Insurance » Auto Insurance » How To Negotiate Car Accident Insurance Settlements?
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How To Negotiate Car Accident Insurance Settlements?

Insurance companies want to save money, so they might look for different ways to undervalue your damage. Here's how to negotiate effectively - and win
Author: Russell White
Russell White

Writer, Contributor


As a finance geek and Content editor with 13 years of journalism experience, Russell makes sure every article has the right flow, edits for accuracy, and consumer value. In addition, Russell contributes his own ideas about budgeting, savings, and credit cards.

Review & Fact Check: Baruch Mann (Silvermann)

Russell White

Writer, Contributor


As a finance geek and Content editor with 13 years of journalism experience, Russell makes sure every article has the right flow, edits for accuracy, and consumer value. In addition, Russell contributes his own ideas about budgeting, savings, and credit cards.
Author: Russell White
Russell White

Writer, Contributor


As a finance geek and Content editor with 13 years of journalism experience, Russell makes sure every article has the right flow, edits for accuracy, and consumer value. In addition, Russell contributes his own ideas about budgeting, savings, and credit cards.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO


Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

You can trust the integrity of our unbiased, independent editorial staff. We may, however, receive compensation from the issuers of some products mentioned in this article. See how we make money.

Table Of Content

If you’ve ever made a claim to an insurance company before you probably already know that insurance companies don’t pay out what your items are actually worth. They want to save money, so when you have to make a claim they might look for different ways to undervalue your damage or loss.

Make sure that if you do turn in a claim and you get an offer that you don’t think is going to be sufficient you do what you can to negotiate a change. You may need to negotiate a car accident settlement or damage to your vehicle from something else.

No matter what happens, you need to make sure that you’re working with your insurance adjustor and that you’re getting the money that you’re entitled to for whatever happens to your vehicle.

Should I Expect For Higher Insurance Premiums Now?

Most drivers are aware that crashes can have an impact on insurance costs. In this chart using The Zebra data, you can see that an at fault crash increases the average cost of minimum coverage from $565 to $884. The price increase is even more significant if you have full coverage. You can expect to pay as much as 50% more on average.

How Much an at-fault Crash Raises Average Car Insurance Costs

How Do Negotiations Begin?

So, what do you need to do first? If you’re looking to start negotiating with your claims adjustor the first thing you need to do is let them know exactly how much money you need in order to fully reimburse yourself for the money you’ve had to pay or the receipts that you have. You’ll also want to give all of the information you can to the adjustor to make sure you can get everything taken care of.

When you send in that letter you’re going to start the negotiation process right away. The first part of this is just you showing all of the information you have and requesting the payment. Then they make an offer to you based on the information.

While they make a decision you may get a Reservation of Rights letter, which lets you know that they are investigating everything and that they are going to evaluate everything. You’re also going to have a statement telling you that you won’t get a payment if you’re not covered by the policy at all.

This statement letter is only letting you know what’s going on but it’s not telling you that you have been denied or anything like that. You could still be approved. It just means that things are being looked at.

When it comes time to actually start negotiating it’s going to be similar to haggling over anything else.

Your insurance company will make an offer. You will tell them how much you want and the two of you may go back and forth several times. Eventually, you’ll reach an agreement with the insurance company somewhere in the middle.

How Does The Negotiation Process Work?

When you first talk with your adjustor you’re going to talk about what the strengths and weaknesses are related to your claim.

It’s also going to mean laying out an offer for your claim to just make I all go away. You can then counter them with something else. Then they can come back with another offer. The process will go back and forth through several different phone calls with your adjustor.

You should get a letter from the adjustor to find out what their offer is. You should know that they’re going to reject the initial offer and you’ll need to counter back to them. Their offer will likely be much lower than what you wanted to get.

In fact, the offer they give you will generally be far lower than you would have thought. You might be surprised just how much lower that offer is. But the truth is that some people will accept that offer. You don’t want to accept that first offer.

The reason that they do this is that the adjustor knows that you need money so you can pay for the expenses that you have coming in. For some, just the promise of a little money will be enough to get them to accept. Make sure you’re looking at your offer compared to theirs as well.

