How to negotiate a settlement with an insurance claims adjuster.
How to negotiate a settlement with an insurance claims adjuster
Whether you’ve been in an auto accident, had your car stolen, or it has been otherwise damaged, you will need to file a car insurance claim with your insurance company.
As you take the necessary action to be compensated fairly, negotiating a better settlement on your car insurance claim can be stressful.
The insurance adjuster’s role is to resolve the claim as quickly as possible and as cheaply as possible for the insurance company. This can cause a frustrating experience for you as the insured.
This guide will outline how to haggle with an insurance claims adjuster to make the negotiation process work in your favor.
Table of contents
- What is an insurance claims adjuster?
- How do I negotiate with an insurance adjuster?
- The settlement negotiation process
- What can I expect during the negotiation process?
- Negotiating insurance claims FAQ
What is an insurance claims adjuster?
Simply put, an insurance claims adjuster determines liability as part of their working role.
The claims adjuster's job is to investigate accidental damages to people and property. Then, based on what they discover, they calculate the extent of the insurance company's liability.
While investigating a personal injury case, an adjuster will determine if the claimant's injuries are eligible for coverage or to what extent. Depending on the outcome, this will be covered by the claimant’s insurance or those found at fault.
If the adjuster finds coverage, further investigation takes place to determine the extent of this insurance coverage.
Part of the investigation phase may include the following:
- Interviews with claimants and witnesses
- Inspection of injuries or property damages
- Review of relevant materials and reports pertinent to the case
Once the insurance claims adjuster has completed investigating the claim, they draft what’s known as a damage report that details the financial losses related to the claimant’s accident.
The information in the damage report is then used to initiate the claim settlement process.
How do I negotiate with an insurance adjuster?
To get a fair settlement, you must demonstrate that you fully understand your policy.
You can negotiate a fair deal with your insurance adjuster by demonstrating that you understand what you're entitled to.
First, you shouldn’t accept the first offer, especially if you believe it's too low. It’s common practice for an adjuster to test if you’ll take the first lower offer.
When you decline the offer, you must be resolute and represent your case with your policy details. Further to that, here are 5 steps to haggle your settlement.
The settlement negotiation process
The process of negotiating your settlement starts by filing your claim.
Step 1: File your insurance claim
The details of your accident aside, the first step in negotiating an insurance settlement is determining where to file the insurance claim.
After the accident, obtaining insurance information from the person responsible for your injuries was an important step in the process.
After that point, you should contact the insurance company and file your claim as soon as possible. Ideally, you should aim to contact them within 24 hours.
It’s worth mentioning here that the insurance company is not on your side, even though getting their help is necessary. Negotiating with them and being organized throughout the process is your responsibility.
Most insurance companies accept applications over the phone or by completing an online form. Whichever option you choose, you start the negotiation process by filing the claim.
Step 2: Organize all of your records
After you have started the process, the second step is organizing all of your records.
For defense purposes, you should have an organized record of documents related to your accident to use when negotiating with an adjuster.
This step is essential as your documents are your evidence during negotiations. Well-organized documents in chronological order can make all the difference.
You will build your case by organizing your files and stand a better chance at winning your case.
Your documentation may include the following:
- Photographs of injuries
- Photographs of vehicle damage
- Police or accident reports
- Witness statements
- Any medical bills
- Property damage quotes
- Car repair estimates
Remember to keep any materials that can be used for validation purposes in your files. You have a higher chance of a settlement that works in your favor the more relevant evidence you have to defend yourself.
Step 3: Calculate your minimum settlement amount
Once you have completed both of the first steps, it's time to calculate what your claim is worth to the best of your ability.
To calculate the approximate value of your claim, you should review your records and consider the following financial implications:
- Pain and suffering
- Medical bills
- Expenses related to the accident
- Lost wages
- Damaged property
In this step, you need to calculate anything that has a value attached to it. If the accident cost you money or affected your ability to work, you should add it to your calculations.
Once you've approximated an estimate, you must send a “demand letter” demanding fair compensation to the insurance company. This formal letter should outline all of the damages you incurred from your accident.
