The Insurance Negotiation Process

  • January 30, 2018

What to Expect When Negotiating With Insurance Companies After An Accident

When you file a personal injury claim with an insurance company after you’ve been injured in an accident, you need to be prepared for the negotiation process with the claims adjuster that works for the insurance company. Negotiation is a normal part of the personal injury claims process, and it will begin soon after you file a claim with the insurance company.

You have two choices after you negotiate with the insurance company claims adjuster:

  1. Accept the insurance company’s settlement offer. When you accept the offer, your claim has ended;
  2. Continue negotiation until a fair settlement offer is reached;
  3. If a settlement can’t be reached, you can reject the offer and file a personal injury lawsuit with the assistance of an experienced personal injury attorney.

This article will outline the steps necessary in the negotiation process. Keep in mind that only a licensed, experienced attorney can properly guide you through this process. In fact, when you hire a personal injury attorney, they will handle the entire negotiation process on your behalf, so you can avoid the stress of negotiating with the claims adjuster.

The Claims Process

When you are involved in an accident that results in injuries, and you file a claim with the negligent party’s insurance company (or your own insurance company if the negligent party was underinsured or uninsured), that’s where the claims process begins. The process ends when you either accept or reject the final settlement offer from the claims adjuster. At the same time that you are trying to get as much compensation as possible for your damages, the insurance company’s claims adjuster is doing just the opposite – trying to settle your claim for the least amount possible.

It is important that you become familiar with the basic negotiation steps, as you’ll be better prepared to understand the process.

While each insurance company will handle claims a bit differently, the basic process is essentially the same.

Step 1 – File A Claim

After the accident that caused your injuries, you file a claim with the insurance company representing the at-fault party or entity. You can file this claim electronically online, or by phone. Many insurance companies require the claim be filed within 24 hours of the accident, so don’t delay. Filing the claim starts the process of settlement negotiation.

Step 2 – Reservation of Right Letter

After you’ve filed your personal injury claim, you’ll receive a letter from the insurance company called a “reservation of rights” letter. This is to let you know that the insurance company intends to investigate the claim and will communicate with you, but by doing so, they are not admitting any liability for your injuries on behalf of the negligent party (their insured). It helps to discuss this letter with an experienced personal injury attorney if you have any questions at all about it.

Step 3 – Demand Letter

After you have healed sufficiently from your injuries, you and your attorney can send what is called a “demand letter” to the negligent party’s insurance company. In this letter, you will itemize your damages, such as medical bills, lost income, and any other out-of-pocket expenses. In addition to the settlement demand, this letter will also explain the basic facts of the accident..

Step 4 – Insurance Company Response

The claims adjuster will review your demand letter, and you will receive a response either by mail or by phone. Their initial offer will begin the actual negotiations. Very often, the claims adjuster will attempt to make you believe that your claim is worth less than your settlement demand. They will likely try to pressure you into accepting a lower offer. This is where having a skilled personal injury attorney on your side is especially beneficial. Experienced personal injury attorneys such as those at Marathon Law are experienced in negotiations with insurance companies, and they are aware of all the tactics an insurance adjuster will try to use to lower the amount of compensation they have to pay.

A low settlement offer from the insurance adjuster shouldn’t surprise you, and you shouldn’t automatically accept the offer simply because you want a quick payout. By fully understanding the personal injury claims process, you’ll be able to wait it out to ultimately receive the compensation that you deserve for your damages.

In some cases, the claims adjuster will make a fair settlement offer, and you can accept that, and finalize your claim. But in most cases, you will reject the offer because it is too low, and come up with a counteroffer.

Step 5 – Counteroffers

Your counteroffer (through your personal injury attorney if you’ve retained one) may be in writing, and it should state that you do not accept the initial offer and explain why you disagree with it. You will again explain how badly you were injured, describe your medical treatments, and you will come up with a settlement amount that is lower than your original demand. This will show that you are willing to compromise in order to advance the negotiation process.

Step 6 – Continued Negotiations

Back-and-forth negotiations will continue. The claims adjuster will likely wait awhile before they make another offer, simply to see if you are impatient enough to contact them first. If you do so, you may harm your chances at receiving a fair settlement.The negotiations process might go on for several more offers and counteroffers. You must be steadfast in your position and reference the evidence you have that supports your settlement demand.

Step 7 – Final Offer

A final offer will be given by the claims adjuster, and you have the option to either accept it or reject it. If the final offer is acceptable to both you and your attorney, you can accept it, and that will be the end of the claims process. If you still believe that the settlement offer isn’t fair, you can then reject the offer, and pursue a personal injury lawsuit. Of course, if you reach this point, it will be beneficial for you to already have an attorney that is familiar with your case that can guide you through the lawsuit process. By no means should you attempt to represent yourself in a personal injury lawsuit. A personal injury attorney has special training and experience in personal injury law that the average person simply does not possess, and this can mean the difference between obtaining fair compensation for your damages or receiving nothing at all.

We at Marathon Law encourage you to contact us for a free consultation to discuss the details of your case. You can reach us by phone at 303-704-1222 or via our online contact page.