Your next step should be actually rejecting the offer and going back to a new offer. You don’t want to accept that low offer. Also, you want to make a counter and work your way from there. You can even explain what you have for evidence and why you think you deserve a better offer.

Remember that you’re going to have to come down slightly with each back and forth. You can’t pick a number and hold fast. When the two of you agree on a number you’ll sign a settlement agreement and finalize the entire process.

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How Long Does a Car Accident Settlement Take?

You may spend several days working out an agreement. Or you may actually spend several months working your way around with a claims adjustor. No matter how long it takes you want to make sure you keep up contact. There are some ways to speed up insurance claims process, but sometimes it may take a couple of months.

If you try to stay in contact and the claims adjustor isn’t staying in contact with you it’s a good time to start looking into lawsuits. You don’t want your negotiations to fail or take too long.

How Much Should I Settle For After a Car Accident? 

Depending on the type of car accident involved, the settlement amount may differ. However, according to the data compiled by Miller & Zois, Attorneys at Law, the settlement amount averages $19,000 for personal injury car accidents.

However, the amount of settlement may vary depending on the evidence and the facts presented. As a result, when seeking compensation, ensure you have all pieces of evidence to build a strong case. This is because how you negotiate will define your settlement amount.

How to Negotiate Insurance Settlement Total Loss?

Mostly, the insurance adjuster value is often lower than your compensation target since the definitive goal is to make profits. As a result, before you get onto the table for negotiations, have a qualified attorney to represent you.

Besides, when claiming for total loss compensation, consult your state’s laws first. Typically, the total cost of repairs must exceed the fair market value of the vehicle. However, different states define total loss differently.

For example, in Virginia, the cost of the repairs must be 80% of the fair market value. Lastly, you must gather compelling evidence to warrant a total loss settlement.

Can I Negotiate a Car Accident Settlement Without a Lawyer?

When you want to claim for insurance settlement without a lawyer, you must know a few things beforehand. Start by drafting a demand letter to the insurance company containing the claims and damages. Ensure you explicitly state the type of damage you have incurred.

Attach supporting documents containing evidence and all facts to endorse your claims. You must also understand how to calculate your claims and counter the offer to receive fair compensation. However, depending on the complexity of the claims, you may want to engage an attorney if the whole process is complex.

What Happens if I Reject a Settlement Offer? 

Typically, when you reject an insurance settlement offer, you deem it null and void. You cannot retrieve it in the future in case things do not work out. It also means you are ready to counter the offer. Meaning, you have gathered all facts to support your incoming counteroffer. Typically, it is not a good idea to accept the first offer given by your insurance, as the insurance adjuster often undervalues the quote.

However, before rejecting, you must have solid evidence to back your claims. It is also a good idea to have your new offer negotiated by an experienced attorney with all facts at hand.

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Tips For Negotiating With An Insurance Company

So, what are you going to want to do in order to make the most out of your settlement and get the most you can?

Prepare For Settlement Negotiations

The first thing you need to do is make sure that you are prepared. Keep track of all of the details and information.

Make sure that you know the different terms,  how much you’ve suffered and what it’s going to cost to put everything back together again. The more prepared you are to get started the better off you’re going to be.

You’ll want to come into things prepared and then make sure that you’re ready to answer a lot of questions as well. They’re going to ask you all about the accident, what costs you have, what bills or debts you have and what else has been affected because of the accident. Make sure you’re ready for this.

Know What You Want

Before you pick up the phone or submit the claim you want to know how much you think you’re entitled to. Know how much you’ve lost as far as money or how much you’ve spent when it comes to getting your vehicle back in running condition. Remember this is a number that you’re going to want to start with when you approach the adjustor.

You should keep in mind also that you’re going to be trying to push your point and show just what it is that you need to improve your situation. Make sure that you are keeping in mind your minimum as well as keeping in mind the amount that you want to replace everything you’ve lost.

Don’t Accept the First Offer

That first offer is not their last offer and it definitely shouldn’t be something you accept.

