When filing a car insurance claim, it’s common for claimants to accept the first offer. That’s because claimants aren’t sure what to expect from a claim. They may not even know they can negotiate their settlement. But, you have the power to increase your settlement claim.
How is the Settlement Determined?
A settlement amount goes through two stages if the claimant doesn’t negotiate. First, an investigation takes place. Then, your insurance company will tweak it based on the win rate.
An Initial Settlement is Determined Based on an Investigation
A settlement is determined based on the insured party’s version of events and what’s found during the investigation. If one party admits culpability, they become at fault. If no one claims fault or you’re in a no-fault state, the sued party claims “fault” if they become the defendant.
However, typically the insurance company becomes the defendant. At this point, all insurance companies will investigate the claimant and request documents that relate to their claim.
A Final Settlement is Determined Based on Win Rate
After both parties look at the evidence, either with a lawyer or solo, the insurance company will come up with a settlement amount. If your insurance company thinks your case will win in court, your settlement will be higher. However, all settlements will be less than what you’d win at trial.
Speak to a car crash settlement lawyer if you need help determining a settlement offer that gives you the maximum payout. You may need a loan to help pay for your legal fees.
How Can You Negotiate Your Settlement Offer?
The first step of any negotiation is confidence. Your insurance company will attempt to settle with the lowest offer possible, so you need to go in ready for a potential legal battle.
Know What You’re Selling
It would be difficult to negotiate the cost of your car if you don’t know what it’s worth. Most likely, your insurance company will total the car if the price for repairs plus its salvage value is equal to or more expensive than the cash value of the vehicle, but it’s up to their discretion.
If you don’t think the car is damaged enough to be totaled or the car’s features are worth more than the totaled value, get a printout of your car’s specs and fight the total verdict.
Prepare a Counteroffer
Don’t wait for the insurance company’s offer to start your research. We guarantee that the offer will be less than the value of your car, and doing research after the fact will delay your payout. Remember that you’re down a car, so you need to get a settlement right away to buy a new one.
Determine Local Comparables
Your car’s value is determined by its retail value, not trade-in value, so only use estimates that denote that value. If you had any major work performed on your vehicle in the last 6 to 9 months, either contact the mechanic directly or print off these receipts for your counteroffer.
Take a look at a few used car websites and print out vehicles that have similar features and mileage. They can help you determine a counteroffer that’s fair for you and the insurer.
Get a Written Settlement Offer
Once you’re contacted with an offer, ask them to send you the valuation report (or CCC report). Look at the report and see if the information provided matches your car’s features. If they’re correct, ask for three other items: the sales tax, payoff lien amount, and net settlement amount.
The sales tax is paid out by your insurance company, and the payoff lien amount is what you owe to the auto financing company for any outstanding loans. If these amounts are high, they may affect your net settlement amount, which is what you’ll receive from your insurer.
Make a Counteroffer Quickly
If the counteroffer you prepared doesn’t match up with the valuation report, quickly make a counteroffer. Email your insurer the documents you have on file, including recent repair costs, used car reports, and your car’s estimated retail value at the time of the crash/accident.
Even with documentation, your insurer may reject your counteroffer. If you need guidance on how to move forward, speak to the office of consumer affairs or contact a lawyer.
