Strategies To Negotiate A Higher Payout On Insurance Settlements

Negotiating a higher insurance settlement can be a challenging and stressful process, especially after a car accident or personal injury. It is important to understand the negotiation process and what you are entitled to as an insured party. Knowing the true value of your claim and being able to support it with evidence is key to achieving a successful outcome. While it is possible to negotiate without a lawyer, it is beneficial to be aware of the tactics insurance companies may use to reduce their payout.

Know the value of your claim

Knowing the value of your insurance claim is a complex process with many variables. It is important to understand the true extent of the insurance coverage available to you under your policy.

For property damage claims, the value of your claim will depend on whether your property is insured on a replacement cost or actual cash value basis. Replacement cost policies cover the costs associated with repairing or replacing a building with materials of the same or comparable quality. This does not include the value of the land the property is located on, but is calculated based on the cost of hiring contractors and purchasing materials. Actual cash value policies, on the other hand, will typically have lower premiums than replacement cost policies. This is based on the depreciated amount, factoring in the age of the item.

For vehicle insurance claims, insurance companies will typically pay the actual cash value, or market value, of the vehicle, which takes into consideration the replacement cost of the vehicle minus depreciation. This is often lower than expected and may not be enough to purchase an identical replacement. Factors such as the make and model of the car, previous accidents, normal wear and tear, mileage, and the general market value are considered.

When calculating the value of a commercial property damage claim, business owners will need to obtain key information regarding the damage, including whether the property is insured on a replacement cost or actual cash value basis. The total damage amount can be determined by filing a proof of loss form with the insurance carrier, which provides a detailed breakdown of the amount of loss being claimed.

It is important to note that the final payout for a commercial property claim cannot exceed the policy limits, and not all aspects of a commercial property may be covered by the insurance policy.

Avoid giving opinions about the accident

When negotiating a higher insurance settlement, it is crucial to avoid giving opinions about the accident. This is a key strategy to protect yourself and your claim. Insurance adjusters are trained to get you to talk about the accident and engage in speculation. They want you to provide statements that can be used against you during negotiations.

When speaking with an insurance adjuster, stick only to the facts of the case. Avoid speculating or giving your opinions about what happened, your injuries, or your recovery. Insurance adjusters are skilled at getting claimants to talk and may try to lead you into making statements that can weaken your claim. They may ask leading questions or try to get you to admit fault, even partially. Remember, anything you say can be used to reduce their payout, so be cautious and measured in your responses.

If you are unsure about what to say or how much information to provide, it may be helpful to consult an attorney. An attorney can guide you on what to say and what not to say during these conversations. They can also handle communications with the insurance company on your behalf, ensuring that your interests are protected. While hiring an attorney may come with additional costs, it can be worthwhile, especially if your claim is complex or involves significant damages.

In addition to seeking legal advice, it is important to independently determine the value of your claim. This includes assessing the damage to your property, considering any injuries you may have sustained, and calculating the associated costs. By understanding the value of your claim, you can more effectively negotiate a higher settlement. Remember, insurance companies will often make low initial offers, so be prepared to counter with a higher figure that is more aligned with the true value of your losses.

Finally, remember that you have the right to negotiate and that insurance companies are often willing to pay a reasonable and fair settlement. Arm yourself with knowledge, stay calm and measured in your interactions, and don't be afraid to ask for what you believe you deserve. By avoiding opinions about the accident and focusing on the facts, you can strengthen your position and improve your chances of a successful outcome.

Document everything

Documenting everything is one of the three principal rules of legal negotiation. It is important to document everything because insurance adjusters will try to pay the smallest amount possible for the damages incurred. They will scrutinize every detail to find opportunities to reduce or deny your claim.

Before you begin negotiating a total loss settlement with your insurance company, it is important to independently determine the value of your item. For example, if you are negotiating a settlement for a car, you should research the value of your car and come up with a number that you feel is fair for a settlement. This number should be the absolute minimum you are willing to accept and should not be revealed to the adjuster as it could impact what they offer. If your vehicle is determined to be a total loss, you can get a written estimate from a trusted professional body shop and bring this to your appraiser to work on negotiating a settlement.

