Avoid these costly mistakes when negotiating with the other driver’s auto insurance company. See how to maximize your car accident settlement.
More than 4.4 million people are injured in auto accidents on American roadways each year, racking up over $380 million in crash-related medical expenses.¹ Not surprisingly, insurance companies don’t like to part with that kind of money.
If you’ve decided to deal with the insurance company on your own, be prepared for a tough settlement process. Claims adjusters are trained to do everything possible to minimize payouts.
To get fair compensation, you’ll need to know how to negotiate your car accident settlement like a pro, and the pitfalls to avoid. Here are some common errors claimants make when negotiating with the insurance company. If you avoid these mistakes, you’ll be in a strong negotiating position.
16 Mistakes to Avoid During Claim Negotiations:
- Trusting the Insurance Adjuster
- Speaking Without Thinking
- Giving a Recorded Statement
- Signing a Blanket Medical Release
- Accepting the Adjuster’s First Offer
- Overlooking Important Evidence
- Guessing Your Claim’s Value
- Ignoring Your Medical Records
- Discussing Prior Injuries
- Revealing Family Issues
- Negotiating Against Yourself
- Jumping the Gun
- Losing Your Temper
- Refusing to Compromise
- Signing Agreements You Don’t Understand
- Missing Ominous Warning Signs
The adjuster is not your friend. Insurance claims adjusters are trained to engage claimants in informal discussions. They try to get you to relax, so you let your guard down. Being too relaxed makes it much easier for the adjuster to get you to say things they can use against you. Be on your guard at all times.
Don’t be too friendly with the adjuster. Be polite, but not submissive. You must go into settlement negotiations with a firm hand, believing your side of the claim is the truth. You don’t want the adjuster to “handle” you. Set a polite business tone on your first contact and keep it that way.
Don’t give the adjuster your Social Security number. Having your Social Security number allows the adjuster to access a lot of personal information. Although technically prohibited, the adjuster can check your credit history or access other information that might work against you.
Your chance to negotiate a fair settlement can be ruined with just a first few words of introduction with the adjuster. Take this common exchange, for example:
Adjuster: “Good morning Mr. Smith. How are you today?”
You: “Fine thanks, and you?”
You’ve just made your first mistake, by telling the adjuster you’re “fine.” A better exchange would go something like this:
Adjuster: “Good morning Mr. Smith. How are you today?”
You: “Good morning. I’m ready to discuss my injury claim.”
Don’t rant or offer opinions. Expressing opinions may come later, but for now, just discuss the basic facts. Limit what you say to:
- The location, date, and time of the collision
- Your name, address, phone number, and email
- The location of your car
A few careless remarks can end up costing you thousands of dollars in settlement money.
Admissions against interest are statements or comments that can be used against you later. The insurance company will specifically look for evidence of these admissions.
Common admissions people make after a crash include:
- “I’m sorry. I didn’t see you.”
- “I was texting,” or “I was on the phone.”
- “I was talking with my passenger.”
- “My tires are worn. I’ve been meaning to have them replaced.”
- “I just looked down for a second to change the radio station.”
- “I’m okay,” or “I don’t need the paramedics.”
Be careful not to make comments like this at the accident scene or later, when talking to the adjuster. They may come back to bite you.
Don’t agree to give your recorded statement. It’s not a good idea to give a recorded statement without an attorney to represent you. Once you give a recorded statement, your claim will be limited to the specifics of that statement. The only one who can benefit is the insurance company.
During a recorded interview, you’re likely to be manipulated by the adjuster. Manipulation tactics can include:
- Asking the same question several different ways at different points in the interview
- Making comments and seeking your agreement
- Asking leading questions about the accident, your finances, and what you might have done to avoid the collision
Offer to provide a written statement about how the accident happened.
Don’t sign any medical releases right away. Standard insurance company release forms allow the company to gather all your medical information for the past five to ten years. Protect your medical privacy. The adjuster doesn’t need that information at the start, and should never need your entire health history to settle a minor injury claim.
Once you’re nearing the end of your treatment, then you can sign a limited release that allows the insurance company to gather copies of your medical records related to the accident.
Alternately, instead of letting the insurance company gather your medical information, you can request all your relevant bills and records, then send copies to the insurance adjuster.
The adjuster might call with an initial offer as soon as you’ve filed an injury claim. If you only want a few medical bills paid and compensation for a day or two of lost wages, you might be willing to take a minimal settlement offer and call it a day.
