If you have been injured in an accident through the fault of someone else, you will need to negotiate a settlement with the insurance adjuster for the at-fault person (or entity). This is a long and difficult process, and if you choose to represent yourself rather than hire a personal injury lawyer to help you, you need to be aware of just how difficult it can be to receive the compensation you are properly entitled to.
This process begins the moment you pick up the phone to call the adjuster, report your injury and file a claim. It doesn’t end until you either have a signed agreement accepting the insurance companies offer to settle your case, or you decide to reject their offer, hire a lawyer, and push forward with a lawsuit.
The purpose of this article is to give you general information about how to negotiate the best possible settlement with the insurance adjuster without hiring a lawyer. However, some of this information may not apply in your situation and this information should never be taken as a substitute to consulting with an experienced personal injury lawyer about the specific circumstances of your case.
Only a licensed attorney in your jurisdiction can give you legal advice about your personal situation. And while it is always possible to negotiate a favorable insurance settlement on your own, hiring an experienced personal injury or car accident lawyer will give you the best opportunity to maximize the amount of compensation you receive for your injuries.
How the Personal Injury Claims Process Works
As mentioned above, the personal injury claims process begins the moment you pick up the phone to call the at-fault party’s insurance company and report your injury. Alternatively, you may also report the claim to your own insurance company if you decide to make a first party claim, which typically happens in situations where the person who caused the accident was either uninsured or underinsured. This process doesn’t end until you make a decision to accept or reject the best offer you can get from the insurance adjuster.
This entire process is going to be a struggle. You have to maintain your “A” game throughout and be confident and prepared when you talk to the adjuster. Through each step of the process, you must be prepared to question what the adjuster tells you because they will most definitely be using every tactic and strategy possible to pay out as little money in compensation as possible.
Before we dig into the details of the negotiation process, let’s step back and consider your claim through the mind of the adjuster.
A Day in the Life of an Insurance Adjuster
Being an insurance adjuster is an administrative, unglamorous and thankless job. The adjuster assigned to your file probably has a windowless cubicle in an office complex somewhere, surrounded by other adjusters who are also overworked and underpaid.
Their main job is to try to get through all their files and close out as many as possible, as quickly as possible. They may even be paid bonuses based on the amount of claims paid out or on how quickly they are able to close their files.
Their interest is not in changing the world, they just want to leave at 5 o’clock everyday, collect their paycheck, and live their lives without pissing off their bosses. They have a lot of claims to get through, and many of them are filed by people with minor injuries who are just looking for a big payday.
There is a lot of turnover in this injury because of the demands and stresses of the job. Being an insurance adjuster is not a fun job, many times people don’t want to talk to them, they get yelled at a lot, and they just want to get through the day so that they can leave on time.
You must understand that the insurance company wants to make money, and they do that by minimizing the value of the claims they pay out. The insurance adjuster is the gatekeeper who works for the company and is looking for ways to reject or minimize claims. They want to keep the company from paying out on frivolous claims.
One of the single easiest ways for them to do this is by reviewing and enforcing the insurance policy. An insurance policy is nothing more than a contract, and if the adjuster can find a way to enforce the policy and reject the claim, they will do that.
So in a nutshell, when you are dealing directly with an insurance agent, try to consider what their life is like. Be kind to them and treat them with respect, but at the same time you need to be persistent and make sure that they hear what you are telling them and can find the motivation to pay out your claim.
8 Steps to Maximizing Your Insurance Settlement
There are 8 typical steps to negotiating a settlement with the insurance company. We are going to take them one-by-one.
- You file the claim
- You receive a letter from the insurance company
- You send a demand letter
- You receive a response to your demand letter
- You reject the initial offer and counter with a second offer
- Negotiations continue
- You decide to accept or reject the best offer you can negotiate
- You sign settlement documents or call a lawyer to prepare for a lawsuit
Let’s jump right in.
You file the claim
The first step of the process is to file a claim with the insurance company. We recommend that you do this as soon as possible after the accident, typically within 24 hours. The most common way to file a claim is to place a call, but some companies will also allow you to file a claim online. We recommend that you provide as little information as possible when you make this call. Typically you will tell them your name, the name of the person who hit you, the location of the accident, and that you are injured. That’s it.
Don’t tell them that you are feeling ok. (They will ask).
Don’t tell them the name of your doctor.
Don’t tell them what your injuries are (you don’t know yet).
Don’t offer to sign a release.
At this point, you just want to put the insurance company on notice that you have a claim.
You receive a “reservation of rights” letter from the insurance company
After you file the claim, you should expect to receive a “reservation of rights” letter. Basically, this is a letter that will inform you that although the insurance company will investigate your claim, it is reserving any defenses it has under the insurance policy. In addition, this letter will indicate that by talking to you and conducting its own investigation, the insurance company is not admitting any liability for the accident or claim. If this letter scares you or you have questions about the legal language it contains, you should contact a personal injury lawyer for advice and guidance.
You send a demand letter
After you have completed your medical treatment and are starting to feel better, you can send your initial demand letter. These are letters that can be as simple or as detailed as you would like, depending on the facts of your particular case and your goals in sending out the demand letter.
Most demand letters spell out the fact of the case, your injuries, and then itemize your special damages, including your medical bills, lost wages, and other out-of-pocket expenses.
