How To Negotiate Injury Settlement with Insurance Company

How To Negotiate Injury Settlement with Insurance Company. Most personal injury claims settle.  Sometimes they settle before having to file a lawsuit.  Other times they can’t be settled without having to file a lawsuit.  But, even if you file a lawsuit, settlement negotiations can be ongoing and you can settle at, or even after trial.

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How to get the best injury settlement from the insurance company after any type of accident.

Negotiate injury settlement

Key Take Aways:

  • Most personal injury cases settle
  • Present your evidence
  • Have an amount in mind
  • Play it cool
  • Highlight your strengths
  • Confirm it in writing

Most personal injury claims settle.  Sometimes they settle before having to file a lawsuit.  Other times they can’t be settled without having to file a lawsuit.  But, even if you file a lawsuit, settlement negotiations can be ongoing and you can settle at, or even after trial. 

How Do I Write a Demand Letter?

First, notice that I did not say that you should call the insurance carrier.  The other side’s insurance carrier is employing a tricksy claims adjuster, who will do everything they can to minimize the value of your claim.  You can try to beat them at their game, but that’s like trying to beat a shark in a swimming contest. 

Instead, you should start off with a written demand to the insurance adjuster.  The demand letter should be organized.  It should include supporting documents.  You should include things like:

  • Accident or police reports;
  • Summary medical records;
  • Medical bills;
  • Wage statements to support claims lost earnings; and
  • Anything that shows the emotional toll this has had on your life. 

The letter should be simple.  If it’s the other side’s fault, and you know it’s the other side’s fault because of the police report, say it’s the other side’s fault and you know it’s the other side’s fault because of the police report.  No one gets better results by trying to sound like a lawyer.

Young woman writing a demand letter attempting to Negotiate Injury Settlement

How Much Is My Case Worth?

Usually people who are at fault in accidents, or rather their insurance company, must pay the injured person for:

  • Medical care;
  • Lost income;
  • Permanent physical disability or disfigurement;
  • Loss of experiences, like family gatherings, social engagements, and even vacations;
  • “Pain and suffering” and emotional distress, which is some amount to compensate you for the stress, embarrassment, depression, and strain resulting from the accident; and
  • Damaged property.

Medical bills and income are pretty easy to add up.  The rest is a little trickier.  When the injuries are relatively minor, an insurance adjuster typically provides for a 1.5-2.0 multiplier of the medical bills and the lost earnings to cover the rest of the stuff.  So, for example, say your medical bills, and lost income are $1 and you’re already more or less okay.  The adjuster might offer you $2.50 to settle your claim ($1 + 1.5 x $1).  But, if your injuries are particularly painful, or serious, or long-lasting, the adjuster could multiple the amount by 5x or even 10x.  So, for example, say your medical bills are $1 Million, and you got really messed up, the adjuster might offer you $6 Million ($1 Million + 5 x $1 Million). 

The equation doesn’t end there though.  Once the adjuster figures out how much your damages are, they multiple it by the percent you are at fault.  So, say you’re thinking you’re good for that $2.50.  But, now let’s say the adjuster thinks you were 50% at fault, the adjuster isn’t going to offer more than $1.25.  Never count on adjusters offering much, especially up front. 

The more you can do to make the adjuster think their client was 100% at fault, and your case is one of those 5x, or 10x cases, the more likely they are to offer you that.  But, don’t be afraid to adjust your number up or down accordingly in your attempt to negotiate injury settlement.  For example, say the adjuster says the police report says their driver is at fault.  But, there is traffic cam footage of you very clearly running the red light.  You take a look at the traffic cam footage, and it doesn’t look good.  Well, you might have to adjust your number down. 

Should I take the Insurance Company’s Offer?

Insurance adjusters often offer nothing, or next to nothing, initially.  They like testing you to see if you know what you are doing.  If the adjuster makes an offer that is so low, it feels insulting, it’s often a negotiating tactic.  One of the best ways to overcome that negotiating tactic is to ask them to justify their insultingly low offer.  Then, write a brief letter responding to each of the factors they adjuster has mentioned.  Depending on the adjuster’s reasons, you might want to lower your demand a little, but before lowering it very far, you want to see if the adjuster is willing to budge.  Remember that the adjuster wants to settle your case too…just for a lot less money. 