If you are making a personal injury claim, you should send photos of your injuries on the date of the accident, as well as current photos to show how it has healed. Any injuries to your face are also significant. It is also important to know what your claim is worth and to have a minimum settlement figure in mind before speaking to an adjuster. This will help you to keep your bottom line in mind when under the pressures of negotiating.

It is also important to document all communication with the insurance company. For example, if you are negotiating via phone calls, you should take detailed notes on what was said during the conversation. If you are negotiating via email or letter, you should keep copies of all correspondence. This will help you keep track of the negotiation process and protect yourself in case of any disputes.

Know what's covered by your insurance

Knowing what's covered by your insurance is crucial when negotiating a higher settlement. This knowledge empowers you to understand your entitlements and effectively navigate the claims process. Here are some key insights to help you maximise your settlement outcome:

Firstly, it's important to recognise that insurance policies vary, and coverage depends on the specific plan you've purchased. For instance, in the context of homeowners' insurance, standard policies typically cover fire, lightning strikes, and other natural disasters, excluding floods and earthquakes, which require separate coverage. Similarly, homeowners' insurance covers personal belongings, but reimbursement for specific high-value items may necessitate additional listing or coverage. Thus, understanding the nuances of your policy is essential.

Secondly, be mindful of the role of insurance adjusters. These professionals are employed by the insurance company and aim to minimise payout amounts. They scrutinise claims and interpret policies in favour of the insurer. To counter this, consider hiring a public adjuster, who works for you, the policyholder, and uses their expertise to negotiate a better settlement. Their fees are usually a percentage of the final settlement amount. Knowing the strategies employed by insurance adjusters, such as delaying tactics or arguing against coverage, can help you anticipate and refute their arguments during negotiations.

Thirdly, when dealing with vehicle insurance, it's crucial to understand the concept of actual cash value (ACV). In the event of a total loss, the insurance company will offer a settlement based on the vehicle's ACV at the time of the loss, not its market value or replacement cost. You can challenge a low appraisal by obtaining a written estimate from a trusted mechanic or body shop and using it as leverage during negotiations. Remember, insurance companies often make extremely low initial offers to gauge your negotiation skills, so be prepared to counter with a well-researched, fair settlement figure.

Lastly, in the context of personal injury claims, it's beneficial to understand the negotiation dynamics. While hiring a lawyer is an option, it may not always be necessary or cost-effective, especially if the injuries are minor. Lawyers typically take a portion of the final settlement, so consider if the increased payout justifies their fees. When negotiating on your own, remember to document everything, stay calm and reasonable, and always ask for a fair settlement. Support your arguments with photos of injuries, highlighting their impact on your life, and don't be afraid to reject low offers.

Consider a public adjuster

When negotiating a higher insurance settlement, it is important to consider hiring a public adjuster. A public adjuster works directly for you, the policyholder, unlike an insurance adjuster who works for the insurance company. The goal of a public adjuster is to ensure you receive the full compensation you deserve. They are especially useful when the damage is extensive or when you feel the insurer’s offer is too low.

Public adjusters are experts in the field and can use their knowledge to negotiate a better settlement on your behalf. Their fees are typically based on a percentage of the settlement amount. It is important to be aware of the strategies that claims adjusters use to minimize settlements, such as delaying the process, using complicated policy language, or arguing that certain damages are not covered. Knowing these tactics can help you better anticipate and counter their arguments during negotiations.

When dealing with a car accident, it is common to become entangled with insurance companies to get claims paid promptly. Getting a fair price for the damage can be challenging, as insurance companies lose money when they have to pay out following an accident. Claims adjusters who work for insurance companies will try to pay the smallest amount possible for the damages. Therefore, it is crucial to independently determine the value of your vehicle before negotiating a settlement.

In the case of personal injury claims, it is possible to handle the negotiations without hiring a lawyer. However, it is important to understand the negotiation process and what is involved. Most personal injury attorneys take a cut of one-third of the settlement amount, so it has to be a substantial amount to make hiring one worthwhile. If you decide to negotiate without a lawyer, remember to document everything, do your research, and stay calm and reasonable throughout the process.

Frequently asked questions