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Settlement Negotiations
You can succeed in settlement negotiations in your car accident case . . . even if you don't have any experience.
Of course, you don't want to end up like the fellow on the left in this cartoon. Here's how you get the best results in you car accident settlement negotiations . . .
When should you begin negotiations on your injury claim?
After you have recovered from your injuries, obtained all the documentation you need and determined your settlement goal, there is no reason to delay. Send your "demand package" to the insurance company and begin settlement negotiations.
Do you simply ask the insurance company to pay the amount you have decided is reasonable?
Unfortunately, no.
Settlement negotiations in a car accident claim are much like the back-and-forth negotiation system that most car dealerships still use. (In fact, don't be surprised if, during the negotiations, the adjuster tells you she has to speak to her manager, just like a car salesman.) And it has been this way as long as car accident claims have been negotiated.
As much as we would like to, neither you nor I has the power to change the system overnight. You have to recognize the nature of the settlement negotiations system and "demand" more than you actually hope to recover. The normal response from the insurance adjuster is an offer of less than they are really willing to pay. The back-and-forth process continues until the claim is resolved or until it is decided that it can't be settled, that you simply have views of the case that are too different.
Ask for anywhere from 25% to 100% more than you hope to recover. If you think $10,000 is fair, "demand" $12,500 to $20,000 and negotiate from there.
How long should you continue settlement negotiations?
Ideally, as long as necessary to reach a fair agreement. The settlement negotiations could be completed in one discussion (or one exchange of letters), but, more likely, you will have to go back-and-forth with the adjuster several times before you get the adjuster's very best settlement offer. Some lawyers I know have a hard and fast rule: they won't settle an injury case without discussing the claim and exchanging figures with the adjuster at least 3 times.
Should you accept the insurance company's final offer?
First, you have to know whether the offer is really the best offer that will be made. How do you do that? Ask.
Ask the adjuster something like this: "Are you telling me that this is the highest offer you are authorized to make, and that the offer will never be increased?" Or, ask: "Is this a take-it-or-leave-it offer?" Listen carefully to the answer because most adjusters won't flat out lie to you. If the response is equivocal . . . such as, "This is all the authority I have at this time" . . . that probably means you can get a higher offer at another time.
Keep in mind though that, while most won't, some adjusters will lie to you. Many times, I have been told that an offer is final only to have the claim later be "re-evaluated" and a higher offer made later. Once you get to the point that you think you have the insurance company's best offer, whether you decide to accept it is up to you. (Don't I have a firm command of the obvious?)
If the offer is within the range you think is fair . . . and . . . the adjuster convinces you that she is being honest when she tells you that it is, indeed, the best offer that will be made, accept it. (More of the obvioius, huh?)
If the offer is less than your goal amount, you have to decide whether to invest the time and expense of going to court to try to get more.
If the offer is far less than you think is reasonable, you should probably reject it and go to court. But if the offer is less than you think is fair but is close to your goal figure, you should think carefully about it.
Ultimately, your decision on whether to accept or reject a settlement offer will probably depend on . . .
- how much more you think you can recover in court (recognizing that you really don't know what will happen in court -- no one does).
- how long it will take.
- how much it will cost, and
- how comfortable you are with the uncertainty of going to court. In court, you could do better than the settlement offer . . . or worse.
In case you are wondering, if you decide to go to court, the judge or jury deciding the case is not told the settlement offer you rejected. You can't, for example, say that you were offered $6,000 but think your case is worth $12,000. You can't mention settlement negotiations at all.
On this issue, let me make one final observation about the insurance adjuster with whom you will be having settlement negotiations if you handle your own claim. The adjuster doesn't know for sure what will happen if you take your case to court . . . any more than you do. However, you should give some consideration to the arguments and to the evaluation of the insurance company in deciding whether to settle. While they don't know for sure what will happen in court, the insurance company handles thousands of claims each month and therefore has far more insight into the process than you do. Their evaluation of your claim may be wrong. It undoubtedly will be on the low side. But at least listen -- carefully -- to the arguments they make to you for why your claim is worth less than you think.
That helps you to do a better evaluation of your claim and it even prepares you for court if you decide to go there. You will hear the same arguments in court that you heard when you negotiated the claim with the adjuster. At the very least, then, carefully listening to these arguments will help you to prepare to respond to them in court.