After reviewing your special damages, you will explain the amount of money you are seeking in general damages, aka pain and suffering. Pain and suffering is typically a multiple (between 2-5x)of the special damages, but can vary greatly from case to case.
You will combine your special damages and pain and suffering to come up with a total settlement demand for your case. Regardless of the amount you choose to place in your settlement demand, you should anchor yourself high. As explained below, the insurance company will counter with a low-ball offer. Don’t ask for what you actually are hoping to get with your first offer – they are unlikely to accept it.
You receive a response to your demand letter
Within several weeks, the insurance adjuster will respond to your initial demand letter. This response could come in the form of a phone call or a letter. If the adjuster calls you, they probably want to convey their own offer and “talk to you about it”. This is where the real negotiations begin.
Calling you is one technique that the adjuster will use to try to “low-ball” you and get you to agree to a quick settlement. They will tell you things that are more likely to get you to agree to their offer and settle your case, before you talk to a lawyer or decide to counter-offer.
Here are some of the responses you may expect from the adjuster:
- Your claim is worth substantially less than your settlement demand;
- Your medical bills and other special damages are way too high for your type of injury;
- This is a “one-time offer” that you must accept or they have been instructed to pull the offer and stop negotiating; or,
- They don’t have the “authority” to settle the case for the amount you are asking.
Do not be shocked at the initial offer from the insurance company. The insurance adjuster is testing you. They know that a certain percentage of people will take their initial offer outright, without conducting any additional settlement negotiations. They want to know if you fall into this category of claimants or if you will push back and negotiate for what your case is actually worth.
While it is possible that the initial offer from the adjuster will be fair and reasonable, this is the exception and not the norm. If you are unhappy with the initial offer from the insurance adjuster, you next step is to reject that offer and send them a counter-offer.
You reject the initial offer and counter with a second offer
If the initial offer from the insurance adjuster was made over the phone, you should ask them to send a follow-up letter confirming the offer. This will give you some time to think about how to proceed, even though you already know you will be rejecting that offer and sending a counter-offer.
There is a true art to negotiating, and in your counter-offer you should let them know that you received their offer and that you are rejecting it. You should reiterate and highlight the most important details of your claim, and then respond with a counter-offer of your own. Don’t drop your number too much, but you should reduce it a little. You want them to understand that you are willing to compromise in an effort to reach a settlement.
At this point, settlement negotiations will continue back and forth until you are either able to reach a resolution or negotiations stall out. If you send out a counter-offer and don’t hear back from the insurance company right away, that is ok. If you call them to push things along, you will diminish the value of your claim. Be patient in your negotiations, and always remember to reiterate the strongest parts of your case in every conversation you have with the adjuster.
You decide to accept or reject the best offer you can negotiate
At some point in the negotiations process, it will become evident that either you or the adjuster has reached the end. You may decide that you won’t go any lower, or the adjuster may let you know that you are receiving their final offer.
At this point, you must decide which direction to go. Do you want to accept the final offer or do you want to push this matter to court? Assuming you decide that the settlement is acceptable to you, then you will move on to the next step. If it isn’t, or if you aren’t sure, you should call a lawyer to help you evaluate the offer.
[box type=”info”] At our law office, we will never charge a client a fee on the amount of money they have already negotiated. We only charge a fee on the amount of compensation we can recover that is over and above the settlement offer that the client has already received. Call us at (919) 883-4861 to talk to us about your case.[/box]
You sign settlement documents or call a lawyer to prepare for a lawsuit
If you decide to accept the settlement that the insurance company is offering you to settle your case, then the lawyer for the adjuster will prepare a the settlement paperwork and a release of claims. There are significant legal consequences to settling a personal injury case, including the resolution of liens and possible subrogation rights. If you aren’t sure what all this means, there are other articles on this website to help you, or you can contact a personal injury lawyer for assistance.
Tips for Negotiating Top Dollar for Your Accident Claim
There are a number of ways that you can help your chances to receive top dollar for your accident claim. But here are three of the best ways to make sure you don’t let the insurance company take advantage of you.
#1 – Be thorough and prepared. You will know your case better than anyone, including the adjuster and even your lawyer (should you decide to hire one). If you are organized, thorough and prepared, it will come through in your negotiations. Make sure you understand not only the ins and outs of your case, but also the personal injury process in general. This website is a treasure trove of information that will help you in that regard. But the best way to improve the value of you case is to adequately prepare for every interaction you will have with the adjuster.
#2 – Relax. By relax I really mean to be patient. Many claimants will jump at the first settlement offer they receive, costing themselves thousands of dollars in the process. If someone told you that you could have $1,000 today or $25,000 next month, don’t you think you would figure out a way to wait it out? Of course you would. The same is true here. Be patient and never accept their first offer.
#3 – Never back down. Claimants who receive the highest settlements are persistent. They never back down. If they don’t hear something from the insurance company, they will follow-up in a reasonable time period. They don’t let their claim languish. Personal injury claims are like a garden. You must water and feed the plants, prune them, and tend to them on a regular basis. If you don’t the plants will die, and so will your auto accident claim.
Return to the Personal Injury Claim Guide
If you have a question for us, you can submit it confidentially online by clicking here. You can also call The Hart Law Firm at (919) 883-4861. We are happy to speak to you and answered any detailed questions you may have.