How to Use Anchoring When Making a Workers’ Comp Settlement Demand

Corey R. PollardWorkers’ compensation attorney · Former insurance defense · $100M+ recovered

Anchoring the insurance company to a specific dollar amount by making the first offer is one of the most useful tools you have for settling a workers’ compensation claim on fair terms.

Is your client interested in a settlement? If so, send me a demand, and I’ll ask the adjuster for authority.

Insurance defense attorneys – the ones representing claim administrators like Sedgwick and Gallagher Bassett, or employers like Bon Secours and UPS – send me messages like that several times a month.

Early in my career, they annoyed me. If the insurer wanted to settle, why not just make an offer I could take to my client? Over time my view changed. I started to see these messages as an opening – a chance to secure better settlements for injured workers, using what psychologists call the anchoring effect.

This article explains how making the first demand, when the timing is right, can improve your outcome – whether you’re negotiating directly with the adjuster or heading into mediation. (If the insurer has already made you an offer, start instead with how to respond to the first settlement offer. This one is about making the first move.)

The short version of anchoring a workers’ comp settlement demand

• The first number in a negotiation quietly shapes the whole range – even against a professional.
• In workers’ comp, the insurer has usually valued your claim before you say a word. Your job is to change the assumptions behind that number.
• A big number alone does nothing. A number tied to medical evidence the insurer hasn’t priced does the work.

What is anchoring?

Anchoring is a cognitive bias – a systematic error in how people make decisions. It causes us to lean too heavily on the first piece of information we get. In a negotiation, the first offer becomes that information: once a number is on the table, both sides tend to argue around it, even when the evidence points somewhere else.

But workers’ compensation adds a complication most anchoring advice ignores: the insurer has usually valued your claim before you ever make a demand. That changes what you’re really doing when you anchor – a point I’ll come back to, because you must know how to play the game to get every dollar from the insurer.

Does anchoring actually work against an insurance adjuster?

Maybe you’re skeptical. Anchoring can sound too simple to work on a professional who prices claims and negotiates for a living. So start with the evidence.

Amos Tversky and Daniel Kahneman first documented anchoring in a 1974 paper in Science, “Judgment under Uncertainty: Heuristics and Biases.” In one demonstration, they spun a rigged wheel that stopped on 10 or 65, then asked people what share of the countries in the United Nations were African. The wheel had nothing to do with the question – yet people who saw 65 gave far higher answers than those who saw 10. A number on the table pulled every estimate toward it, even one everyone knew was random.

The effect carries into real negotiations. In a 2006 meta-analysis of negotiation studies, Chris Guthrie and Dan Orr found a substantial positive relationship – approximately 0.5 – between the opening offer and the final negotiated outcome. In other words, the opening demand did far more than start the negotiation. It consistently shaped where the bargaining ended. Opening demands do not merely begin the negotiation – they strongly influence where it ends.

It is tempting to begin with a moderate number to show you’re being reasonable. Research suggests that instinct may be backward. Korobkin and Guthrie found that negotiators who opened more ambitiously often achieved better settlements and were no less likely to reach agreement than those who started with a moderate offer. The lesson is not to inflate your demand beyond what the evidence supports- it is to avoid negotiating against yourself before the negotiation even begins. You are unlikely to receive goodwill from the other side for being more reasonable.

What the research says about anchoring the pros

Does any of this work on someone who negotiates workers’ compensation claims for a living? Maybe less than it works on the average person – but yes. Chris Guthrie and Dan Orr found that the relationship between the opening offer and the final outcome weakened when negotiators had real experience, dropping from about 0.50 overall to roughly 0.37. Experience reduced the anchoring effect. It did not eliminate it

That matches what Randall Kiser reports in Beyond Right and Wrong, which examines thousands of attorney and client decisions. Experienced lawyers and claims professionals appear less susceptible to anchoring than the general public, but experience does not make anyone immune to cognitive bias. Against an experienced adjuster, a number by itself accomplishes very little. What changes the negotiation is the evidence attached to that number.

Why anchoring works in a settlement negotiation

Psychologists don’t fully agree on the mechanism, but the leading explanations point the same direction. When we’re unsure of a value, we grab a starting number and adjust from it – usually not far enough. The anchor also primes us to notice and recall information that fits it, so we unconsciously build the case for a number we may not even believe. Whatever the exact cause, the practical lesson is the same: once the negotiation forms around a number, later moves tend to stay near it.

What you’re actually anchoring in a workers’ comp case

Here’s where most negotiation advice stops being useful. In a personal injury case, the gap between the two sides often comes from non-economic damages like pain and suffering – subjective by nature, and easy to anchor with a bold number. Workers’ comp doesn’t work that way. It has fewer, more concrete parts: indemnity (wage loss and permanent partial disability benefits) and future medical costs.

In many Virginia claims, wage-loss exposure is bounded by the statutory 500-week framework, though important exceptions and separate benefit categories apply. That leaves a narrower band to anchor within – but plenty of room to move the number with evidence. Significant work restrictions, for instance, support the argument that you’ll struggle to find comparable-paying work, which raises the insurer’s likely wage-loss exposure over time.

But in many cases, the real battleground is future medical care. Long before you demand anything, the insurer has already estimated it – through reserves, medical projections, or internal claims models. That estimate is its true first anchor, and you never see it.

