How to Negotiate With Insurance Companies: 6 Step Guide For Success

This article was updated on 2/23/2022

Table of Contents:

• Filing a Claim
• Getting Your Records Ready
• Estimating Your Claim’s Value
• Sending the Insurance Company a Demand Letter
• What to do with a Lowball Offer or Denial
• Hiring an Attorney
• FAQs

If you’ve been involved in an auto accident, the general rule of thumb is to contact a personal injury attorney to begin formal negotiations with an insurance company to discuss a settlement.

In a perfect world, the other driver’s insurance company will agree to the terms of your personal injury claim, accept that their client played a pivotal role in your injuries, and give you the cash settlement you deserve to mitigate any further financial responsibility.

Unfortunately, this does not usually happen. Insurance companies, like any business, only value their interests – which is to save money. They will attempt to achieve this outcome to your detriment.

Many injured victims will attempt to negotiate with an insurance company on their own. Rarely will they get any satisfactory result. Typically, if an insurance company sees that you’re trying to discuss your claim with them while unrepresented,  they’re going to certainly try to undermine you. This includes getting you to say damaging things about your case that can be used in court against you.

Here is how this is normally done. The adjuster from the other insurance company will ask loaded questions such as:

• Are you completely sure that you looked both ways…?
• Did you wait a reasonable time before…?
• Were you impaired in any way? Is your vision…?

Remember that typically, phone conversations with an insurance company are recorded. Any answer that isn’t definite, such as “I don’t know” or even “Uh…” can be used against you to dispute your claim.

For this reason, hiring a personal injury attorney is crucial to evening out the playing field against another insurance company. However, understanding how to negotiate with insurance plays an important role in getting all the compensation you deserve in your personal injury case. Here’s what you need to know.

1. File a Claim

The first step is always to file a claim. Until you do, there is nothing to start negotiating, and the insurance company is likely not aware of your injuries. Even if they are aware, they are not in the business of reaching out and offering people money.

Filing a claim is needed to get things moving. Remember, you have a statute of limitations on that claim. File as soon after the injury as you can.

2. Get Your Records Ready

One of the best ways to build your case is to have good records. That can include a police report, medical bills, witness statements, vehicle repair bills, property damage reports, and photos and videos of the accident scene.

If you miss time from work, you have a permanent disability, or you will need long-term or ongoing care, proof of those things is also valuable. You want as much information as possible to make your case.

3. Estimate Your Claim’s Value

When you are thinking about how to negotiate with an insurance adjuster, you want to be sure you consider how much your claim is really worth. Add up everything the injury has cost you, and will cost you in the future, that you can back up with evidence.

Make sure you do not sell yourself short, or ask for less than you deserve. This is your opportunity to see and understand the true value of your claim, so you can convey your need for compensation.

4. Send the Insurance Company a Demand Letter

A Demand Letter is your official request for compensation for your injuries. Send it to the insurance company, and make sure you are clear and detailed. You need to provide information about the accident, your injuries, medical treatments, and any future considerations that stem from the injuries you sustained.

Come up with a minimum settlement amount you would accept, but do not share that number with the insurance company. That is only a number for you, and should be the absolute lowest amount you feel is fair in your situation. The odds are extremely low that the insurance company will offer you anything close to that amount.

5. Expect a Lowball Offer or Outright Denial

You will get a response to your Demand Letter, and you may be shocked at how low the offer actually is. Typically, an insurance company will present you with a lowball offer, in the hope that you will take it and go away. If the insurance company really feels you do not have any kind of case at all, they may outright deny your claim and just say no to your letter.

Insurance companies do not want to pay out claims and settlements, so they turn to low offers, denials, and frustrating negotiation tactics in an effort to reduce what they have to pay when one of their clients is at fault in a vehicle accident or other personal injury case. The adjuster may ask for a lot of picky details, argue against dollar amounts, or look for holes in your story to discredit you and your claim. If you receive a lowball offer you can counteroffer, but it’s unlikely you will have much success.

6. Hire an Attorney to Settle Your Case

The best option when you’re looking at how to negotiate with insurance is to make sure the insurance company takes you seriously. How do you do that? By hiring an attorney. A personal injury attorney knows the ways that insurance adjusters try to reduce settlements and lowball claims. An attorney also understands what cases of similar circumstances are settling for. 

When you have strong legal representation on your side, it is easier to make your case and receive fair and just compensation for your injuries. If you have tried to negotiate with an insurance company on a personal injury claim, and you’re receiving lowball offers, denials, and other frustration, working with an attorney can change the game. You shouldn’t have to fight with an insurance company to receive what’s fair. Let us help you get the compensation you deserve.

Frequently Asked Questions (FAQs)

If you have any additional questions about insurance company negotiations, you can refer to the FAQs below.

Do insurance companies consider pain and suffering?

• Pain and suffering is considered a noneconomic damage, meaning you cannot necessarily put a tangible dollar amount on this damage. However, you should include this element of damages in your claim because it is a damage the at-fault driver’s insurance company should reimburse you for. 

How do insurance companies determine personal injury settlements?

• Insurance companies use a basic formula (your medical bills + pain and suffering + lost wages = settlement amount) to determine the value of settlements.

How do you negotiate with insurance after an accident?

• The first thing you should do is file a claim as soon as possible. Next, hire an attorney to make sure you are developing your damages, not saying things to jeopardize your case, and get the best outcome possible.