Auto insurance adjusters are known to be tough negotiators. To get a better personal injury settlement, you should understand how you too can become a tough negotiator.
Here are 5 tips you should use:
1. Have a Minimum Accident Settlement Amount
Before discussing your claims with an auto insurance adjusters, have a minimum settlement figure in your mind. This minimum figure is for you and you should not reveal it to the claims adjuster.
(If you were injured, use the personal injury settlements calculator to see how much your auto accident settlement is worth.)
Having a minimum amount prevents you from making a snap decision if the auto insurance adjuster gives you a “take it or leave it” option. You don’t want to make a rushed decision that you end up regretting later.
Of course, you don’t have to settle for your minimum amount. A good strategy is to wait to see the first offer from the claims adjuster. If the adjuster starts off the negotiation near your minimum settlement, then you know he or she has more money to negotiate with. You should then raise your settlement minimum amount up to a new minimum amount that you would be willing to accept.
This brings us to the next rule of negotiating…
2. Never Accept the First Accident Claims Offer by Auto insurance Adjusters
It is a well known practice that the auto insurance adjuster will intentionally give his or her lowest settlement offer first. This is to see:
- If you really know what your claim is worth?
- How desperate are you to settle your claim quickly?
The auto insurance adjusters always has more money to negotiate with. Each claim adjuster is authorized to settle their case within a certain range. The range of money the adjuster has to work with depends on how experienced the he or she is in handling settlement claims.
For example, a relatively inexperienced auto insurance adjuster will have a narrow range to settle with (ex: $5,000-$9,000) while a more experienced one will have a wider range to negotiate with (ex: $10,000-$25,000).
There are two questions you should ask yourself after getting the first offer:
- Is this a low but reasonable settlement offer? Or
- Is this offer unreasonably low?
If the amount is low but sounds reasonable, then you should give a counter-offer which is slightly lower than your original demand. By lowering your initial amount you show the auto insurance adjuster that you can be reasonable as well. This will make the negotiation process smoother and get you a quicker settlement.
You and the claim adjuster will then continue to go back and forth exchanging offers until both of you come to a settlement agreement.
If your settlement offer is unreasonably low then you should…
3. Demand an Explanation for the Low Settlement
A really low initial claims offer is usually a negotiating tactic to test your resolve.
If the first offer is clearly too low, you shouldn’t lower your original settlement demand. Instead, ask the insurance claim adjuster to justify the reasons for giving you such a low cash amount.
Take notes of these explanations. You will use these notes to analyze each point and then write up a response letter.
If the adjuster made a good point that you over looked, then you should slightly lower your claim. For example, perhaps there was a liability issue in your auto accident that you didn’t consider. This new point would make you more responsible for the accident and lower your settlement amount.
However, if there is nothing that made you more liable or disproved any of your original points, then this is probably just a bluff. Maintain your original demand.
Address each point that the adjuster specifically made in your response letter as being valid or invalid. Then ask for a new settlement or restate your original demand. (This is the similar to how you would write a demand letter).
Once you send in your response letter, don’t change your claims demand again. Wait until after you and the insurance adjuster have discussed your counter points in the response letter.
4. Never Reduce Your Settlement Demand More Than Once
As you are negotiating, the insurance adjuster will try to get you to lower your initial claim. Once you agree to a slightly lower claim, you should wait for the auto claims adjuster to give you a better settlement offer. Never lower your claim more than once until the other party increases their original offer.
If you keep lowering your claim and the auto insurance adjuster keeps maintaining their initial offer, your claim will appear weak. This will make it appear that you really don’t have a clue what you’re doing. The insurance adjuster will keep pushing your claim further down until you give up and accept a low settlement.
5. Gradually Decrease Your Settlement
When you are negotiating, don’t blindly lower your claim by any random amount. Reduce your settlement by small increments because more than likely, the adjuster will not agree with your offer, and you will have to reduce it again.
Decreasing your claim between 10%-20% is a good range. This is a good amount because if the auto insurance adjuster accepts it, you have not lost a lot of money. A 10-20% reduction is also significant enough to show that you are willing to negotiate.
You Decide What is Fair
At the end of the day it is up to you to decide what is a fair auto accident settlement amount. Don’t let the auto insurance adjuster bully you around. Following these 5 negotiation tactics will help you get more money from your car accident claims.
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