How Do Insurance Companies Negotiate Settlements?

Collecting accident data is one of the many responsibilities of the Nevada Department of Transportation. According to that data, there is an average of 16,800 car accident injuries in Las Vegas alone. Nearly every one of those accidents will most likely generate an insurance claim. That claim is just the start of the settlement process.

If you are involved in this situation, it will help to know how insurance companies negotiate settlements for car accident cases.

With an accident that involves injuries, you might not know how much a settlement should be until you reach the state of maximum medical improvement (MMI). That is when your primary care physician has deemed your injury healed and no other treatment could improve it. That is not to say that your injury could worsen.

The bottom line: You can’t start negotiations with an insurance company until you know what you’re asking for.

First Contact With the Insurance Company

Whenever you get into an accident, your policy could require you to notify your insurance company. You then might file an initial claim based on an insurance adjuster’s estimate of the damage to your vehicle. There could also be preliminary numbers for medical expenses.

At this point, the insurance company might reach out and offer an initial settlement. That is especially true if it is clear that you weren’t at fault in the accident. They would like nothing more than to cut you a check and close out the claim.

However, that check might not be enough to cover your out-of-pocket expenses or any future fees. If you sign off on that settlement, you will not be able to go back to ask for more. This might be the insurance company’s idea of the perfect negotiations: One offer, take it or leave it. That is not going to always be to your benefit.

The Merits of a Claim

You should discuss what happened with an experienced Reno car crash attorney. They will be in the best position to examine the merits of your claim. They will investigate the accident details to determine the other motorist’s liability. Nevada is a comparative negligence state. That means everyone involved can share the blame for an accident.

However, if the other motorist is over 50% at fault, they and their insurance carrier will be responsible for the compensation.

Your attorney will also know how your injuries have impacted on your ability to work and enjoy life. Those elements will be part of the settlement. It is also vital to conduct a thorough policy review. An insurance company is only obligated to pay the maximum benefits as stated in the policy. Based on the calculations made by your attorney, that maximum amount might be the exact number to ask for.

Demand Letter

Once you agree to the settlement amount, your attorney will send your insurance company a demand letter. In this letter, your attorney will present the facts of the case and the discussion of negligence on the part of the other driver.

The letter will also break down the amount of economic and noneconomic damages you want to be compensated for. That letter can also provide supportive documentation.

Follow-up Conversations

After the insurance carrier receives the demand letter, they will likely reach out to your attorney with a counteroffer. That offer will undoubtedly be lower than the amount you and your attorney are asking for. There could be several rounds of conversations until an agreed-upon number is reached. That will be a settlement offer.

If you agree to the settlement and sign off on future liability, the insurance company will have 30 days to make the final payment.

However, if you do not think the insurance company’s offer is fair, you can file a lawsuit against to seek the compensation you feel you deserve.

Filing a Lawsuit

When you file a lawsuit against an insurance company, you are demonstrating your resolve. It means you are not backing down. This forces the insurance company to hire attorneys and prepare a defense. Before going to trial, you will most likely be called to provide a deposition. This is your chance to put on the record how the accident has impacted your life.

At that point, the insurance company might return with another settlement offer. That is because they realize your testimony could sway a jury in your favor.

Many cases are settled out of court. In fact, it is not uncommon to go through the jury selection process and then reach a settlement. The court could also order both parties to mediate to settle their dispute. That is when a neutral mediator listens to both parties and comes up with the final settlement number.

Starting the Negotiation Process

Insurance companies strive to make it easy for their policyholders to file a claim. You can do it right from a smartphone app. However, that could put you in a compromised position to get a much less remedy than you deserve. That is why you want to start the negotiating process by talking with the Law Office of Matthew L. Sharp.

We can take the lead with those negotiations and become an advocate for your cause. Call to set up a consultation to discuss your accident.