Unless you’ve fully recovered, you can be sure their initial offer is much lower than your claim is actually worth. Keep in mind that your health insurance company has a right to be repaid from your injury settlement for what they paid on your behalf.
It’s okay to tell the adjuster you won’t be ready to discuss settlement until you’ve recovered from your injuries. If the adjuster asks when you expect to be recovered, say “I don’t know. I’ll be back in touch.” and politely end the call.
You’ll need solid car accident evidence to prove the other driver’s liability (responsibility) for the crash and to prove the extent of your injuries.
Police Report: The responding officer’s opinion of fault and description of the accident hold a lot of weight with adjusters. The police report is convincing evidence of the other driver’s fault.
Medical Records: Do your homework before you get started. If you don’t have all your medical bills, make a proper request for all your bills and records. Use a tracking log to make sure you haven’t missed anything.
Lost Wages: Contact your employer’s human resources department and ask for a statement of your lost wages while you are out getting treatment for your injuries. And make sure you have all the receipts for your related out-of-pocket expenses.
Don’t take for granted your claim will settle. Always keep in mind the possibility your case will end up in court. Organize your evidence, correspondence, and other claim-related paperwork as if you may ultimately have to file a lawsuit.
Don’t just pull a settlement number out of the air, or rely on the adjuster to determine fair compensation for your injuries, lost wages, and pain and suffering. When you’ve fully recovered from relatively mild injuries you can calculate a reasonable settlement for all your car accident damages.
Minor injury settlements don’t have to be complicated. Add up the total amount of all your medical bills, physical therapy bills, out-of-pocket expenses for things like medicines, crutches, and related costs like mileage and parking fees for your medical treatment, and your lost wages.
You are perfectly justified in requesting a reasonable amount of money for your pain and suffering caused by the accident. Settlements for minor injury claims typically include an amount for pain and suffering that’s one-and-a-half to three times the total medical costs.
Your demand for pain and suffering compensation should be in proportion to the scope of your injuries. You won’t be taken seriously if you ask for a hundred thousand dollars in pain and suffering for a sprained wrist that kept you out of work for three days.
The adjuster will go over your medical records with a fine-toothed comb. It’s a lot to read, but make sure you read and understand everything that’s in your doctor’s notes and treatment records. You need to be able to defend the nature of your injuries, why your doctor prescribed treatments, and why you needed to be off work.
Don’t just say, “I have whiplash.” This can be a red flag for claims adjusters. Although whiplash can be very painful, don’t mention it before you’ve been diagnosed by a physician. Adjusters sometimes even dispute medically-diagnosed whiplash, so claiming it without medical proof will almost always be challenged.
Avoid exaggerating. Claims adjusters hear all kinds of stories, and they can usually tell when someone is padding the truth. If you exaggerate at all, you’ll have to remember it each time you speak with the adjuster. That’s not only inappropriate, it’s hard work! Tell the straight truth, it will speak for itself.
Don’t discuss any pre-existing injuries. You can set back your claim by admitting you have a prior injury too soon in the claims process. If you tell the adjuster about it, they’ll be quick to say your latest injury is just an exacerbation of your previous one. You need a doctor to evaluate how one injury is related to the other.
When talking to your doctor, be sure to distinguish how your current symptoms are worse or different than with your prior injury.
It’s not uncommon for x-rays or scans to reveal age-related conditions, like degenerative disc disease, that you didn’t know you had. It’s important to make clear that you did not have any pain or limitations before the accident.
Don’t share that you are going through a divorce or don’t have the money to pay your bills. Be careful if holidays are approaching. The adjuster will assume you need money for holiday gifts.
Never let on that you would like to get your claim settled by a certain date, like a planned family vacation or your daughter’s wedding. The adjuster will never come off a low offer if they think you’ll take what you can get just to meet your “deadline.”
Don’t give the adjuster names of family, friends, or work references. The adjuster doesn’t need that information to settle a personal injury claim. You don’t want the adjuster hassling your friends or family, or speaking with someone who might imply you’re dishonest.
Of course, contact information for witnesses is fair game.
There will be several rounds of offers and counteroffers during negotiations. Don’t make the mistake of trying to negotiate up from the adjuster’s last offer. Always counter a low offer by coming slightly down from your last counter-offer. You can use a negotiations worksheet to keep track of each round.
If you’ve made a counter-offer, and haven’t heard back from the adjuster for a few days, be patient. Don’t call back to make a lower offer if the adjuster hasn’t responded to your last offer.
