Avoid these costly mistakes when negotiating with the insurance company to make sure you get maximum compensation after a car accident.
More than 2 million people are injured in auto accidents on American roadways each year, racking up over $260 billion in crash-related costs.¹
Most of those billions of dollars will be paid out by insurance companies.
Not surprisingly, insurance companies don’t like to part with that kind of money, so their claim adjusters are specifically trained to avoid large settlement payouts to claimants like you.
To get the compensation you deserve, you’ll need to know how to negotiate your insurance settlement like a pro, and the pitfalls to avoid. This guide will help.
Simple Mistakes Can Cost You 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 settlement payouts. The insurance company’s unofficial motto is, “pay as little as possible.”
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.”
Keep an eye out for a Reservation of Rights letter. The letter is a standard notice stating the insurance company is working on your claim, but all your losses may not be covered under the policy.
Most claimants get the same Reservation of Rights letter, no matter how much compensation they end up with.
Avoid Making Admissions Against Interest
Car accidents are traumatic events. In these stressful situations, people often say stupid things. They admit fault, threaten to file lawsuits, verbally abuse the other driver, and worse. If you’ve been in an accident, stay calm and think before you speak.
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 at accident scenes 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. They may come back to bite you.
On the other hand, stay alert to comments made by the at-fault driver, or the occupants of the car that hit you. Make detailed notes about any admissions the driver makes and any comments you hear from the other car’s passengers that might help your claim. See how that works?
Know When it Pays to Have an Attorney
Car accident victims who have recovered from minor injuries can usually negotiate an insurance settlement without the help of an attorney. Soft tissue injuries like bumps and sprains are usually straightforward.
Your settlement demand will include the actual costs of your medical bills, the cost of any physical therapy, your lost wages for a few days missed from work, and a minimal amount for pain and suffering.
Severe Car Accident Injuries are Expensive
When you’ve been seriously injured in a motor vehicle accident you’ll need the help of an experienced personal injury attorney to get anywhere near the amount of money that will fairly compensate you for your injuries, pain and suffering.
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. The sad fact is, insurance companies routinely offer lower settlements to claimants without representation.
Watch Out for 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 that will be used against you 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 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.
If you have any question about the value of your claim or the complexity of your case, contact a personal injury attorney to discuss the best way to handle your injury claim.
Demand the Right Settlement Amount
Don’t go into a settlement discussion without knowing the value of your claim. The insurance adjuster is more than happy to offer you a “nuisance value” to settle the claim quickly and make you go away.
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.
Do your homework before you get started. If you don’t have all your medical bills, make a proper request for your medical bills and records.
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.
You are perfectly justified in requesting a reasonable amount of money for your pain and suffering and inconvenience caused by the accident. Settlements for minor injury claims typically include an amount for pain and suffering that is one-and-a-half to three times the amount of your medical costs.
You won’t be taken seriously if you ask for hundreds of thousands of dollars in pain and suffering for a sprained wrist that kept you out of work for three days.
Big Don’ts When Negotiating for Compensation
There are some common errors claimants make when negotiating with the insurance company. If you avoid these mistakes, you’ll be in a strong position to demand fair compensation.
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 strict business tone on your first contact and keep it that way.
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.
Don’t be manipulated by the adjuster. 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 preach or offer opinions. That 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
Don’t lie. Avoiding mistruths is always good negotiating advice. Lying serves no purpose. If the adjuster catches you in a lie, no matter how small, you’ll lose all credibility. From that point on, anything you say will be suspect.
Don’t sign any medical releases, yet. 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. The adjuster doesn’t need that information at the start, and should never need your entire health history to settle a minor injury claim.
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.
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.
Don’t say, “I have whiplash.” The term whiplash is 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.
Don’t exaggerate. 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 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.
Don’t take for granted your claim will settle. Always keep in mind the possibility your case will end up in court. What you say now may have to be repeated on a witness stand, in front of a jury. Prepare your claim as if you may ultimately have to file a lawsuit.
Don’t think you must have the answer to 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. Remember to always negotiate from a position of strength.
Video: Settlement Negotiation Mistakes to Avoid
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