After being in a car accident, you may need to seek compensation from an insurance company. Prepare to negotiate payment by doing your research, preparing your arguments, and possibly seeking help.
Insurance companies lose money when they are forced to pay for an accident. so a claims adjuster may try to offer you the smallest amount possible for your damage.
determine the value of your car
After a car accident, the value of your car will be determined by a claims adjuster with your insurance company, if it is a first-party benefit claim, or from another driver’s insurance company if it is a first-party claim. of a claim for third-party benefits.
The own benefits cover medical expenses for you, the policyholder, and the people in your car at the time of the accident. this is also called personal injury protection or a no-fault benefit.
third party benefits cover the damage caused in an accident. this is also called bodily injury coverage or liability coverage.
The adjuster has an incentive to pay you the minimum amount in both cases, so knowing the true value of your car is important to negotiations. We recommend that you collect estimates from multiple sources.
You don’t need to accept the appraiser’s estimate of your car’s value if it doesn’t match the estimates you found in your research.
negotiate with the car insurance company
If the adjuster’s initial offer is significantly below the estimates you gathered, you should negotiate with the insurance company. you do not have to file a lawsuit to get started. These discussions can take place in person or via email, but you’ll want to get the final decision in writing.
negotiation tip: Ask the adjuster to explain the rationale for their offer. after considering your argument, you can form a counterargument.
When negotiating with the insurance company, you should keep in mind the desired settlement along with the minimum settlement you will accept. Your high and low numbers should reflect the estimates you researched. During negotiations, keep a cool head and objectively weigh the strengths and weaknesses of your offer.
improvement and value of your car
“Improvement” is a clause in some auto insurance policies that says the insurer won’t pay for repairs or replacement parts that improve the condition of the car and increase its value. An old car, for example, may need new parts when it gets repaired. but new parts could make the car more valuable than it was before the accident. Most insurance companies will charge you for the additional value you are earning or reduce your payment in proportion to the increased value.
It can be hard to argue against upgrading because you’re essentially asking the insurance company to pay more than your car was worth at the time of the accident. but there are a few ways to counter an upgrade charge.
the state you live in affects how fault is determined
Where you live can affect the compensation you receive after an accident because each state regulates fault differently. this may affect your payment of a third party claim, such as bodily injury or property damage liability.
in washington, d.c., maryland and north carolina, for example, the law requires a determination of pure contributory fault. in these states, a driver must be 0% at fault to receive any compensation, which is a very high standard.
Other states, like Georgia, are a bit more lenient and only require that you be less than 50% at fault for an accident to receive compensation. Meanwhile, auto insurance in California pays pro rata, meaning you receive compensation based on the percentage of your fault in the accident. so if you are 25% at fault, for example, your payment is reduced accordingly.
In negotiations, the insurance company may want to prove that you are more at fault as a way to reduce your payment. be prepared to give them as much information as possible. Police reports, photos, and witness testimony can be strong evidence to help prove your innocence in an accident.
more tips to get more value for your car
after reaching an agreement
after negotiations are completed, you will need to confirm the offer in writing.
It doesn’t have to be long, just detailed enough to describe the amount of the settlement and what will be fixed.