Tips for Negotiating a Settlement After a Car Accident

Expert tips for handling settlement negotiations in your car accident case.

Updated by Stacy Barrett, Attorney
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  • You can succeed in settlement negotiations in your car accident case, even if you don't have any experience. Here are some questions to consider in order to get the best result in your settlement negotiations.

    When Should You Begin Negotiations on Your Injury Claim?

    After you've fully physically recovered from your injuries (reached maximum medical improvement) and gathered all the documents you need, there is no reason to delay filing your claim.

    Send a demand letter to the insurance company and begin settlement negotiations. But remember, it is important to have all necessary evidence to back up your claim—police reports, witness statements, photographs, and medical treatment records and bills. A lack of evidence can doom your case, or at least leave you with a settlement that doesn't cover your losses. (Use this checklist of records to gather after a car accident.)

    Do You Simply Ask the Insurance Company to Pay the Amount You Have Decided Is Reasonable?

    No. You have to understand the nature of the insurance settlement negotiations and ask for more than you are willing to accept in your initial demand letter. The adjuster's first offer is likely to be much less than what the insurance company is willing to payout. You can make a counteroffer, and the back-and-forth process will go on until you reach a settlement agreement or you decide to file a civil car accident lawsuit.

    Asking for too much is a common mistake. If your first demand is too high, the adjuster might dismiss you as unreasonable. Negotiating a car accident claim is similar to negotiating for a used car. If a car is priced at $19,995 and you offer $17,000, the dealer will probably think you are serious and haggle with you. But if you offer $8,000, the dealer probably won't waste time negotiating with you.

    You don't want to go too low either. A good rule of thumb is to ask for 25% to 100% more than you hope to recover. For example, if you think $10,000 is fair, ask for $12,500 to $20,000 and negotiate from there. The trick is to figure out an amount that leaves you plenty of room to negotiate, but still seems reasonable based on the evidence.

    How Long Should You Continue Settlement Negotiations?

    Ideally, negotiations will go on for as long as necessary, until a fair agreement is reached. You could reach an agreement in one or two phone calls or emails, but you might have to go back and forth with the adjuster many times before you get the adjuster's very best settlement offer. Some lawyers won't settle an injury case without discussing the claim and exchanging figures with the adjuster at least three times.

    Don't let the adjuster rush you. If you need more time to think about an offer or counteroffer, say that and get off the phone or log off your computer. Do some research and contact the adjuster when you are ready to talk and make a decision. Your case might be one of many on the adjuster's desk, but this is your one and only shot for a fair settlement.

    Should You Accept the Insurance Company's "Final" Offer?

    First, you have to know whether a so-called "final" offer really is the best offer the adjuster is going to make. Ask the adjuster something like, "Are you telling me that this is the highest offer you are authorized to make and that the offer will never get better?" Or, "Is this a take-it-or-leave-it offer?"

    Listen carefully to the adjuster's answer. Most adjusters won't flat-out lie to you. If the response is vague—such as, "This is all the authority I have at this time"—that means you may be able to get a higher offer at another time.

    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. If you think the offer is fair, and you are convinced that the adjuster won't make a better offer, accept it.

    If the offer is less than your goal amount, you have to decide whether to invest the time and expense to try to get more. If the offer is far less than you think is reasonable, you should probably reject it and file a lawsuit against the at-fault party. But if the offer is close to what you think is fair, you should think carefully about making a reasonable counteroffer.

    Your decision to accept or reject a settlement offer will depend on many factors, including:

    • how much more you think you can get if you file a lawsuit and win
    • how long a lawsuit will take
    • how much a lawsuit will cost, and
    • how comfortable you are with the uncertainty of going to court.

    If you decide to go to court, you can't tell the judge or jury about the settlement offer you rejected. For example, you can't say that you were offered $6,000, but think your case is worth $12,000. You can't mention settlement negotiations at all.

    Think about the adjuster's evaluation of your claim as you decide whether to settle your case. You might not agree with the adjuster's offer, but the arguments the adjuster makes are likely to be the same arguments the at-fault party will make in court. Listening carefully to the other side can help you prepare for court if you decide to file a lawsuit.

    Should I Talk to a Lawyer?

    The biggest mistake you can make when you are negotiating a car accident claim is to insist on handling your own claim when you would benefit from the help of a lawyer. Despite your best efforts to settle your claim yourself, you might want or need help when your claim is particularly big or complicated or the insurance company refuses to make a fair settlement offer.

    For example, if the insurance company continues to deny liability or says that the accident isn't covered by the insurance policy, you might benefit from the help of a lawyer who understands the ins and outs of negligence claims. Or you might want to talk to a lawyer if the stakes of your claim are high. For example, if you're dealing with a permanent injury that impacts your ability to work full-time, talk to a lawyer.

    Most car accident lawyers work on a contingency fee basis. Under a contingency fee agreement, lawyers take a percentage (typically 33% to 40%) of the client's final settlement or court award as their fee.

    Learn more about hiring a car accident lawyer. You can also connect with a lawyer directly from this page for free.

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