After an accident resulting in injuries, you may face financial burdens and consider pursuing compensation. Depending on the type of accident, you’ll likely need to deal with the liable party’s insurance company to obtain financial recovery.
Insurance companies are notorious for being difficult to communicate and settle with. They can be sneaky and tricky while trying to get themselves out of paying for the damage. Dealing with insurance companies is one of the most frustrating parts of accident cases.
While both sides may not agree on many things, there is one thing they can agree on: In most cases, settlement negotiations are far better than going to trial. But negotiations aren’t exactly a walk in the park, especially if legal counsel does not represent you.
Insurance companies will try to take advantage of you, but a personal injury lawyer can help. Attorneys are familiar with the games insurance companies play, so they can help you fight for justice and your right to a fair recovery.
Continue reading to better understand how insurance companies handle settlement negotiations. If you’re interested in seeking compensation for your injuries and losses, a personal injury attorney can assist you.
What Types of Cases Involve Insurance Companies?
Typically, cases involving an accident and injuries involve negotiation settlements. These cases fall under personal injury law.
Personal injury law protects victims who have suffered harm from another party’s action or inaction.
Some of the common types of personal injury cases involve the following:
- Car accidents
- Motorcycle accidents
- Truck accidents
- Boating accidents
- Scooter accidents
- Slip and falls
If the liable party is insured, the insurance company steps in. In many cases, you can seek compensation from the insurance company exclusively, not the defendant.
Settling During Negotiations Benefits Everyone
In personal injury cases, one of the goals is usually to avoid trial.
There are several benefits to settling outside of court for both parties, including:
- More Cost-Effective: Settling out of court instead of going to trial saves both sides money
- Quicker Settlements: Parties can settle more quickly out of court, and plaintiffs often receive their money faster
- Control: You’re in control during settlement negotiations, as opposed to a trial, where you must accept what the judge or jury allows you to receive
- Certainty: You’ll know how much you’re getting during negotiations
- Confidentiality: Settlement agreements are confidential, while trials are a matter of public record
While going to trial can have some positives, it also has certain negatives, including:
- A Long, Drawn-Out Process: A trial takes much longer than settlement negotiations, so you’ll have to wait longer for your payout
- More Stress: Going to trial is stressful for both parties and can get contentious
- Winning Is Never Guaranteed: One of the worst parts of a trial is not knowing whether you’ll receive any compensation at all
Only one in 20 personal injury lawsuits goes to trial, while settlements benefit everyone.
The Insurance Company May Send You an Initial Offer
Settlement negotiations with the insurance company often start with an initial offer.
The insurance company quickly investigates your claim and calculates a settlement amount to include in their offer. You may even receive an initial offer before determining the extent and severity of your injuries and the damage.
A rapid initial offer tries to get you to settle as soon as possible. Why? Because once you’ve agreed to a settlement, there’s no turning back. You cannot later go after the insurance company for more money. Therefore, the insurance company hopes to get you to settle fast before going any further.
How Does the Insurance Company Calculate Its Initial Offer?
To calculate the amount in their initial settlement offer, the insurance company needs to investigate your accident to answer specific questions. Once they investigate, they can calculate a fair settlement.
Although the insurance company investigates your claim, you can almost always expect the offer to be low and unsatisfactory.
The insurance company typically factors in the following when calculating its initial offer.
The Cause of the Accident
Insurance companies must investigate what caused your accident and who could be held liable.
Insurers work hard to limit their liability. They may attempt to shift the blame to a third party. Making someone else liable for the accident removes at least some of the responsibility from their client, making it possible to avoid paying out or paying very little for your accident.
In some cases, the insurance company may try to establish that you caused your accident and injuries. For example, they may claim the car accident was your fault, not their insured’s, because you were distracted while driving.
Because the insurance company will likely give you a hard time, you must have a personal injury lawyer on your side to fight back.
Your Injuries and Losses
The insurance company will investigate your injuries, property damage, and other losses. Additionally, they’ll need to determine how your injuries and losses could affect you in the long run and whether your injuries may have long-term effects, as this can affect compensation.
One of the most significant issues with initial settlements is that, in many cases, the extent of your injuries and losses is not immediately evident right after an accident. If the insurance company investigates too quickly and sends you an initial offer too soon after your accident, it may not account for some of your losses.
Policy limits play a significant role in insurance claims. As a result, insurance companies will likely only send an offer up to the insured’s policy limits.
For example, California requires drivers to carry minimum car insurance. If the insured has bodily harm coverage for up to $15,000, the insurance company will likely only send a settlement offer for up to that amount.
Sending the Insurance Company a Demand Letter
While the insurance company has an idea of what they believe your case is worth, your personal injury attorney may disagree. The demand letter is your lawyer’s version of an initial offer.
