What Does the Insurance Adjuster’s First Offer Usually Look Like?

Insurance adjusters work from internal value calculations. Understanding how those numbers are set helps you understand the gap between the first offer and a fair settlement.

The Short Answer

Typically 20-40% of what the case is actually worth. The first offer is a starting position designed to close the case cheaply, not a fair valuation. Insurance adjusters operate from internal evaluation software (often “Colossus” or similar) that produces a baseline number — then they offer significantly less than that baseline. Accepting the first offer is almost always a financial mistake unless the case is genuinely minor.

Video coming soon — Solomon Radner answers this question

The Detailed Answer

Insurance adjusters are not trying to be fair. They’re trying to close cases quickly and cheaply because that’s their job. Understanding how the first-offer game works helps you avoid the trap. Once you see the pattern, the adjuster’s tactics become much less effective.

How insurance companies calculate baseline value

Most major insurance carriers use internal claim evaluation software. The most well-known is Colossus, but State Farm, Allstate, USAA, and others have their own proprietary systems. These systems look at:

Medical bill totals
Diagnosis codes (ICD-10) from medical records
Treatment duration and frequency
Permanency of injuries
Liability strength
Jurisdiction (Michigan, Wayne County vs Oakland County, etc.)
Whether the claimant has an attorney

The software produces a baseline number. Adjusters then typically offer 50-70% of that baseline as the first offer.

Why first offers are so low

Anchoring effect — starting low frames the entire negotiation
Tests willingness — some claimants accept the first offer, saving the insurer significant money
Leaves room to “increase” — adjusters appear to be making concessions in negotiation
Targets unrepresented claimants — software adjustment for “no attorney” can be 30-40% lower than the baseline

What’s missing from the first offer

First offers typically undervalue or omit:

Future medical care — scar revision, follow-ups, ongoing treatment
Pain and suffering — substantial in Michigan, often undervalued in initial offers
Lost wages from time off work — fully recoverable but routinely omitted
Loss of earning capacity — for victims whose injuries affect career options
Psychological injury and PTSD — see our PTSD page
Permanent scarring valuation — under-quantified by software
Loss of enjoyment of life

How experienced attorneys move the offer up

Attorneys move first offers up by:

Documenting ALL damages categories the software didn’t capture
Coordinating medical opinions on future care and permanency
Calculating wage loss and earning capacity loss precisely
Demonstrating willingness to litigate if necessary
Citing comparable Michigan verdicts and settlements
Pushing past the initial adjuster to the carrier’s negotiating supervisor when necessary

The result, in most cases, is final settlements 2-4x the first offer.

What This Means for Your Case

Treat the first offer as the floor of the negotiation, not the ceiling. The number is a starting point — not a fair assessment. An experienced Michigan dog bite attorney can usually move the offer significantly higher without filing suit. Get a free case review before responding to any offer.

Bitten by a dog in Michigan? Call 1-800-LAWSUIT or request a free case review. No fee unless we win.