postings and articles there on the subject as well as other issues we need to know about."

So, for all the company and independent adjusters that read this, I understand that it is tough to hear criticism. Many of my clients never read their insurance policies before the loss happens. When they try to read it, they do not fully understand what it says. They certainly do not know how to use it to soften the financial loss they have suffered and how to measure the loss for complete indemnity. You have an important and demanding job to get them paid fully and quickly. They are in your hands.
 

We worked very hard on that case, as did the attorneys representing Factory Mutual. Between us, we reviewed over six million documents. Amazing. Such work does not happen without a team, and I will report anecdotes of our team and the litigation once the final paperwork is signed, sealed and the money delivered. In honor of the resolution, my wife and I have been relaxing in Lenox, Massachusetts, this past week before heading into New York City today. I have often said that the stress of litigation makes it a young man's game. But it certainly is a very fun, challenging, and often rewarding endeavor.