Dealing with the aftermath of a car accident can be a stressful situation. In many cases, drivers find themselves entangled with insurance companies to get claims paid in a timely fashion. If you're wondering how to negotiate an insurance settlement for your car, it's important to know what information the insurance company needs and how to increase the chances of a successful outcome.
Negotiating Car's Value to an Insurer After an Accident
When you are involved in a car accident that causes significant damage to your vehicle, the next step is getting compensated by the insurance company that provides the policy on the car. However, getting a fair price for the damage is often a challenge, as an insurance company loses money when it has to pay out following an accident.
According to Value Penguin, claims adjusters who work for insurance companies try to pay the smallest amount possible for the damages that occurred to your vehicle. Before you accept the first offer you receive from an insurance company, be aware that you can negotiate to get what you deserve. The first step in the negotiation process is figuring out the true value of your vehicle. A claims adjuster will make a determination of what it will cost to perform repairs to your vehicle but knowing its value can assist you in your negotiation.
The two main types of claims in this situation are first-party and third-party and which type depends on who is found to be at fault in the accident. If you are using first-party benefits, you will be dealing with your own insurance provider. Third-party benefits come from the insurance company that insured the other driver in the accident.
Tips for Negotiating With an Insurance Company
As you prepare for your negotiation with the insurance company, it's helpful to follow a few tips. The first is to avoid taking the first offer made. According to Nolo, Sutliff & Stout, and Findlaw.com, an insurance adjuster will often make an extremely low first offer to determine whether you know how to negotiate or understand the value of your car. Even if the offer seems reasonable at first glance, you should always negotiate.
After you research the value of your car, come up with a number that you feel is fair for a settlement. It should be the absolute minimum you are willing to accept. Keep this number in your mind but don't reveal it to the adjuster as it could impact what they offer to you. Your minimum settlement amount should serve as your bottom line when you feel the pressure that comes with negotiating.
Since this number will remain in your mind, you don't have to cling to it. During the negotiation process, the adjuster may point out information that alters what your car is worth or how you are looking at the situation. Additionally, if the first offer from an adjuster comes in near your minimum amount, you may want to consider increasing that amount.
After you decide on a minimum amount, you should also calculate what you believe is a fair settlement for the damages. When calculating the fair settlement amount, be sure to consider:
- Any suffering and pain caused by the accident.
- The cost of any required medical care and other related expenses.
- Whether your injuries caused you to be unable to work and lose income.
- The cost to repair or replace your vehicle.
- The cost to repair any property damaged during the accident.
- Whether you will require long-term medical care or suffered permanent disabilities.
As you take this information into account, determine the value of all aspects and come up with a minimum settlement amount. If you are having trouble calculating a reasonable and fair settlement amount, consider consulting with a personal injury or automotive accident attorney.
Now that you have a minimum settlement amount based on your calculations, the next step is sending a demand letter to the insurance company. In this letter, you should:
- Describe the car accident in detail.
- Outline any injuries you sustained as a result as well as any medical treatment that was required for the injuries and ongoing health issues.
- Describe the extent of damage caused to your vehicle.
- Discuss any other losses or damages that occurred as a result of the accident.
Next, the letter should include the settlement amount you are demanding, although it should be 25-100% higher than your minimum as the insurance company will most likely offer you less than what you demand. Be sure to include any documentation or evidence that backs up the claims made in your demand letter. Failure to produce evidence can result in a lower offer than what you deserve.
If the insurance company responds to your demand letter with a reasonable offer, you can counter with an amount that is lower than what you demanded. By doing so, you can show the adjuster your willingness to compromise. Continuing to go back and forth through the negotiation process should get you to an amount that you both agree is reasonable and fair.
After you come to an agreement with the insurance adjuster, make sure you receive the agreed-upon amount in writing. You can write a letter to the adjuster with the negotiated amount. When writing this type of letter, keep it simple and only include several key pieces of information:
- The agreed-upon settlement amount.
- The date when you expect to receive additional documentation or the settlement amount.
- What damages and/or injuries are covered by the settlement.
Negotiating a Personal Injury Settlement Without a Lawyer
Alllaw.com reports that it is certainly possible to handle a personal injury claim without hiring a lawyer. However, it's important to know what is involved in the negotiation process and what you're getting into by taking it on yourself. When it's clear who is at fault and the injuries are minor, it's usually more cost-effective to handle the negotiations on your own. Most personal injury attorneys take a cut of one-third of the settlement amount, so it has to be a high amount to make it worthwhile to hire an attorney.
If you're negotiating a settlement, use these tips to increase your chances of a positive outcome.
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