You might be preparing to file a claim after an accident. Now, you need to know how to negotiate a cash settlement with insurance company for fair compensation.
To negotiate a cash settlement with an insurance company, file an insurance claim, and accept a cash settlement. Consolidate your records, estimate your minimum settlement amount, and write to the insurance, making it a case study. Reject their initial offer and make a counteroffer focusing on your strongest point. Hire an attorney if necessary.
When negotiating with the insurance company, prove that you deserve fair compensation for your suffering and losses. Note that the claims adjuster will try to blame you for the accident.
In some cases where the insurance company is stubborn, an attorney can negotiate with the claims adjuster to get you fair compensation.
This article reveals the adjuster’s tactics as well as what you should be aware of, especially when deciding to negotiate with the adjuster yourself.
Who is your insurance claims adjuster?
An insurance claims adjuster is an employee working with your insurance company to determine liability. The adjuster’s job is to investigate damages caused by accidents to people and property. They use what they find during the investigation to determine the extent of the insurance company’s liability.
In a typical personal injury case, a claims adjuster investigates the claim to determine if your injuries are eligible for insurance coverage and to what extent. This could be by your policy or the policy of the at-fault party.
When the claims adjuster finds coverage for your accident, they begin the investigation phase to evaluate the coverage extent. The adjuster may do the following during the investigation phase:
- Interview other witnesses
- Inspect injuries or property damage
- Review accident reports and other relevant materials
- Review medical records and speak with a doctor
After the investigation, the insurance claims adjuster drafts a damage report that details the total financial losses of the accident. This report is used to begin the claim settlement process.
How to negotiate a cash settlement with insurance company
You now understand who your claims adjuster is, below is how to negotiate a cash settlement with an insurance company:
File an insurance claim
After an accident such as an auto accident, determine where to file an insurance claim. If you are involved in an auto accident without insurance or a valid driver’s license, you can be penalized, even if the other driver is at fault. This policy can prohibit you from receiving certain amounts of compensation.
If you live in any of the 12 no-fault states such as Florida, Hawaii, New York, Kansas, Michigan, etc., regardless of who is responsible for the accident, you file a claim with your insurance company.
However, if you reside in an at-fault state such as Maine, California, Louisiana, Washington, Georgia, Texas, etc., the injured party files a claim against the insurance company of the at-fault party. If you are injured in a fall or slip accident, you would typically file a claim with the insurance company of the business property.
Although the adjuster’s help and filing a claim are important when negotiating a cash settlement, the insurance company is not on your side.
Organize your records
After filing an insurance claim, consolidate your records. You need an organized record of every file and document related to your accident to defend yourself when negotiating with an insurance claims adjuster.
Some of the relevant evidence you need may include the following:
- Police or accident reports
- Medical bills
- Property damage quotes
- Photos/videos of injuries or property damage
- Repair estimates (motor vehicle, etc.)
- Witness statements
The thumb rule is to keep any materials you can use for validation purposes in your injury settlement in your files. Your evidence determines your chance of fair compensation for your insurance cash settlement.
Estimate your minimum settlement amount
After filing your insurance claim and consolidating your records, calculate the true worth of your claim as best as you can. Estimate your minimum settlement amount by considering the financial implications and reviewing your records of:
- Medical bills
- Property damage cost
- Lost wages
- Accident and injury-related expenses
- Pain, suffering, and trauma
You do not share your estimated figures with the insurance company.
After making an estimate, send a demand letter to the insurance company requesting fair compensation. Your demand letter should indicate all of the damages and losses you incur from the accident. You are using this demand letter to make a case for your compensation, so tell a detailed story of the accident, showing injuries, medical treatment, losses, pain and suffering, or emotional distress caused by your accident.
Have your minimum settlement amount in mind while awaiting a settlement offer from the insurance claims adjuster. This must be the figure you cannot go any lower than.
Your clarity of the entire accident increases your chance against the adjuster during negotiations.
Also, leverage time as one of your techniques to scare the insurance adjuster. Include a deadline in your demand letter showing the date the adjuster has to accept your offer. Date specification notifies the insurance company that you mean business.
Reject the initial settlement offer
Most of the time, claims adjusters return with a lowball settlement offer after your demand letter. It is a normal tactic to reduce liability, so do not be surprised or angered. Adjusters are excellent negotiators; they will test your ability to negotiate and determine if you know the value of your claim.
Your insurance claim may be perfectly reasonable but the adjuster will try to make it look bad. Remember that the claims adjuster works for the insurance company, thus, it is in their best interest to limit the extent of their company’s liability.
It is advisable to meet their rejection letter with a counteroffer. Your follow-up letter can press the adjuster’s detailed valuation and explanation and focus on your reasons for rejecting their offer.
Once they receive your rejecting letter, your cash settlement negotiation with the insurance company begins. You have to defend your demand for fair compensation with evidence at your disposal.
Focus on your strongest points
You can beat the insurance company when negotiating a cash settlement by emphasizing the strongest points in your favor. Be reasonable and fair when emphasizing the severity of your injuries and losses.
You do not want to drag the negotiations till eternity. Thus, emphasize your strongest points and leave out uncertainties and impertinent facts during negotiations. For instance, in an auto accident, reiterate repeatedly how the other driver was at fault. Emphasize the pain and suffering from your accident and mention the costs of your medical bills for your injury treatment. Mention any long-term physical effects that may be caused by your accident.
Ensure to back up your strongest points with records, evidence, or research to stand a better chance of getting a fair cash settlement from the insurance company.
Be careful what you say to the claims adjuster
The adjuster can use what you say against you. Your insurance adjuster always looks for any opportunity to turn your statement against you to reduce your injury claim.
Be honest about your circumstances and refrain from admitting any fault. The adjuster will bring up a close-ended question that asks what you could have done to prevent the injury. Do not admit or suggest what you could have done, this is a tactic to blame you.
Always emphasize the severity of your accident, injuries, and losses you incur to prevent the adjuster from assigning blame or downplaying the severity of your accident and injuries.
Hire an attorney
The insurance adjuster does not want you to hire an attorney. Lawyers with experience are aware of the legalities, and adjusters hate to see them around.
An insurance adjuster knows the law in a way you might not. They will try to use your knowledge gap to reduce your cash settlements. This is the game an attorney may easily play on your behalf to get you the cash settlement you deserve for your losses or injuries.
A claims adjuster knows what to say to get you to tell a flawed story about your accident. Therefore, when you deal with the insurance company yourself without the knowledge, they can swindle you. An experienced personal injury attorney may fight for your rights with confidence to get you the cash settlement you deserve.
An attorney who knows the rules applies them wisely and may initiate the court if they think it can get you the compensation you deserve. Insurance companies do not like going to courts but they may challenge you to take them to court.
The success of your negotiations with the insurance adjuster determines your cash settlement. Negotiations require real patience and persistence, and a personal injury lawsuit may be necessary if a deal cannot be reached.
How much should I ask for insurance settlement?
After filing an insurance claim, the amount you should ask for should be higher than what you would be satisfied with. The thumb rule is to demand between 75-100 percent insurance cash settlement. For example, if you think the value of your claim is worth about $3,000, you can ask for $4,500 or $5,500.
How do you respond to a low settlement offer?
To respond to a low insurance cash settlement offer, keep your calm and review/analyze your offer. Do not respond to the low offer emotionally. Ask questions, present the facts, make it a case study and develop a counteroffer. Respond to the claims adjuster’s initial offer in writing.