You need to build a case for the compensation you're entitled to. Therefore, include as many details about the accident as possible in your demand letter.
If applicable, you should include details about:
- The accident
- Your injuries
- Medical treatment
- Loss of earnings
- Pain and suffering
- Emotional distress
After this point, have a minimum settlement amount in mind, but don’t share it. You can consider this while you wait to hear from the insurance adjuster.
This is the figure you will have in mind when you begin negotiating with the adjuster. Ideally, you will refuse to go any lower than this number.
Step 4: Reject the adjuster's first settlement offer
Once you hear back from the adjustor, you might receive a low settlement offer. This is part of the claims process, and their offer might initially seem shocking.
Beginning with a low offer is a common tactic that adjusters use to test whether you understand what your claim is worth.
No matter if your claim is reasonable, the adjuster will try to limit the extent of their company's liability and take advantage of your lack of knowledge to pay you less. The adjusters will exploit your lack of knowledge if they can.
At this stage, it is advisable to send them a counteroffer. In your next letter, you can request more details about their valuation and explain your reasoning for rejecting their initial offer.
The negotiations begin once you have rejected their offer. This is when you need to use your evidence to defend your demand for fair compensation.
Step 5: Specify the details of your case
You must clearly outline your case's details and emphasize why you rejected the insurance company’s initial offer.
The goal is to get the insurance agents to agree to your settlement amount and reach the optimal outcome. To ensure you have the upper hand, you should be honest and accurately detail the accident while also emphasizing your injuries.
You want the optimal outcome, but don’t include unnecessary information. It’s advisable to focus only on your case's strongest points and leave out the weakest facts.
Suppose you were involved in an auto accident. Then you should emphasize the pain and suffering caused to you and include any long-term physical effects that resulted from the accident.
If it’s relevant, emphasize how the other driver was at fault. You should also list the medical bills you had to pay to treat your injury.
When you emphasize the strongest points of your case and back them up with organized evidence, you defend your position from a strong point.
You can show the insurance adjuster that you are a capable negotiator and will not accept low offers.
What can I expect during the negotiation process?
Aside from the steps to take, there are a few more things to remember when negotiating an injury settlement.
1. Be mindful of the time
Time is ticking from the moment you need to file a claim. You should consider the amount of time you must take action, while negotiations themselves can take longer than expected.
It’s wise to file your claim immediately and after you've sought necessary medical treatment.
Make sure to consolidate your evidence documents early in the process to ensure the details of your accident are accounted for. The more evidence you have, the better.
To show them that you know how to negotiate, add a date and specify the deadline for the adjuster to accept your offer.
2. Be careful what details you include
Your claim adjuster is looking to protect his insurance company, so they will use what you say against you.
In other words, the insurance adjusters will take advantage of your information to save their company some money at your expense.
You should be honest about your circumstances, but don't include information you'll later regret. If you can, you should refrain from admitting any fault. Instead, you should focus on the severity of your painful injuries.
The adjuster is looking for ways to do the opposite as you - to downplay the severity of your accident. They will look for ways to assign blame, so make sure you don’t allow that to happen.
3. Hiring an attorney can work in your favor
The adjuster understands the law in ways you likely do not and will use that to your disadvantage. The insurance company has the upper hand when dealing with you by yourself.
Fortunately for you, hiring an experienced personal injury attorney is possible. They can help you to fight this battle and help you to win the settlement.
Furthermore, the attorney will know the loopholes and tactics the adjuster will use and deal with all of that on your behalf.
An experienced attorney can negotiate for you and reach a better settlement claim.
Negotiating insurance claims FAQ
Am I allowed to negotiate an insurance settlement?
Yes, you are within your rights to negotiate for a better insurance settlement. It isn’t against the law.
You aren’t guaranteed to win a settlement, but you can attempt to negotiate your claim.
What is a good settlement offer?
This depends on your expenses. As a general rule, if you've reached a settlement that covers all of the expenses you need to cover your claim, that’s a good settlement offer.
If your coverage limits haven’t been reached, you shouldn’t settle and instead reject the offer.