Boost your injury compensation by knowing how to effectively negotiate your car accident claim with the insurance company.
Most car accident injury claims are settled by negotiating directly with the insurance company.
Complicated or serious injury claims are best handled by an experienced attorney. But you can probably handle a minor injury claim on your own.
Claims adjusters have an impressive array of negotiating styles and tactics. Adjusters use their expertise to manipulate unprepared claimants into accepting the lowest possible settlement offer.
By understanding the claims process and legal terms, you’ll make it clear from the beginning that you’re prepared and committed to assertively negotiating your claim.
We walk you through the critical steps to successfully negotiate your accident claim, from calculating your claim’s value to signing the settlement agreement.
Step 1: Establishing Your Accident Claim
A successful car accident claim starts at the scene of the collision. Always call 911 after a motor vehicle accident, and be sure to tell the dispatcher if you or someone else may be injured.
Individual state car accident laws dictate when police must be notified and the type of information the drivers should exchange. You can’t go wrong calling 911. Police in busy jurisdictions might not show up for a fender-bender, but it’s still important for you to create an official record of the accident.
Whether or not police show up to investigate the accident, evidence collected from the scene will be critical to your future insurance claim negotiations.
Medical Care is Necessary for Injury Claims
You won’t get far with an auto insurance claim for injuries without medical documentation. Always seek immediate medical care after a motor vehicle accident.
If paramedics arrive at the accident scene, let them evaluate you. Don’t hold anything back. You may have serious internal injuries or brain trauma that’s masked by the shock and distress of the crash.
If you aren’t transported to the hospital from the crash site, it’s important to have a medical evaluation as soon as possible, preferably the same day. You can see your primary care provider or seek care from the hospital emergency department or an urgent care center.
Tell every provider who treats you exactly when and how you were injured. You must tie your injuries to the car accident for an effective claim.
Refusing or delaying medical treatment can sink your injury claim. The insurance adjuster will jump at the chance to deny your claim, arguing that your injuries aren’t related to the car accident.
Notify the Insurance Companies
If you live in a no-fault insurance state, your medical costs and lost wages will be covered by your Personal Injury Protection (PIP) coverage, up to the stated limits. PIP doesn’t cover pain and suffering,
In a no-fault state, you won’t file an injury claim against the at-fault driver unless your injuries are severe enough to exceed the state “injury threshold,” in which case you’ll need a good personal injury attorney to get fair compensation.
No matter where the accident occurred, you must contact your insurance company, even if the accident wasn’t your fault.
Almost all auto policies have a “notification and cooperation” clause, which means you agree to tell the insurance company about every accident, and you also agree to cooperate with the insurance company’s accident investigation.
The clause will look something like this:
“Insured (you) agrees to notify the insurer (your insurance company) of any accidents and thereafter comply with all information, assistance, and cooperation which the insurer reasonably requests, and agrees that in the event of a claim the insurer and the insured will do nothing that shall prejudice the insurer’s position…”
Your auto policy is a contract. Under the contract, your insurance company will defend you against claims made by occupants of the other car. However, you might lose that protection if you violate the contract by failing to notify the company of the accident.
You should have the contact information for the at-fault driver’s insurance company, either from information exchanged at the scene or from the police report.
Go ahead and send a notification letter to the at-fault driver’s insurance company. This lets them know you intend to file an insurance claim for injuries from the crash.
Don’t be alarmed if you get a Reservation of Rights letter from the insurance company. The letter is commonly used by insurance companies to acknowledge your claim while not making any promises to pay.
Be prepared to hear from an adjuster asking for “more information” to proceed with your claim. Don’t let the adjuster pressure you into giving a recorded statement or signing a blanket medical release that could hurt your claim.
Keep in mind that you won’t be ready to negotiate your injury claim until you’ve completed treatment.
Learn more about Mistakes to Avoid When Negotiating Car Accident Claims.
Step 2: Getting Ready for Insurance Negotiations
No-fault insurance claims under your PIP coverage are generally straightforward. You don’t have to prove another driver caused the accident, and your medical bills and records are usually sufficient to support your claim for compensation.