Your lawyer can craft a demand letter to send to the insurance company that details your losses. In many cases, your attorney may believe it beneficial to wait before sending the letter. Waiting gives you time to assess the extent of your injuries, receive medical treatment, and know whether your injuries will have long-term effects.
The demand letter will include:
- Details of the accident
- The extent and severity of your injuries
- An explanation as to why their insured is at fault
Your attorney will end your demand letter with a figure they believe is fair for your losses and injuries.
Along with the demand letter, your personal injury lawyer may include additional items, like evidence and documentation, to back up the information in the letter.
Determining a Fair Settlement Amount for Your Demand Letter
In your demand letter, your lawyer will include a figure representing the damages you’re entitled to receive.
To get to this valuation, your attorney will investigate the most important details of your accident and losses, including:
- Resulting Injuries: A fair settlement partly rests on the types of injuries you sustain and their severity
- Medical Expenses: Medical expenses include those you’ve already incurred and any you may have in the future due to your injuries
- Lost Earnings: If you lost time at work and therefore lost wages because of your accident and injuries, your lawyer will include it in your settlement amount
- Intangible Losses: These losses can include pain and suffering, mental and emotional distress, and permanent disfigurement
Every case is unique, so your personal injury attorney must thoroughly investigate your losses before determining what fair compensation would look like for your case.
You May Have to File a Lawsuit
Even with initial settlements and demand letters, you may still need to file a lawsuit.
However, filing a lawsuit does not automatically mean that negotiations are off the table. Even after your lawyer initiates the lawsuit, the insurance company can negotiate a settlement at any time during your case.
Your attorney may also file a lawsuit if time is running out. The statute of limitations restricts the time allotted to file a lawsuit, and once you miss it, you’re no longer entitled to file your claim.
If your lawyer files a lawsuit, don’t worry—a settlement may still be available.
Resuming Negotiations Before Trial
Throughout the life of your lawsuit, both sides have the opportunity to gather information and essential evidence to learn more about the accident and build their cases. This is called the discovery phase. Then, after both sides have what they need, they’ll have the chance to revisit settlement negotiations.
As previously stated, you can settle at any time during the lawsuit. However, most settlements occur between the time you conclude discovery and before the trial begins.
Waiting and collecting information allows the insurance company to ponder settlement amounts, and they may come around to settle with you for an amount that’s closer to what you deserve for your losses.
How to Obtain a Favorable Settlement in Negotiations?
When you pursue a favorable settlement from the insurance company, take specific steps to get the best outcome.
Present Strong Evidence
Evidence is one of the most critical parts of your case. Without evidence, you can’t succeed in proving cause, liability, or your injuries and losses, which are all necessary to seek financial recovery.
The type of evidence helpful to your case depends on your accident but may include:
- Photos and videos
- Surveillance footage
- Police reports
- Witness testimony
- Expert witness testimony
- Medical records and bills
- Doctor’s notes and testimony
- Mental health counselor’s notes
- Testimony from friends and family
Your personal injury lawyer knows the type of evidence you need to help strengthen your case and the chances of receiving a fair settlement.
Document Your Losses
Along with your evidence, you should always document losses resulting from your accident and injuries.
- Keep track of days missed from work
- Document your total amount of lost wages
- Maintain a pain journal detailing your injuries and pain levels
Suffering any loss from your accident can be devastating, but with the proper documentation, your attorney can include these losses in your settlement.
Calculate Your Damages
You need to know how much your case is worth to get a fair settlement for your injuries. Therefore, calculating your damages is essential.
Certain factors help determine the value of your case, including:
- The severity and extent of your injuries
- Past and future medical expenses
- The amount of time you missed from work and lost wages
- Whether your injuries left any lasting effects
- Intangible losses, like pain and suffering
Your lawyer can review these and other details to ascertain the monetary value of your case and pursue maximum compensation for your losses.
Avoid Speaking to the Defendant’s Insurance Company
After an accident, it’s common to have the other person’s insurance company contact you asking questions. Insurers do this purposely, hoping to use your words against you to limit their liability.
It’s never wise to speak to any insurance company that’s not your own without first discussing it with your lawyer.
Do Not Accept the First Settlement Offer
Because the insurance company tries to settle quickly and unfairly, you don’t want to accept their settlement offer immediately. Even if you’re considering it, don’t rush into an agreement without a personal injury attorney reviewing it and providing their legal opinion.
Have a Personal Injury Lawyer Negotiate on Your Behalf
Never engage in settlement negotiations on your own. Having a skilled personal injury attorney to handle negotiations yields better results.
A Personal Injury Attorney Can Negotiate for You
Lawyers know the laws and procedures in personal injury cases, including settlement negotiations. If you want the best possible outcome, an attorney can help you navigate your personal injury claim and get you on the path to financial recovery.