If a week or two goes by, you can contact the adjuster to say you are still awaiting a response. Adjusters handle dozens of claims on any given day, so they may have lost track of yours.
If exceptionally long delays continue to occur between rounds of negotiations, or the adjuster won’t return calls, it may be time to consult a car accident attorney. The insurance adjuster may be using bad faith claims handling practices.
Don’t hurry to call the adjuster after you’ve made a counter offer. They’ll interpret that to mean you’re getting desperate.
Don’t rush to fill in silent pauses during telephone negotiations. Wait.
Take time to think before you speak. It’s okay to pause before speaking and choose your words carefully. Answer simply, without too much elaboration, then stop talking.
You don’t have to rush to answer every question. If you don’t know the answer to a question, admit you don’t know or can’t remember. You can always get the information later. It’s much better to say you can’t recall an important detail than to give the wrong information.
Insurance adjusters have different tactics and styles. Some adjusters are sweet and try to lull you into confiding in them. Others are hard-nosed and can be downright insulting, saying things like, “I’m not paying for three weeks of lost wages, just because you wanted a free vacation.”
If you begin shouting or cursing, you only give that obnoxious adjuster the advantage. Take a minute to calm yourself, then speak in a regular tone of voice, “Mr. Smith, if you’ll take a look at the doctor’s notes from May 10, you’ll see the orthopedic surgeon said I could avoid knee surgery if I stayed off that leg for three weeks. It was not a fun time for me. I not only had to miss working at my construction job, I couldn’t coach my son’s baseball team, mow the lawn, or participate in family activities.”
By staying calm, you’ll not only maintain a strong negotiating position, you’ll show the adjuster you’d look good in front of a jury if your case ends up in court. Most adjusters would rather offer more to settle than risk a big jury award in your favor.
Attorneys and other professional negotiators understand that both sides need to compromise to reach an agreement.
Know your “bottom line” before beginning negotiations, but don’t reveal that amount to the adjuster. If the adjuster won’t come off a lowball settlement offer that won’t cover your losses, be prepared to hire a personal injury lawyer to file a lawsuit on your behalf.
On the other hand, it’s important to understand that you won’t walk away with the full amount of compensation in your demand letter. Take into consideration what it will cost to hire an attorney and pay litigation expenses if you don’t accept a settlement offer.
Carefully review the settlement agreement to be sure the dollar amounts and terms match the final settlement you agreed to with the adjuster. Be sure the agreement doesn’t include your property damage claim, unless that’s part of what you negotiated.
The agreement will be a “compromised settlement agreement” and may state that the insured and their insurer are not admitting blame for the collision. Most agreements also include a release of liability, meaning you cannot go after the other driver any time in the future for losses in connection with the accident.
Most insurance companies include a “confidentiality clause” in car accident settlement agreements that prohibits you from discussing how much compensation you get. You could be sued for breach of contract if you disclose your settlement amount to anyone, including on social media.
Never sign a release and settlement agreement that you haven’t read and fully understand. Once you sign an agreement, there’s no going back. The release and settlement agreement is a legally binding document.
Accusations of Comparative Negligence. Claims become complicated if there’s any question of shared fault for the accident. The insurance adjuster will argue that you share some of the blame for the accident and may even try to get you to admit some fault.
Don’t be manipulated into making admissions of shared fault in response to tricky questions from the adjuster, such as, “Could you have been distracted by your baby in the back seat?” or “It’s harder to see at night at our age, isn’t it?”
The adjuster knows that in states with contributory or comparative negligence laws, if you’re partially to blame for the accident, your settlement can be drastically reduced, or you could end up without a dime.
Looming Statute of Limitations. Every state has a statute of limitations for car accident injury claims. If you haven’t settled your claim or filed a lawsuit before the statute runs out, you forfeit your right to any compensation for your injuries.
It’s up to you to know the statute of limitations for your claim. The adjuster does not have a legal obligation to warn you when the statutory deadline is looming. Nor does the car insurance company have to help you settle your accident claim in time.
Assurances You Don’t Need an Attorney. When the adjuster says you don’t need a personal injury attorney, be on guard. When you’ve been seriously injured in a motor vehicle accident you’ll need legal advice from an experienced attorney.
Severe, potentially permanent injuries like head trauma, spinal cord injuries, facial scarring, or injuries that require hospitalization and a long recovery are high-dollar claims.
Don’t trust the insurance company to look after your best interest, especially if the adjuster says you won’t need an attorney. Most car accident lawyers offer a free consultation to accident victims. It costs nothing to get a professional evaluation of your insurance claim.
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