You want to counter their first offer and make sure that you’re not allowing them to get away with that low amount. After all, they also know that it’s far too low.

You want to consider all of the factors that are associated with your situation before you accept any offer. You want to make sure that you’re considering your medical bills and any other bills that will affect your finances or life moving forward. Remember that accepting an offer means that you will not get anything else from the insurance company.

You want to know what the factors are that your insurance company is basing their offer on. So, even though the offer is far too low and you don’t want to accept it, make sure that you find out why they’re justifying that offer. You also want to make sure you can counter those factors.

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Keep Pushing Forward Slowly

You may be spending a long time at this type of negotiation, but you want to make sure that you keep at it. Don’t let them convince you to take a lower offer just because you have expenses that you don’t know what to do about or you’re struggling to pay. Instead, keep pushing forward and keep working at the negotiations.

You want to make sure you stay professional, polite and calm during the entire process.

Don’t let them get you into an argument or overwhelm you. These can be negotiation tactics that they’re using in order to try and get you to accept a lower offer or to have a case against you if needed. You also want to make sure you show that you’re patient but you’re still staying on top of things.

Consider Hire an Attorney

If you can’t get someone to answer your questions or you can’t get your adjustor to negotiate with you then you may have to reach out to an attorney to find out what’s going on or to get them to deal with you.

Remember that it’s going to cost you a lot of money to hire a lawyer, however. And you may or may not be able to get that money back in the course of filing a lawsuit.

Know the Facts

Not only should you know the facts but you want to make sure that you’re telling your insurance company only those facts. Don’t embellish anything or testify to anything you don’t know for sure.

If you speculate or if you exaggerate it could actually affect what you get from the insurance company. Assume that they are going to find out absolutely everything and be sure that you’re giving them only the information that they need.

You want to also be sure that you keep in mind who’s working for who. Your claims adjustor may seem nice and friendly but they do not work for you. That means, no matter how much you might like them their goal is to save the company money, not to get you a better deal.

Get it in Writing

Do not let anything go with just a phone call. You want to record all of the information you’re given in writing so that you can present it to your adjustor.

Make sure you get the offer from them in writing and get everything signed off on as well.

How Insurance Companies Calculate Car Accident Settlements?

A simple way to calculate insurance settlement involves looking into 3 variables as follows:

Special Damages x (Multiplier reflecting general damages) + lost wages = settlement amount.

The special damages refer to losses assignable to monetary value caused by the defendants such as loss of wages, property damage, or medical expenses.

The multiplier reflecting general damages refers to a value ranging from 1 to 5, reflecting the extent to which the accident impacted your life negatively. For example, emotionally, loss of consortium, or even enjoyable activity.

The last variable refers to the lost wages during the entire accident period. For example, if you lost 20 working days of wages, then adjusted accruing income is equivalent to those number of days. 


When looking for a fair settlement offer, you must consider the three crucial variables adjusters use to calculate the settlement. These are special damages, a multiplier factor reflecting general damages, and the lost wages. Examples of special damages are lost income, medical costs, vehicle repairs, travel expenses.

These are the verifiable costs you incur due to accidents. The general damages include things like pain and suffering you go through due to the accident. The lost wages are the damages you incur when you are involved in an accident.  

If you have a low auto injury, there are certain things you should do. First, you should involve your adjuster during the valuation. The expert will help you figure out a fair value you can use to counter the offer.

You should know the insurance adjuster may not have the best interest of you, as the insurance company may want to give you the lowest compensation. As a result, you must rely on the information provided by your adjuster for negotiations.

Also, ensure that you have all facts with you, like the number of days you missed work, the cost of repairs, justifiable suffering or pains, etc.

If your insurance cover is denied and you still have valid reasons to challenge the ruling, you have the right to raise an appeal.

However, you must first understand why they turned down your original claim before appealing. Once you determine that, fix those reasons by gathering facts and verifiable shreds of evidence.

Depending on the significance of the matter, you may want to engage an experienced attorney to handle all the negotiations