Sometimes adjusters offer reasonable amounts.  You might want to ask why they won’t just accept your amount before countering with another reasonable amount. 

At some point the adjuster might make a “last, best, and final” offer.  They might call it something else.  But, they will make it clear, “If you want more, you are going to have to sue us.”  Don’t be afraid to walk away.  You can ask a personal injury attorney to negotiate injury settlement on your behalf – if your own attempts did not make the case too messy. Plenty of people have tried to negotiate with an insurance company, gotten so frustrated with the process that they hired a lawyer, and won huge verdicts against the insurance company who offered them peanuts before.  “No” is a powerful word. 

How Do I Get an Insurance Company to Offer Me More Money?

Don’t bother going over all the facts again, unless there is an important fact that the insurance adjuster seems to have totally overlooked.  Most of the time you just want to hammer home the best facts.  For example, the insured was completely at fault, the accident was very painful, or left you permanently disfigured, and/or that your medical costs were not overblown. 

But, it might even be more helpful if you emphasize the emotional points supporting your claim.  For example, photos of a smashed car, or bike, or gnarly injury can go a long way toward helping the adjuster see you as a human and more than just a claim number.  Stories about your humanity can go even further toward helping the adjuster.  For example, say you injured your back in the accident, and now you can’t pick up your toddler, and now your toddler has suffered as a result.  Think of the adjuster as being like the Grinch.  The goal is to get his heart to grow a few sizes for you.

There is no real way to put a dollar amount on these damages, but, you’re going to have to try, and if you succeed, you might convince them to pay you more money. 

What Do I Do If I Reached an Agreement with an Insurance Company?

Maybe the adjuster was reasonable from the get go, and after a few rounds of back and forth, you reached an agreement.  Maybe the adjuster started completely unreasonable so he could test you, but then after you proved your metal he softened, and you reached an agreement.  However, it happened, if you reached an agreement with an insurance adjuster, you are going to want to put the terms of the agreement in writing.  The adjuster will undoubtedly have a longer form settlement agreement, and release of claims they will want you to sign.  That will undoubtedly ask you to relinquish your rights to everything under the sun.  I’m not talking about that.  I’m talking about a quick confirmation writing outlining the terms of the deal.  Sometimes they’re called “Deal Point Memos”.  Sometimes they’re called “Confirmatory Memos”.  It doesn’t really matter what you call it.  But, it should be short and sweet and confirm:

  • The date you reached the agreement;
  • The amount you settled for;
  • What injuries or damages the settlement covers; 
  • The date by which you expect to receive settlement documents; and
  • The date by which you expect to receive settlement proceeds, from the insurance company. 

It doesn’t have to be fancy.  It can be an email with the above bullet points to the adjuster.  For example,

“Dear Fred,

This confirms our agreement reached today:

  • Evil Inc. will pay me $100;
  • The $100 compensates me for injuries and damages from January 3 car accident;
  • Evil Inc, will have settlement documents to me by December 1, and
  • Evil Inc. will have settlement proceeds to me within 30 days of signing settlement documents. 

Lots of folks want to cut a deal with the insurance company.  It’s faster than litigating.  It’s typically cheaper than litigating.  But, you might not recover as much.  You might say something that could hurt your case.  Some lawyers won’t take on cases when people have tried to negotiate with the insurance company on their own because it can become such a mess.      

If you’re concerned about handling an insurance claim and negotiate injury settlement on your own, an attorney might be able to help you.  We take on personal injury cases on a contingency fee basis meaning we only get paid if we get you paid.  We offer a fast, free, completely confidential case evaluation.  Just fill it out, and it goes directly to award-winning, personal injury attorney John McCarthy’s inbox. 

Attorney McCarthy has a perfect 10.0 rating on Avvo, is recognized as a “SuperLawyer” by his peers, and is considered to be the best personal injury lawyer on the Central Coast.  If he thinks we’re in a position to help, he’ll email you and set up a free consultation.  If he doesn’t think we’re in a position to help, he’ll help get you pointed in the right direction. 

What do you have to lose?   



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