In many ways, settlement negotiations in a car accident claim resemble settlement negotiations in any other personal injury case. An accident victim and the defendant or insurer bargain over the value of the victim’s costs and losses. They exchange offers and counteroffers until they reach an amount that is acceptable to both sides or until one side decides to proceed to litigation. That said, there are certain aspects of car accident claims that are distinctive or may seem less intuitive to someone who is unfamiliar with the process.
Whether you are pursuing a claim against your own insurer or the other driver’s insurer, you should be aware that the insurer stands in a hostile position to you. This is true even if the adjuster seems friendly, and even if this is a claim based on your own policy with the insurance company, such as an uninsured or underinsured motorist claim. Insurers are profit-driven companies that have incentives to deny or minimize claims to the extent possible.
As a result, you should make sure to collect as much evidence as possible regarding the accident and your injuries. An insurer may initially deny your claim or offer a lowball settlement if it does not receive enough information about the accident. You also should be wary of confiding in an adjuster. While the adjuster may seem sympathetic, they are looking for ways to deny or minimize a claim. If you suspect that you may have been partly at fault for an accident, therefore, you should not discuss this possibility with the adjuster but instead should share your concerns with an attorney.
While an insurer may threaten to go to trial if you reject its initial counteroffer, insurers generally prefer to settle claims. The unpredictability and cost of litigation make this option unattractive to insurers. You may not want to take this type of threat at face value early in the process, although litigation can become a real possibility if settlement negotiations stall over time.
Perhaps you were involved in a crash in which nobody was hurt, but you sustained significant property damage. Insurance can cover several forms of property damage, including repairs to your vehicle, reimbursement for a rental car while your car is being repaired, out-of-pocket expenses caused by your lack of a vehicle, and any damage to personal property that was in your car at the time of the accident. You should carefully document each type of cost or loss, even if it seems minor or if it seems obvious. The insurer will base its offer on the information that you provide. If you fail to include a certain type of expense, the insurer will have the right to refuse to cover it.
Car accident claims involving injuries can be much more complicated and hard-fought, since far greater amounts of money can be at stake. While you may well be able to handle negotiations over a property damage claim on your own, you should consider hiring a lawyer for settlement negotiations in a claim involving injuries. Some of the common forms of damages that you may be able to recover in an injury claim include medical bills, the costs of future treatment, lost income, lost earning capacity, and pain and suffering. You should be aware that not all of these damages may be immediately apparent, since some injuries emerge only over time. Since you only have one chance to bring a claim, you should hesitate to accept a settlement soon after an accident when the full scope of your injuries is not yet known.
If you hire an attorney, you still will make the ultimate decision about whether to accept a certain settlement offer. Your attorney cannot accept a settlement offer without your authorization. (If they do, you may have a new legal claim against your attorney.)
Part of accepting a settlement offer from an insurer involves signing a release. This means that you no longer have the right to bring further claims arising from that accident. In other words, the form releases the defendant and their insurer from further liability. You should make sure that the settlement covers all of your damages before you sign the release. As noted above, this concern particularly applies to the area of medical treatment. You should make sure that you have received a thorough diagnosis and treatment plan from your doctor so that you are not ambushed by unexpected costs later.
In many situations, you may need to get permission from your own insurer before you sign a release. This is because your insurer may have certain rights against the other driver and their insurer, such as a right of subrogation in cases involving underinsured motorists. When you waive your rights against the other driver and their insurer, you are waiving your insurer’s rights as well. If you later seek underinsured motorist benefits from your insurer, it may not provide them to you if you did not get permission to sign the release. This may leave you on the hook for covering the costs that were not covered by the underinsured driver’s insurance.
