Negotiation Tactics

What claim negotiation is

Claim negotiation is the process of engaging professionally with the insurer to arrive at a fair and adequate settlement when the initial assessment or offer is lower than the insured believes is justified. It rests on three things: knowledge of the policy terms, the strength of the documents, and awareness of the rights the regulations give.

It is not bargaining in the market sense. The amount payable is fixed by the policy and the facts of the loss, so the discussion is about whether the assessment has applied the policy correctly to the facts.

Start with the survey report

The first step is to review the surveyor's report carefully and identify the specific items of disagreement. A general complaint that the amount is low gives the insurer nothing to reconsider. A list of items, each with the reason and the proof, does.

Depreciation is a common item. If the depreciation applied departs from the policy's schedule or from the property's real condition, it can be challenged with evidence. For plant, machinery or buildings that usually means an independent valuation by a qualified engineer or valuer. In motor claims depreciation follows the schedule in the policy, so the room for argument lies in whether the schedule was applied correctly.

Evidence, not pressure

Evidence-based, documented correspondence is the effective approach. Written objections, supported by bills, valuations and photographs, create a record that the insurer must answer and that any later body can read.

Emotional threats and social media pressure are not professional negotiation and do not address the points in dispute.

Timelines, the voucher and escalation

For retail general insurance policies, the insurer must decide the claim within 7 days of receiving the survey report under IRDAI's 2024 master circulars. Health claims have their own timelines. Older material quotes a single 30-day rule. Where payment is delayed beyond the prescribed time, IRDAI's policyholder-protection rules provide for interest at 2% above the bank rate.

A discharge voucher may be signed when a claim is paid. IRDAI clarified in a circular of 24 September 2015 that signing one does not stop a policyholder seeking a higher amount before a body established by law.

If the claims team does not resolve the dispute, the next step is the insurer's Grievance Redressal Officer. After that come IRDAI's Bima Bharosa portal and the Insurance Ombudsman, for those eligible, with a consumer commission as an alternative.

A Point of Sales Person (POSP) can help the client gather documents, understand the insurer's process and take a dispute to the claims team or grievance officer. Complex or legal disputes are for qualified professionals.

Rules at a glance

Key points

• Negotiation begins with a careful reading of the survey report and a list of the specific points of disagreement.
• Depreciation that departs from the policy schedule or the property's real condition can be challenged with an independent valuation.
• In motor claims depreciation follows the schedule in the policy.
• Documented, evidence-based correspondence is effective; threats and social media pressure are not.
• A retail general insurance claim must be decided within 7 days of the insurer receiving the survey report.
• If the claims team does not resolve the matter, the next step is the insurer's Grievance Redressal Officer.

Common misunderstandings

• Negotiation is not haggling: the amount follows from the policy terms and the evidence, so objections have to be specific and documented.
• Motor depreciation is not open to an engineer's opinion: it follows the schedule in the policy.
• The 30-day rule in older material is out of date for retail general insurance claims: the decision is due within 7 days of the survey report.
• Signing a discharge voucher does not close every door: IRDAI clarified in 2015 that a higher amount can still be sought before a body established by law.

Questions people ask