Injury claims against the other driver’s insurance company can be trickier because you’ll have to prove their insured caused the accident and is responsible for your injuries.
It helps to understand some legal terms used by insurance companies:
- Duty of Care means the obligation to be careful and avoid causing harm to others. The other driver has a duty of care to obey all traffic signals.
- Liability means fault or responsibility. The at-fault driver is liable for the damages you suffered in the accident.
- Negligence happens when a driver fails to act responsibly or does something no reasonable driver would do, like texting while driving.
- Damages can include property damages to your car, and personal injury damages like medical and therapy costs, out-of-pocket expenses, lost wages, and pain and suffering.
- Proximate Cause is an action that leads to damages that wouldn’t have otherwise happened. You wouldn’t have a neck injury if the distracted driver didn’t rear-end your car.
Because you’re the person making the injury claim, it’s up to you to prove the other driver is liable for your injuries. Now that you know some of the legal terms, it will be easier for you to prove liability.
Build Your Claim with Elements of Negligence
Proving liability for a car accident is kind of like drawing a square. You need four sides to make a square, and you need four “elements” to provide liability for an injury claim:
- Duty of Care: Sue had a duty of care to drive safely, including maintaining a safe distance behind other cars.
- Breach of Duty: Sue breached her duty by negligently texting while driving, not noticing that Jim had stopped his car in front of her, and crashing into Jim’s car.
- Proximate Cause: Jim suffered neck and back injuries in the crash. He would not have been hurt, but for Sue’s negligence that caused her to collide with Jim’s car.
- Damages: Jim incurred medical bills, pain and suffering, and lost wages he can verify with documentation.
Before speaking with the claims adjuster, make sure you understand the elements of negligence for your claim and how they’re connected. Look at them as pieces of a puzzle that fit together to form a complete picture. To effectively negotiate your claim, you must be able to move back and forth freely among the elements without confusion.
Step 3: Making a Demand for Compensation
Figuring out the value of your bodily injury claim starts with adding up your hard costs. These are expenses with a dollar value verified by bills or other documentation. Adjusters call these hard costs “special damages.”
Special Damages include:
- Medical or chiropractic bills
- Therapy or treatment bills
- Out-of-pocket medical expenses like medications and crutches
- Cost of replacement services, like lawn mowing or child care
- Lost wages
Calculate your special damages by adding up your bills, receipts, and lost wage statements. Be sure to include the full cost of your medical and pharmacy expenses, even when some or all of it was covered by health care insurance.
Figuring out “general damages” like pain, suffering, and emotional distress takes some thought. There’s no objective way to measure the injury’s effect on your life. You’ll need to collect evidence of your pain and suffering to convince the adjuster to accept your demand for general damages.
In general, a reasonable settlement amount for minor injuries is calculated by adding up your special damages, then multiplying the total by one or two times to account for your pain and suffering.
General damages for severe injuries, especially permanent injuries, are calculated at a much higher rate. You won’t be able to get a fair insurance settlement for serious injuries on your own.
If you’ve suffered severe or permanent injuries, talk to a personal injury attorney about the value of your claim.
Putting It All Together – The Demand Packet
Now that you understand the elements of an auto accident claim and how much your claim is worth, it’s time to kick off negotiations by making your initial demand to the insurance company.
You will send a “demand packet” consisting of a formal demand letter along with an indexed collection of all the documentation supporting your claim.
It’s worth your time and effort to put together a neat and organized demand packet. You can put the packet together in a ring binder or folder with index tabs, or use clips to keep the sections neatly together.
Make two identical packets, one for you and one for the insurance adjuster.
An organized demand packet makes it easier for the adjuster to justify your settlement and makes it easier for you during negotiations.
Prepare a demand letter summarizing the facts of the case and itemizing your damages.
The demand packet should include copies of all your supporting evidence, in the order the items are referenced in the demand letter.
Your supporting evidence might include:
- The police crash report
- Medical records and bills
- Wage statements
- Photographs of the accident scene and your injuries
- Witness statements
- Any other documentation that can help your claim
Look like a pro by mimicking our sample Personal Injury Demand Letter.
