How to Negotiate an Auto Insurance Settlement
Last Updated on August 21, 2020
Getting into a car accident can be really stressful, especially if you have no experience in negotiating an auto insurance settlement. People who aren’t aware of the settlement process often end up getting a low settlement amount from their insurance claims adjuster. This is why it’s important for you to learn more about how the settlement and negotiation process works. By doing so, you’ll be able to comfortably negotiate with the insurance claims adjuster and get a settlement amount close to what you’re asking for.
Preparing for a Car Insurance Settlement
Before you proceed with the settlement negotiation process, you should first prepare yourself by studying your insurance policy and your claim. Here are some things you should make sure to examine:
- Identify what damages are covered by your insurance. Familiarize yourself with what kind of insurance you have and what is covered by your policy.
- Find out what your insurance claim is worth.
- Figure out the fair settlement range for your claim. To get a better idea of the value of your claim and settlement, please visit the accident value calculator.
- Learn when it’s time to seek legal advice and then hire a lawyer.
How Does the Settlement and Negotiation Process Work?
So how does the settlement process actually work and how do you negotiate with the insurance claims adjuster?
The settlement process is preceded by a demand letter that you will write to your insurance company. It is in the demand letter where you will state how much you are looking to get for the settlement amount.
Once you’ve sent your demand letter, a series of phone calls with an insurance adjuster shall follow. During the first phone call, you will have to explain to the adjuster why you asked for the settlement amount stated in your demand letter. At this time, you should state the strengths and weaknesses of your claim. During this stage, the insurance adjuster will try to point out the weaknesses of your claim to lower the settlement rate. More often than not, insurance adjusters counter with the lowest rate in their range. This is why it’s important not to jump on the first offer.
One of the best things to do during the negotiation process is to take a pause. You can always tell your insurance adjuster that you need to assess the points he/she made about your claim. You can then continue to propose a counteroffer on another phone call.
Simply repeat this process until the insurance adjuster settles on a value that’s close to what you’re demanding.
Useful Tips for Negotiating with an Insurance Adjuster
If you don’t have any experience negotiating with an insurance adjuster, you may get easily swayed by the adjuster into taking a low offer. Before you start negotiating with the adjuster, try to be mindful of these useful negotiation tips:
1. Don’t settle for the first offer
Like we mentioned above, adjusters often start by offering the lowest amount in their range. This is usually a strategy for adjusters to figure out how much you know about negotiating settlements. When an adjuster makes their first offer, you can always politely decline and make a point as to why your claim is worth more than what they’re offering.
2. Always ask the adjuster to justify a low offer
Asking the adjuster to explain why they’re offering a low amount is one way of letting the adjuster know that you are on top of your game. The key to countering a low offer is asking for specific reasons why the adjuster came to a low offer. Once you have the adjuster’s reasons, write a letter in response.
Before you settle for a lower amount than what you’re demanding, make sure to talk to the adjuster about your response. Doing so can make the adjuster more likely to offer a more reasonable settlement amount.
3. Explain how the accident has affected your life
Car insurance settlement negotiations are often technical. What some people don’t know is that emotional points can get you a higher offer too. For example, you can discuss how much the accident has affected your daily activities, your responsibilities to your family, your ability to care for your child or children, and so on.
How Long Does a Car Accident Settlement Take?
The length of a car accident settlement will depend on how much you are demanding. A settlement can take as little as a couple of days or as long as a few months. However, if you believe that your settlement should be finalized quickly, but is being dragged on for a long time, you can take further legal action.
If you do plan to take further action, you can seek help from an attorney. An attorney can speed up the negotiations by writing a final settlement letter at the threat of legal action. Your attorney can also help you file a lawsuit if the negotiations aren’t working for you. Often times, your insurer will request that the claim goes into arbitration before an expensive lawsuit is filed.
For best results, try to contact your insurance adjuster on a daily basis. Doing so will keep your file constantly updated and on top of their claim’s file. It also lets your insurance adjuster know that you are constantly checking for your settlement’s progress.
Finalizing the Settlement
Once you and your insurance adjuster have come to an agreement, the final thing you should do is finalize the settlement through a letter. Remember that taxes and legal fees might take a chunk out of your settlement dollars, so keep that in mind when finalizing the amount.
Confirm the settlement amount you agreed upon by writing a brief letter stating what damages or injuries the settlement will cover, how much is the amount you settled for, and the date you will receive the settlement documents from your insurance company.
The Bottom Line on Negotiating Settlements
Negotiating an auto insurance settlement may seem like a daunting task, but if you prepare yourself with the right knowledge regarding your insurance policy along with the how-to’s of negotiating with an insurance adjuster, you will certainly be able to get a fair settlement amount for your claim.
Well, there you have it. A quick guide on how to negotiate an auto insurance settlement. Remember, if you encounter any problems negotiating with your insurance adjuster, or if you feel like they’re dragging your settlement for too long, you can always seek legal help from an attorney for further legal action.