Here are five valuable negotiation tips to get a larger settlement after a car accident. Smart negotiators end up with more compensation.
Most car accident claims are settled by negotiating directly with the insurance company. Preparation and organization are essential when it comes to negotiating a settlement.
Preparing a strong insurance claim starts at the scene of the accident. The evidence you gather to prove the other driver’s fault makes it easier for the insurance company to accept your claim.
Knowing what your claim is worth and how to justify a fair settlement is straightforward for most minor injuries. Here we offer some tips to help you successfully navigate the settlement process, from calculating your claim’s value to signing the release agreement.
Tip 1: Take Control of Your Claim From the Start
A successful car accident claim starts at the scene. Always call 911 after a motor vehicle accident, and be sure to tell the dispatcher if you or someone else may be injured.
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, evidence from the scene will be critical to your future insurance claim negotiations.
Link Your Injuries to the Accident
You won’t get far with an auto insurance claim for injuries without medical documentation. Always seek immediate medical care after an auto accident.
If paramedics arrive at the accident scene, let them evaluate you. Don’t hold anything back. You may have 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. See your primary care provider or seek care from the hospital emergency department or an urgent care center.
You must tie your injuries directly to the car accident for an effective claim. Tell every provider who treats you exactly when and how you were injured.
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 Your Insurance Company
If you live in a no-fault 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, or property damage.
In a no-fault state, you won’t file a personal 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 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 agree to cooperate with their investigation.
The Notification and Cooperation 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 insurance policy is a contract. Under the contract, your insurer 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.
Notifying the At-Fault Driver’s Insurance Company
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.
Send a notification letter to the at-fault driver’s insurance company. This lets them know you intend to seek compensation 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 insurers to acknowledge your claim while not making any promises to pay.
Be prepared to hear from an insurance claims adjuster asking for “more information.” Don’t let the adjuster pressure you into giving a recorded statement or signing a blanket medical release that could hurt your claim.
The adjuster might offer a quick settlement right away. Don’t be fooled into accepting a lowball settlement offer. 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.
Tip 2: Plan Your Negotiation Strategy
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 enough to support your demand for compensation.
Injury claims against the other driver’s insurance company can be trickier. You’ll have to prove their insured caused the accident and is liable, meaning responsible, for your injuries.
Confirm the Four Elements of Negligence
Proving fault and 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: A driver’s responsibility to operate the vehicle safely. For example, Sue had a duty of care to drive safely, including maintaining a safe distance behind other cars.
- Breach of Duty: A driver is negligent and does something wrong. 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: A driver’s breach of duty directly causes injuries. 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: The victim’s verifiable injuries and other losses. 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 above four elements without confusion.
Tip 3: Know the Value of Your Injury Claim
Figuring out the value of your injury claim starts with adding up your hard costs. Hard costs are expenses with a dollar value verified by bills or other documentation. Adjusters call hard costs “special damages.” Then you add an amount for “general damages” like pain, suffering, and emotional distress.
Special Damages include:
- Medical bills
- Therapy or treatment bills
- Out-of-pocket medical expenses like bandages and crutches
- Costs of replacement services, like lawn mowing or child care
- Lost wages
General Damages include:
- Physical pain and discomfort
- Depression, anxiety, insomnia, or other emotional disorders
- Physical limitations, including the inability to hug your children
- Loss of consortium (supportive relationship) with your family
- Any other emotional or psychological trauma
Be sure to include the full cost of your medical and pharmacy expenses, even if some or all of it was covered by your health insurance.
Figuring out “general damages” takes some thought. There’s no objective way to measure the injury’s effect on your life. You’ll need evidence of your pain and suffering to convince the adjuster to accept your demand.
A reasonable settlement amount for minor injuries can be 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 without an experienced car accident lawyer.
Putting It All Together in a Demand Packet
After completing treatment, gathering evidence, and calculating your settlement amount, you will 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 documents supporting your claim.
It’s worth your time 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 helps the adjuster justify your settlement and helps you easily reference items 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
- Witness statements
Never send original documents or photographs to the insurance company. Always send copies. 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.
Tip 4: Be Ready for the Insurance Adjuster’s Tactics
Negotiating with the insurance adjuster is the hardest part of handling your own insurance claim. If you’re prepared to negotiate with patience and persistence, you should be able to successfully reach a fair settlement.
The adjuster might make their first offer soon after you file the claim. You can be sure the amount won’t be anywhere near the fair value of your damages. Let the adjuster know you won’t be ready to discuss settlement until you’ve recovered from your injuries.
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 low initial 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 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 have good documentation and are seeking a reasonable amount of money. Unfortunately, sometimes negotiations break down, and it’s time to consider other options for recovering compensation.
Some adjusters out there might use bad faith negotiating tactics, but most of the time, when the adjuster stops returning calls or seems to be ignoring you, 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. An attorney will likely be able to settle your claim without filing a personal injury lawsuit, or at least before going to trial.
You have the right to consult a personal injury lawyer at any time during the negotiation process. Most reputable car accident attorneys offer a free consultation, and there’s no obligation on your part.
It pays to get a free case evaluation with an experienced attorney if your car accident settlement negotiations break down.
Tip 5: Confirm Your Injury Settlement Agreement
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. Address your confirmation letter to the adjuster who offered the settlement you accepted.
The confirmation letter should include:
- Name of the insured
- 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 settlement agreements 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 final 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.
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