If you are trying to settle your own car accident claim, or you've hired a lawyer and just want to know what to expect during the car accident settlement negotiation process, this article spotlights a few pitfalls to avoid.
The most important mistake to avoid making is to know when you shouldn’t try to handle your car accident claim yourself. As a general rule, it is probably worth it to hire a lawyer if the fair settlement value of your claim is more than approximately $25,000. When is a car accident claim reasonably worth more than that? If the accident is clearly the other driver’s fault (i.e., rear-end collision, running a stop sign or red light, or the like) and your medical bills and lost earnings exceed $10,000, you should probably hire a lawyer. (Learn more about the Value of a Car Accident Claim.)
Lawyers are trained to evaluate every car accident case objectively. They must see the flaws in every case as well as the good parts of the case. If you are handling your own case, you must do the same. You must try to figure out where the weak parts of your case are -- fault for the accident, difficulty proving soft tissue injury -- and you must try to figure what effect those weak parts on going to have on the settlement value of your case.
Insurance companies simply will not make a settlement until they have all of your medical records and bills that pertain to the accident and all of the documents that support any lost earnings claim. This includes a doctor’s note that specifically states how long you should stay out of work and proper documentation as to your earnings (the best documentation is a letter from your employer’s human resources department). If the car accident aggravated a previous injury, the insurer will generally demand your prior medical records relating to that injury.
If the insurance company doesn’t have the records that it wants, it will not make an offer. You can argue and you can threaten, but they will not budge. You must accept that and work to make sure that they have all of the documents that they reasonably need.
The key word here is "reasonably." Insurance companies often demand far more documents than they reasonably need. They might even ask the injured person to sign a blank medical authorization allowing them to get all of your medical records (dating back to your birth for all intents and purposes). Don’t sign blank medical authorizations! If you and the insurer are at loggerheads about what medical records they need, then it’s time to hire a lawyer.
Asking for too much is a common mistake. If your first demand is too high, the insurer often will not respond; they won’t make any counteroffer at all. This is just common sense in negotiations. Let’s look at an example from daily life to see why this is so. Let’s say that you went to buy a car and saw a car with a price tag of $19,995. If you offered the dealer $18,000, he/she would probably think that you were serious and would make a counteroffer. But if you offered $8,000, the dealer would probably throw you out of the dealership with a sarcastic "thank you" for wasting his/her time.
That’s how it is in car accident claim negotiations. If your initial demand is too high, you are wasting the insurer’s time, and they won’t respond until your demand is more reasonable.
Another common mistake that people make in car accident claim negotiations is not understanding that claims do not have a specific value; instead, they have a range of values. What is the difference? You should not say that your case is worth $15,000, and so you want to settle for $15,000. In reality, it is more appropriate to say that the case is worth $13,000 to $17,000, and that your goal is to settle the case for somewhere in that range, hopefully in the higher end of that range.
It is better to refer to a range instead of an exact dollar figure when valuing a car accident claim because every claim is unique.
Unless you are a car salesman, the insurance adjuster will undoubtedly have participated in hundreds more negotiations than you have. He/she will try to take advantage of your inexperience. One way to slow them down is to never commit to anything on the phone.
If, for example, your first demand was $20,000, and the adjuster called you up and offered $8,000, say thank you for the offer and you will get back to them. And then get off the phone. Don’t argue the merits of the case. They don’t want to hear it. Just get off the phone, think about what your next move should be, and call them back in a couple of days.
When you call them back, give the adjuster your counteroffer. If the adjuster responds with a fresh counteroffer, again say thank you and that you will call him/her back. If the adjuster pushes you for a response, be firm. They are better at this than you are, and you need some time. Call back that day if you want to speed things up, but take a little time just to make sure that you are doing what you want to do, not what the adjuster wants you to do.
If you are trying to negotiate your own settlement and feel that negotiations are bogging down, you should contact a qualified personal injury lawyer to learn about your legal rights and your options.