Why the first number is rarely the real number
Insurance adjusters routinely open negotiations with a conservative figure, expecting a counteroffer. Accepting that first offer typically closes the claim permanently — there's generally no going back to ask for more later, even if additional injuries or costs surface afterward.
A genuinely significant piece of legal history
Here's something worth knowing: Alabama was among the first states in the country to recognize the tort of bad faith refusal to pay an insurance claim, in the 1981 case Chavers v. National Security Fire & Casualty Co., 405 So. 2d 1 (Ala. 1981) — a foundational decision that helped shape this area of law nationally, not just within Alabama.
Two real categories of bad faith
Alabama recognizes "normal" bad faith — an outright refusal to pay a claim with no lawful basis for doing so — and "abnormal" bad faith, where the insurer's inadequate offer stems from a failure to properly investigate the claim in the first place. A documented lowball offer unsupported by the actual evidence can itself be cited as part of a bad faith claim.
A real, meaningful limit on this protection
It's worth being clear-eyed here: a low offer alone isn't automatically bad faith. Alabama courts, including the federal appeals court applying Alabama law, have repeatedly held that an insurer cannot be held liable for bad faith if it has any "arguable basis" for its position — regardless of how thorough or thin its investigation actually was. This "fairly debatable" standard genuinely protects insurers in a large share of ordinary disputes over value.
What this means practically
The real takeaway isn't that every low offer is legally actionable — it's that Alabama's legal framework gives genuine weight to a documented, well-supported counteroffer. Comparing the insurer's number against your own complete tally of economic and non-economic damages, rather than accepting the first figure at face value, is the practical step this history actually supports.