Learning to Negotiate a Settlement With Your Car Insurance Company

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Dec 31, 2016

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Here's what you need to know...
  • You need to understand the normal steps in the process of a car insurance claim
  • If you’re unhappy with the settlement offer, speak to the adjuster
  • If you still can’t reach a satisfactory settlement, speak to the adjuster’s supervisor
  • A lawyer is an option if you haven’t made sufficient progress through the other avenues

Many people are frightened about the prospect of negotiating over something. There is no haggling in stores in the U.S. and people accept that the number they see on the price tag is the amount they are going to pay.

When someone causes an accident, however, and your vehicle (or you) is damaged because of it, then you need to step out of your comfort zone and prepare to negotiate for your car insurance claim settlement.

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The first step in negotiating a car insurance claim settlement is to file a claim in the first place.

Although the person who caused the accident is obligated to report that accident to their insurance company, this doesn’t preclude you from calling them as well. You should contact them and let them know that you are the injured party and you want to get paid.

Insurance companies use insurance adjusters to handle the claim.

In some cases, this will be a man or woman that works directly for the insurance company.

Smaller companies, however, often use independent adjusters to take care of the claims and, in many cases, they can be less flexible than someone who works for an insurance company because their livelihood depends on the fact that they can keep the settlement low.

The First Step in Car Insurance Claim Settlement Negotiations


After a claim has been filed, you have one of two options.

  1. Wait for an insurance adjuster to contact you with a settlement offer. This is the most common option. This process is generally fast, unless there are a lot of complications, and you will usually hear from an adjuster as soon as he or she speaks to a mechanic about your vehicle.
  2. Speak to the mechanic, gather sufficient evidence to support the amount of money you want, and then call or write the insurance company and tell them how much you want.

The adjuster assigned to your case will contact you and let you know if this is an acceptable amount.

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The Second Step in Car Insurance Claim Settlement Negotiations

The second part of negotiations is patience. You may go back and forth with an adjuster several times before you reach a number that you are satisfied with.

You do need to be aware that an insurance adjuster only has so much leeway to work with.

Once they reach the max that they are authorized to offer, no amount of demanding or letter writing is going to change the fact that they have reached their limit.

The Third Step in Car Insurance Claim Settlement Negotiations

At this time, if your adjuster has nowhere else to go, it is time to speak to his supervisor. This may or may not yield results; it depends on what type of evidence you are presenting to show that you are due more than what the insurance company is offering.

The Fourth Step in Car Insurance Claim Settlement Negotiations


This step only occurs if you cannot reach an acceptable settlement with an insurance company. This step requires you to speak to a lawyer.

This doesn’t necessarily mean that you are going to end up hiring the lawyer. However, this is the best way for you to determine whether or not you have enough of a case to meet with a mediator or to go to court.

In many cases, speaking to a lawyer and paying them to write a letter to the insurance company stating your intent to take this case further is enough to get the insurance company to pay more.

Despite many of the stereotypes associated with insurance companies, they aren’t inclined to go to court to fight a claim.

Once You Have Settled a Car Insurance Claim

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At any point during the negotiation process, you can accept a settlement offer and that is the end of the process. The important thing to note here is that this really is the end.

With the exception of extreme unforeseen circumstances, once you accept a settlement, you can no longer try to pursue a case against the insurance company.

In some cases, depending on where you live, you can sign the settlement offer, but if you haven’t deposited or cashed the check, then you can still pursue another course of action. However, once that check is out of your hands, you are done!

It is for this reason that you may want to speak to a lawyer before you are done settling your case; especially if you have had a tough negotiation process.

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