Tips for Negotiating an Injury Settlement With an Insurance Company

Position yourself to get the best settlement from the insurance company after any kind of accident.

Updated by , J.D. · University of San Francisco School of Law

If you're making a personal injury claim after any kind of accident, at some point it's probably going to be time to negotiate with the other side's insurance company. Here's what to know at the outset:

  • The personal injury settlement negotiation process might consist of nothing more than a few phone calls with an insurance claims adjuster, but that's a fairly rare scenario.
  • Even if you've taken the additional step of filing a personal injury lawsuit, settlement negotiations will likely be ongoing, and your case could reach an out-of-court resolution at any time.
  • If you or your lawyer have presented the insurance company with an organized demand letter and proper supporting documents, that's a great way to frame your case for settlement talks.

The Personal Injury Settlement Process

Every personal injury case is unique, and there's no standard point at which settlement negotiations begin in earnest.

Typically, if someone else caused your injury, and the incident is covered by their liability insurance, you'll be making what's called a "third party" claim under that policy. To get an idea of what these claims look like in the wake of the most common accident scenario, learn more about third party car insurance insurance claims.

The big picture injury settlement negotiation process typically looks like this:

  • Whether through emails, letters, or more informally, you (or your lawyer) and the other side's insurance adjuster will each make your points about the strengths and weaknesses of your claim.
  • Next, the adjuster will make an offer to settle your claim (if you already sent a demand letter to the adjuster, this offer will almost certainly be significantly lower than what you asked for).
  • You'll counter with a figure higher than the adjuster's offer but lower than your original demand.
  • Finally, whether it's after two or three phone calls, or after you've filed a lawsuit in court, you'll agree on a settlement figure somewhere in between.

Learn more about the timeline of a typical personal injury case. Now let's look at how to best position your claim for success during the negotiation process.

Have an Injury Settlement Amount In Mind

If you and your lawyer put together a demand letter, you should have determined what you believe your claim is worth. (Learn how insurers value a personal injury claim.) Within that range, and before you speak to an adjuster about your demand, decide on a minimum settlement figure that you will accept. This figure is for your own information—so you can keep your bottom line in mind when under the pressures of negotiating—but it's not something you should reveal to the adjuster.

You don't have to cling to the figure you set for yourself. If an adjuster points out some facts you hadn't considered but that clearly make your claim weaker, you may have to lower your hopes a bit. And, if the adjuster starts with an offer at or near your minimum, you may want to revise your figure upward.

Did the Insurance Company Send You a Reservation of Rights Letter?

If you receive a "reservation of rights" letter from the insurance company, don't be alarmed or intimidated. This letter informs you that the insurance company is investigating your claim, but that it's reserving its right not to pay you anything if it turns out that the accident isn't covered under the policy.

The letter simply protects the insurance company by preventing you from claiming that the company's insurance policy covers your accident just because it began settlement negotiations with you.

Don't Jump at the First Injury Settlement Offer

When the insurance adjuster makes you a first offer, it may be so low that it's just a tactic to see if you know what you're doing (more on this below). Or, it may be a reasonable offer, just too low.

If the offer is reasonable, you can immediately make a counteroffer that's a little bit lower than your demand letter amount. This shows the adjuster that you, too, are being reasonable and are willing to compromise. A little more bargaining should quickly get you to a final settlement amount you both think is fair.

Get the Adjuster to Justify a Low Injury Settlement Offer

If an adjuster makes a first offer so low that it's obviously just a negotiating tactic to see if you know what your claim is really worth, do not immediately lower the amount you put in your demand letter.

Instead, ask the adjuster to give you specific reasons why the offer is so low, and make notes of what he or she tells you. Then write a brief letter responding to each of the factors the adjuster has mentioned. (See a sample reply to an unreasonably low settlement offer.)

Depending on the strength of any of the adjuster's reasons, you can lower your demand slightly, but, before lowering the amount very far, wait to see if the adjuster will budge after receiving your reply.

The next time you speak with the adjuster, begin by asking for a response to your reply letter. The adjuster should now make you a reasonable offer upon which you will be able to bargain and arrive at a fair settlement figure. Remember, most personal injury cases settle at some point, it's just a question of when.

Emphasize Emotional Points

In these negotiations, don't bother to go over all the facts again. Just emphasize the strongest points in your favor—for example:

  • that the insured was completely at fault for the accident
  • that you had a very painful injury
  • that your medical costs were reasonable, and/or
  • that you had long-term or permanent physical effects.

If you've sent the adjuster a photo of a smashed car or a severe-looking injury, refer to it.

If your injury interfered with your ability to care for your child, mention that your child suffered as a result.

Even though there is no way to put a dollar value on emotional distress and "pain and suffering", these components of an injured person's losses ("damages") can go a long way toward getting an insurance company to come to the table with a fair settlement offer.

Put the Settlement in Writing

When you and the insurance adjuster finally reach agreement, immediately confirm the terms in a letter to the adjuster. This letter can be short and sweet, stating the amount for which you settled, what injuries or damages the settlement covers, and the date by which you expect to receive settlement documents from the insurance company.

Getting Help With a Personal Injury Claim

When you're making a personal injury claim, it's a near-certainty that at some point you (or a lawyer) will need to:

  • put together facts, records, and other evidence that puts your position and your claim in the best light, and
  • engage in some amount of (potentially contentious) back-and-forth with the insurance company, and stick with it until there's a fair result.

If you feel capable and willing, it might make sense to handle a personal injury claim on your own, at least initially. But if the insurance company doesn't seem to be taking your claim seriously, or if you're just not comfortable handling the process on your won, it may be time to consider putting your case in the hands of a legal professional. That's especially true if you've been seriously injured.

A personal injury lawyer will have the expertise to best position your claim for a fair result, and the experience to negotiate on your behalf until the best outcome is achieved. Learn more about when you might need a personal injury lawyer and how to find the right injury attorney for you and your case. You can also use the tools on this page to connect with a legal professional in your area.

Make the Most of Your Claim
Get the compensation you deserve.
We've helped 285 clients find attorneys today.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you