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How To Negotiate a Car Accident Settlement

A car accident is over in a matter of seconds. But the road to recovering money for damage to your vehicle, bodily injury, or both can be a long and frustrating journey. With a little preparation and patience, you'll find that you can successfully negotiate your car accident settlement.

The first step in the negotiation process is writing a demand letter to the insurance company, which must address the amount you need to cover your damages. You'll need to attach documentation supporting your request for that amount. Examples of documentation you'll want to attach are medical bills and any documents detailing other related out-of-pocket expenses.

Upon receiving the letter, the auto insurance company will assign your demand to a claims adjuster. An insurance adjuster's primary goal is to settle car accident claims quickly while paying you as little as possible.

The negotiation process is not much different than haggling over an item at a yard sale. Each party has a minimum and maximum price in mind. You may go back and forth with offers and counteroffers several times until reaching an agreement. You don't need to be a fast talker to settle your car accident claim. You just need to follow these simple steps to learn how to negotiate a car accident settlement.

Know What Your Car Insurance Policy Says

There's no point in negotiating for something the insurance policy does not cover. In the exclusion section of the policy, you'll find mention of what the policy does not cover. So, before you begin the process, you'll want to read the insurance policy declaration page to learn what is covered and the payment limits.

Have a Number in Mind

There are basic types of damages an accident victim injured in a car accident can recover, such as medical expenses and property damage. After you have added up all the bills, receipts, and losses you suffered because of the accident, establish a minimum and maximum payment range that works for you. This is your personal number. Do not share it with the insurance company. Remember that a claims adjuster will never give you more than you ask for. You'll want to aim high.

Don't Be Upset by the First Offer

There's no point in negotiating for something the insurance policy does not cover. Before you begin the process, read the insurance policy declaration page to learn what is covered and the payment limits.

If the initial offer is reasonable, give a written counteroffer that is below the amount in your original demand letter. This shows that you are negotiating in good faith.

What if a first offer is very low? It may just be a negotiating tactic. Ask the insurance company for justification for their offer. Have the insurance company provide you a written response highlighting their points and bases for their coverage decision, along with any evidence they have to support that decision. It's important to consider the adjuster's comments honestly, but do not immediately decrease your demand when presented with a low offer.

Be Patient but Persistent

Negotiating a car accident settlement can take several months. It can feel like a lifetime if you are waiting for repairs to be made to your car or have medical bills piling up. It's important to stay calm during the process and keep your interactions professional. It can be maddening if an adjuster hints that you are not actually injured. This could be a negotiation tactic, so don't let your emotions get the better of you.

Although the settlement process can be lengthy, your claim should be handled in a timely manner. An adjuster typically has 30 days to investigate your claim. Keep a calendar of your interactions with the insurance company. If you have not heard anything for a few weeks, contact them to see where they are in the settlement process. Let them know you are being patient but expect results. Claims can be reassigned or even misplaced, so it is important to keep track of your claim.

Accepting an Offer

It's your decision whether to accept or reject a settlement offer. Factors to keep in mind include:

  • How far apart the offer and the demand are
  • How much more you are likely to receive in court
  • The expense of taking your claim to court
  • The additional time and uncertainty of a court resolution

Once you reach an agreement, detail the terms in a letter and send it to your claims adjuster using registered mail, return receipt requested. This provides an important legal record. Within a few weeks, you should receive a release of liability agreement from the insurance provider and a check. The release form will be either a general release (which releases everyone involved, including your own insurance company) or a limited liability release (which allows you to pursue other claims you may have against other insurance companies, including your own uninsured motorist insurance). If you have any questions about the terms stated in this agreement, ask before you deposit the check or return the form.


Below are some common questions about negotiating a car accident settlement.

Q: What does 'pain and suffering' mean in a personal injury claim?

“Pain and suffering" refers to the physical and emotional distress caused by an injury. This can include actual physical pain, depression, insomnia, and other emotional and psychological trauma. These are often calculated as part of your settlement amount.

Q: How do settlement negotiations work in an auto accident insurance claim?

Settlement negotiations start when you send a demand letter to the insurance company outlining the damages and amount you're requesting. The insurance company's adjuster will then review the claim and may counter with a lower offer. You can then go back and forth until you reach an agreement.

Q: How does my medical treatment affect my personal injury claim?

Your medical treatment plays a vital role in your personal injury claim. Medical records provide evidence of your injuries and the necessary treatments, which can significantly impact your settlement amount.

Q: How does the police report factor into my injury settlement?

The police report provides an impartial third-party account of the accident, including the details of the incident, the involved parties, and, in many cases, who was at fault. This can be influential during settlement negotiations.

Q: What role do my medical records play in a personal injury lawsuit?

Medical records are important in personal injury cases as they provide documented evidence of your injuries, the severity of those injuries, and the required treatment. They can also show the impact of the injuries on your life.

Q: What is the driver's insurance role in my settlement amount?

The driver's insurance company is usually the entity responsible for paying out the settlement amount. The amount you can claim, however, may be limited by the driver's insurance policy limits.

Q: How do I get fair compensation?

To ensure you get fair compensation, accurately calculate all your damages, including medical care costs, property damage, lost wages, and pain and suffering. A personal injury attorney can help you in this process.

Q: Can health insurance affect my auto accident claim?

Health insurance can affect your claim because if your health insurance pays for your medical care, they may seek to be reimbursed from your settlement (a process known as subrogation). The rationale behind subrogation is to prevent double recovery.

If you were to receive compensation for your medical expenses from both your health insurance company and the at-fault party, it would be considered unfair and result in a windfall for you. Subrogation helps ensure that the responsible party bears financial responsibility for the harm they caused.

Q: What is the statute of limitations for a personal injury claim after a car or truck accident?

The statute of limitations for personal injury claims varies by state but is typically between one and six years from the date of the accident. If you don't file your claim within this period, you may lose your right to sue.

Q: How does a truck accident differ from a car accident in terms of the settlement process?

Truck accidents can involve different laws and regulations compared to car accidents due to the commercial nature of trucks. The settlement process may also be more complex due to the potential involvement of more parties, such as the trucking company, truck manufacturer, and cargo loader.

Speak to a Personal Injury Lawyer About Negotiating a Car Accident Settlement

Your negotiation with the claims adjuster is the most important part of obtaining a fair insurance settlement agreement for your accident damages. It can make a difference to have an experienced negotiator on your side. An experienced car accident attorney in your area can help you with the car accident case settlement process and any other claims you may have.

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