The Insurance Negotiation Process

By Chris Dixon


If you or a family member have been injured, you are eligible for reimbursement from the negligent party’s insurer (or the negligent party themselves). It’s rare that you can just file a claim and expect a check equal to the requested amount, and it’s often unadvised to accept that offer. In this section of the FAQ, we’re going to discuss how the insurance negotiation process works to help you deal with insurers if you’re having a difficult time getting just compensation for your injuries.

What Is The Process for Negotiating Insurance Claims?

The St. Louis personal injury lawyers at the Dixon Injury Firm have years of experience filing and winning claims for clients. It’s important to note that yes, you may be able to win a fair settlement from an insurer, but the odds are that the insurer knows you have a good case and is paying you out fast to avoid complications. If you expect this has happened or if the insurer sends too low of a counteroffer, contact a local injury attorney immediately for legal representation.

The Injury Claim Process

From the accident to a final settlement, the entire process is more or less negotiation. Based on how well you gathered evidence and supported your claim with precision, this could take anywhere from a few weeks to several months. Your goal is simple: To get the most reimbursement as possible. Reimbursement includes funds for lost wages, medical expenses, and other financial burdens associated with an accident. Every claim is different, and some escalate into cases tried in front of a judge and jury. To give an overview, here are 7 steps in the insurance claims process:

1: Filing a Claim

The first step to winning an insurance claim is to notify the negligent party’s insurer. If the alleged at-fault driver is uninsured, for instance, you may need to file a claim with your own insurance company. You should file a claim as soon as possible. If you’re unable to file a claim due to injuries or other reasons, have someone do it for you. Most insurance companies allow you to file claims over the phone or will direct you to an online form. Try to file within 24 hours.

2: The Reservation of Rights Letter

The goal of filing a claim is to begin the process. Once the at-fault party’s insurer receives the claim, they should send you a reservation of rights letter. This letter won’t say much more than that the insurer is aware of your claim and they will investigate it. Do not expect the insurer to admit fault or offer compensation at this point.

3: The Demand Letter

The demand letter is one of the most important components of winning an injury claim. The letter should be sent as soon as you or someone else is able to write it, and should include the following:

  • Complete history of the accident
  • Police reports
  • Witness testimonies
  • Hospital and medical expenses
  • Medical records
  • Contact information for everyone involved
  • Lost income
  • Out-of-pocket expenses

The demand letter should include all of the evidence and costs associated with your claim. The goal of a demand letter is to convince an insurer that you have a valid claim and are wanting reimbursement for special damages (listed above) in addition to general damages like pain and suffering.

4: Response to Demand Letter

The negotiation process begins when the insurer (or a claims adjuster) contacts you. They will acknowledge that they received your letter and, most likely, reject your claim or offer a much lower settlement. Do not accept their first offer. Insurers want to pay as little as possible, and will carve out any expenses and general damages they deem unnecessary. You will then have to make a counteroffer or, if you’re having second thoughts, contact a personal injury attorney.

5: Rejecting a Counteroffer

As mentioned, you’ll likely have to make a counteroffer. Consider lowering the claim (some demand letters multiply the amount of pain and suffering applies to the special damages, for example). Be sure to describe why you disagree with their adjusted offer. Submit the letter.

6: Continue to Negotiate

Essentially, the counteroffer process is a long negotiation until you and the insurance company can agree to a final amount. This can take months as each side provides more and more evidence. If you arrive at a settlement figure you can both agree on, then the process is complete.

7: Accepting or Rejecting Final Offer

The adjuster may give you a “final offer.” If neither of you can agree or you feel like the offer is unjust and doesn’t equal what you deserve, it’s time to call in an experienced personal injury lawyer who can help you negotiate a higher settlement or take the claim to court.

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