To prevent litigation for amounts due, insurers must avoid offering what?

Offering substantially less than the amount ultimately recovered can lead to significant issues, including litigation. When insurers provide initial payment offers that do not reflect the true value of the claim, it can create frustration and distrust with policyholders. Such low offers may cause claimants to feel that their claims have not been taken seriously, prompting them to seek legal action to recover what they believe is owed.

By ensuring that their offers are fair and reflective of the potential total recovery amount, insurers can foster goodwill and maintain positive relationships with policyholders. This approach not only helps to mitigate the risk of litigation but also upholds the insurer's reputation for treating claims honestly and transparently. Thus, this strategy is vital in managing claims efficiently and minimizing disputes, contributing positively to the insurer's overall operations and customer satisfaction.