Know Your Insurance Claim Settlement Rights

In an insurance claim settlement, you have the right to negotiate with the insurance company and even get an arbitrator to help you reach a decision.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • Know your rights in the insurance claims settlement process
  • Find out the ways you can get assistance from various resources
  • There are common rights consumers have when negotiating a settlement with an insurance company
  • Research your specific rights according to the state in which you live

When you are involved in a car accident, you need to maintain your composure, follow the proper steps when filing your insurance claim, and know your rights, especially if the accident was not your fault.

By following certain steps when an accident first occurs, you will have a much better chance of receiving the claim settlement money you are seeking.

While filing a claim with your own insurance company is a fairly simple process, dealing with another driver’s insurance company can be a bigger hassle.

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The Auto Insurance Claims Process

To make certain you are not waiving your rights or making a mistake that could cost you settlement money, be sure to follow the proper steps after your accident occurs.

Here are the typical steps you should follow, although this may differ depending on the circumstances and insurance companies involved:

  • As soon as the accident occurs, contact the police because a police report may be vital to your claim.
  • Once any medical concerns are taken care of make sure information is exchanged between the drivers involved.
  • If there are any witnesses to the accident, you will also want to make sure their contact information is recorded either by you or in the police report.
  • As soon as possible contact your insurance company to report the accident and file your claim. Even if you were not at fault, you still want to contact your insurance provider.

Chances are that the other driver or their insurance company may try to contact your provider questioning who was at fault or if you were involved.

There may be aspects of your claim that cannot be claimed against the other insurance company but may be payable by your insurance.

There may be aspects of your claim that cannot be claimed against the other insurance company but may be payable by your insurance.

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Filing a Claim

It will be easier if you are simply filing a claim with your insurance provider that does not involve other drivers. Your insurance company is working for you and wants to keep you as a client.

Typically, you will provide details to your insurance company via phone, internet, or in writing. They will then determine if they need additional documentation and if they want to send a claims adjuster.

At this point, you will be required to get an estimate of the damage costs and a check will be issued to cover the repair costs.

Insurance companies may require that you receive more than one estimate, but they cannot force you to use a certain auto body shop.

They may give you a list of suggested shops, but ultimately, you have the right to choose. You can fight the estimate they opt for, typically the lowest if you feel it will not adequately repair the damage to your vehicle.

It may not be as easy when you are dealing with another driver’s insurance company.

In this case, you should also contact the insurance company as soon as possible and let them know that you will be filing a claim against a client of theirs.

Do not be alarmed if you receive a letter after filing a claim with an insurance company that states the company is investigating the claim and reserves the right to not pay it if it is found to be faulty or for something that is not covered by your policy.

This is standard policy and a way that insurance companies protect themselves.

Know Your Rights When You File a Claim

There are several rights you have and should know about when you are trying to negotiate a settlement with an insurance company.

Especially if you have been in an accident caused by the negligence of another driver, you need to know what you can do to get the money for damages and injuries that may be due to you.

If the insurance company tries to fight your claim or lowballs the insurance settlement offer, you have the right to negotiate with the insurance company.

If the claims adjuster offers you a low sum of money and you feel you are entitled to more, start by asking for an explanation, in writing, of their reasons for giving you a low offer.

It is possible that there are legitimate reasons for lowering your payout, which you need to understand, but if not, getting the explanation in writing will help you to counter it.

You should respond in writing as well and counter each point that you feel the insurance company cannot support.

Then state whether you are standing by your original claim request or are willing to lower the requested amount.

How to Negotiate a Settlement with an Insurance Claims Adjuster

When your car’s damage costs exceed its value it may be considered a total loss or totaled.

Your insurance claim will be requesting the replacement cost of the vehicle, which is known as the Actual Cash Values (ACV) of the car, based on its age and condition at the time of the accident.

You can negotiate the amount that is used as the ACV. The insurance company may initially try to offer you a low ACV, but you can dispute this until both parties agree on an ACV.

If you and the insurance company cannot agree on a settlement, you have the right to allow an unbiased arbitrator to hear both sides and help you and the insurance company come to a mutually agreeable decision.

In this case, the insurance company may suggest local arbitrators you can decide to use, or you can independently hire an arbitrator through the American Arbitration Association.

If you have completed arbitration and are dissatisfied with the decision, you may hire an attorney and sue the other driver and the insurance company for the amount you feel you are owed.

Even if you do not want to sue, it may be helpful to consult with an attorney to look over claims paperwork.

If you have questions about your rights when negotiating an insurance settlement, an attorney can help to clarify those for you.

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Rights When Dealing with Injury Claims

Insurance companies commonly fight injury claims, especially when they add up to large sums of money.

If you were in an accident caused by another driver that has caused you to be injured, you have the right to compensation for those injuries.

In these cases, it is highly recommended that you hire a personal injury lawyer.

This lawyer will walk you through all compensation you may be entitled to including lost wages, the cost of a rental car to drive to and from work, or the cost of child care if injuries prevent you from caring for your children.

Once you have negotiated a settlement for a personal injury claim you will be asked to sign and a release and waiver stating that you will not try to sue for additional money later on.

Make sure your attorney reviews this and all paperwork before you sign.

Additional Information

Although the law states that you must have auto insurance in order to operate a vehicle, some drivers do not obey this.

If you have uninsured motorist protection as part of your insurance policy, you can file a claim with your insurance company even if you were not at fault.

If you do not have uninsured motorist protection, your only chance to see monetary reimbursement for damages or injuries is to sue the uninsured driver.

Your specific rights differ from state to state. You will need to contact your State Department of Insurance in order to find out exactly what rights you are entitled to in your state.

By visiting the National Association of Insurance Commissioners, you can find links to the state insurance departments for each state.

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