Never send original documents or photographs to the insurance company. Use copies to assemble your demand packets. Original documents and other evidence should be safely stored in your accident file.
To submit your demand packet, use a big enough envelope to hold the packet without folding it. Send the packet to the insurance adjuster by US Postal Service certified mail, return receipt requested. When the green card comes back, attach it to your copy of the packet.
Step 4: Negotiating the Settlement Amount
Actively negotiating with the insurance adjuster is the hardest part of handling your own insurance claim. When you’re prepared to negotiate with patience and persistence, you should be able to successfully reach a fair settlement.
The adjuster might start by lobbing a settlement offer at you as soon as you file the claim. You can be sure the amount won’t be anywhere near the fair value of your damages.
Adjusters are trained to settle claims as quickly as possible for as little money as possible. Your claim is just another folder in the pile on their desk. They negotiate claims all day, every day. It’s strictly business to them.
On rare occasions, an adjuster may review your neatly organized demand packet and agree to pay the full amount you requested. More likely, the adjuster will say your demand is way too high and outside their “authority” to settle, and then counter with a low-ball offer.
Part of the adjuster’s strategy is to gauge your reaction to a ridiculously low offer. If they can rattle you, they can find out if you’re desperate for money or unsure of the true value of your claim.
The right way to respond is to calmly draft a letter rejecting the low settlement offer and re-stating why your demand is valid. In the interest of moving things along, you might come down slightly from your original demand.
Only negotiate down from your last demand, never up from the adjuster’s offer. You and the adjuster will go back and forth several times before reaching a compromised settlement amount.
It’s in the best interest of you and the insurance company to settle your claim. Nobody wants a lawsuit. They’re expensive and can take years to resolve. Professional negotiators know that a good settlement involves compromise on both sides.
When the Adjuster Won’t Cooperate
Most insurance adjusters will work with you to settle a claim when you’ve got good documentation and are asking for a reasonable amount of money. Unfortunately, sometimes negotiations break down, and it’s time to consider other options for recovering compensation.
There are some adjusters out there who might use bad faith negotiating tactics, but most of the time, when the adjuster stops returning calls or seems to be ignoring your last demand, it’s because they’re lazy or just plain overwhelmed with work.
Sometimes, hiring an attorney is all it takes to re-boot negotiations and get the adjuster to offer a fair settlement amount.
You have the right to consult with a personal injury attorney at any time during claim negotiations. Most reputable injury attorneys don’t charge for their initial consultation, and there’s no obligation on your part.
It’s in your best interest to talk to an attorney about how to get fair compensation.
Step 5: Finalizing Settlement Negotiations
After going back and forth a few times with the adjuster, you should get to an offer of compensation you can live with.
Immediately confirm the amount and terms of your agreement in writing. You can send the confirmation by email with a hard copy sent by certified mail.
The confirmation letter should include:
- Your name
- The name of the adjuster who offered the settlement you accepted
- Name of the insured
- The insurance claim number
- Car accident date
- Date of your verbal agreement
- Settlement dollar amount
- Any other terms
You’ll probably get a similar confirmation from the adjuster.
Settlement and Release Agreements
Within a week or two of coming to an agreement with the adjuster, you should receive a formal “Settlement and Release Agreement” with instructions to sign and return the original document.
It’s very important to confirm the terms of the agreement before signing the document. If the insurance company sent a settlement check along with the release form, don’t deposit or cash the check until you are sure the agreement is correct.
Most agreements will have language that:
- Prevents you from taking further action against the at-fault driver
- Confirms that you won’t get any other compensation for your injuries
- States that it’s a compromised settlement and is not an admission of liability
- Prohibits you from disclosing the settlement terms and amounts without permission
It’s up to you to make sure the agreement is correct and you understand what it says before signing. The release and settlement agreement is a binding legal document, so there’s no going back.
After confirming the document is correct, you’ll sign and return the agreement to the insurance company. Barring unexpected delays, you should receive your settlement proceeds with a few weeks of returning the signed agreement.
Video: Steps to Negotiating Car Accident Injury Claims
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