UPDATED: Oct 23, 2019
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Negotiating a Settlement: Part 4
Working out a settlement for an insurance claim is similar to working out any other negotiation: you first need to lay the proper groundwork, and then “play your cards” right in order to reach your desired outcome. If you don’t prepare your case well, you’ll create hurdles for yourself later, and if you don’t take the right steps at the right times, you could preemptively block yourself from certain opportunities to reach a good settlement.
For those interested in handling their claims on their own, just like closing a real estate deal, doing your taxes, or investing your finances, there are certain aspects you can handle yourself. But, just as in those other fields, it’s best to leave the “heavy lifting” of larger deals, bigger settlements, serious injuries, and complex negotiations to a professional, namely an attorney. Most personal injury attorneys will take on relatively minor claims, too, so don’t just assume that your claim is too “small” to warrant legal help or at least a free consultation.
If your injuries heal completely within a couple weeks and you don’t miss work or lose much sleep due to the pain, your case could be considered a “small claim,” and you should be able to negotiate a settlement with the insurance adjuster on your own. Some tips:
- Keep all communication, negotiations, and agreements in writing, by email, fax, or mail. Phone conversations are not only stressful, they give the insurance adjuster the upper hand, because you might give away too much information or get confused during a long phone argument. To keep it simple, just keep everything in writing.
- Make sure you recover fully! Don’t skip treatments. Get treated for any injuries resulting from the accident, and just make sure your doctor takes adequate notes to explain why the treatment is needed due to the accident.
- After you’ve fully recovered, request copies of all medical bills and receipts from your doctors. It may take a few weeks after you’ve recovered for the final invoices to be generated, so be patient.
- Draft a demand letter to the insurance adjuster. Explain your demands and back them up with photos, evidence, receipts, and details about the severity of the accident, the medical treatment, and your pain and suffering.
- Start high, negotiate down. Adjusters are expert negotiators, so if you want $1,000, start at $2,000 and give up some ground to reach your desired number. Generally speaking, start at roughly double your desired number and negotiate down from there.
- Don’t tell them your bottom line, ever. Instead, just ask the adjuster to make you a counter offer.
- Don’t give away all your information, evidence, reasoning, or justifications all at once. Try to keep an “ace in the hole” to seal the deal on a final negotiation.
- Don’t agree to anything until you have it in writing.
- Never accept a settlement in the same conversation as the offer is made. Be sure to give yourself a day to consider it, talk with friends and family about it, and consult with experts and attorneys before accepting a settlement for anything.
- Keep in mind that their first offer will often be somewhat less than they can actually pay, and that with some smart presentation of facts, negotiation tactics, or by hiring an attorney, you will likely be able to increase their offer.
Through all of this, remain aware of your time limits and constraints. If you’re negotiating towards a settlement only a few months after the date of the accident, there’s no need to rush the negotiation process. If you’re approaching a year from the date of the accident, consult an attorney to make sure you’re not missing an important one-year deadline with regards to your case. But if you’re well within such constraints, remember to take a deep breath, find some activity to let out your stress or nervous energy, and relax. If your adjuster is pressuring you to finalize a deal, it’s best to take a day or two and sleep on it.
Most importantly, do what you can to save money in the meantime so you don’t force yourself into a financial corner where you’re compelled to accept a settlement simply because you need the money. By keeping these simple tips in mind and following the steps in this guide, you should be able to negotiate a great settlement on your own.