Your job is not to invent a bigger number. Your job is to persuade the insurer that its invisible anchor is wrong.

So don’t accept the insurer’s projection of your future needs. In a significant case, that may mean hiring a life care planner – a professional who projects your lifetime medical costs – or obtaining a detailed medical-cost projection that captures treatment the insurer’s estimate left out. A large number standing alone tells the adjuster nothing their model hasn’t already weighed. What moves the number is a documented future the model never priced.

Say the insurer expects your treatment to wind down to periodic pain-management visits. But your treating surgeon later concludes you’re likely to need a lumbar fusion within five years.

Now your demand isn’t just a higher number – it reflects a future the insurer never priced into the claim. That is the difference between an anchor that gets dismissed and one that moves the file closer to your number.

How to use anchoring to get more for your injury

Knowing the effect is real is one thing. Here’s how to put it to work in your own claim.

• Time the demand. Anchor as soon as you have enough information to value the case fairly – timing matters as much as the number.
• Lead with the figure. Open your demand letter with the amount, then explain why the evidence supports it.
• Mind your concessions. How you move is a second anchor. Decide your sequence before you make the first offer, not during.
• Keep building evidence. Causation and disability letters, discovery, and strong deposition testimony are what make an anchor hold.
• Support it with evidence, not guesses. Commission decisions on a disputed legal issue, benefit calculations, and genuinely comparable claims make a demand credible.
• Keep it reasonable. A number far outside what the evidence supports reads as a party who hasn’t valued the case.
• Don’t anchor yourself. Write down your target range and your walk-away number before you hear the insurer’s offer.

Watch your concession pattern – it’s a second anchor

The number you open with isn’t the only signal you send. The way you move tells the adjuster where you’re headed. Demand $300,000, drop to $250,000, then to $230,000, and you haven’t made three offers – you’ve drawn a line pointing at roughly $215,000, and the adjuster is now negotiating against your trajectory instead of your evidence. Smaller concessions, spaced further apart, say something different than big ones made quickly. Decide the sequence before you make the first move.

Set a reasonable anchor

However well anchoring works, an unreasonable opening can sink it. Kiser’s research suggests anchors influence not only what a case settles for but whether it settles at all. A number far outside any range the evidence supports doesn’t read as strength – it reads as a party who hasn’t valued the case correctly, and it can end the conversation before it starts. That’s doubly true against an experienced defense attorney or a carrier that spends heavily on claims analytics and will know when you’re out of bounds.

Don’t anchor yourself

The first number an injured worker puts on his own case is usually one he heard somewhere – a coworker’s settlement, a TV ad, the total of his medical bills. That number isn’t evidence, but it will sit in the back of his mind and pull every later decision toward it.

Before negotiations begin, write down two figures: the range you’re aiming for, and the number below which you won’t settle. Do it before you hear the insurer’s offer.

Anchor before the mediation, not during it

If you and your attorney decide to use mediation with the Virginia Workers’ Compensation Commission, you may picture that day as the whole negotiation. It isn’t. The anchoring happens before it – and two features of mediation are why.

First, the mediator is neutral and carries numbers between rooms. You don’t deliver your anchor to the adjuster’s face; the mediator relays it, summarized. A number attached to one compelling medical development arrives intact. A number attached to six scattered arguments arrives as “they’re asking for a lot.”

Second, and more important: by the time everyone’s in the building, both sides have already decided a range they’ll accept. The adjuster requested authority days or weeks earlier, from someone who isn’t in the room. The first number spoken at mediation is rarely the first number that mattered. If you want to shape the negotiation, start before anyone sits down.

• Virginia workers’ compensation settlements: the complete guide
• How much is my workers’ comp settlement worth?
• How to respond to the insurer’s first offer
• How a comp settlement affects your SSDI benefits

Learn to negotiate – or hire someone who does it for a living

Some people enjoy negotiating. Others would rather do almost anything else – and even those who like it can feel outmatched haggling with an adjuster who does this for a living while it’s their first time.

Early on, I wondered why defense attorneys always wanted me to make the first demand. After hundreds of these settlements, I finally understood: they were often unsure of the case’s value, and my anchor gave them a number to justify to their client. If you’re handling your own claim, understanding anchoring can keep you from leaving money on the table.

The opening number matters. The evidence behind it matters more.

Anchoring works in a workers’ comp case when your number is tied to a future the insurer hasn’t accounted for – a surgery, a permanent restriction, a course of care their model never priced – and that you bring to light.

Before I recommend a settlement number, I look at what’s still at risk.

Likely future treatment, work capacity, litigation posture, and what the insurer may have failed to price into the claim – that’s what sets the demand. If you’d rather have someone who negotiates with these adjusters every week, let’s talk through your Virginia workers’ compensation claim.

Call (804) 251-1620

Corey Pollard Law is the trade name of Jenkins, Block & Associates, P.C. Offices in Richmond and Hampton Roads. We handle Virginia claims only.

Common questions, straight answers.

About the authorCorey Pollard is a Virginia workers’ compensation and Social Security Disability attorney in Richmond. Best Lawyers in America® (2020–2026), $100M+ recovered, and a former insurance defense lawyer — which is the part that matters.