Statistics show that car accident claims rarely go to trial. Instead, in order to avoid expensive and time- consuming litigation, parties to a car accident case usually reach a mutually agreeable settlement prior to trial.
The best way to ensure that you obtain a satisfactory settlement of your car accident claim is to present your most compelling case to the insurance company through a detailed demand letter and persuasive follow up negotiations. In this article, we'll offer some tips on settling your car accident claim.
In a demand letter, the injured party sets out the facts and circumstances of the accident and medical treatment, and sets the stage for settlement negotiations to begin in earnest. The demand letter is an injured person’s best opportunity, outside of court, to present his or her strongest case to the insurance company.
A well-drafted demand letter will contain a recitation of the events leading up to and during the accident, detailed information relating to medical treatment received, and an accounting of all related medical bills and lost wages. Generally, the demand letter will ask for an amount of money significantly higher than what the injured party will actually reasonably accept. This allows you and your attorney “room to move” during negotiations.
Learn more about the demand letter in a car accident case.
After receiving your demand letter, the insurance company will review it along with any documentation you provided. Typically the insurer will make an initial offer to settle the claim. Don’t be surprised if the first offer is a “lowball” offer. Just as your demand letter requested more than you were willing to accept, the insurer will usually offer less than they have actually allotted to pay your claim. Therefore, you should refrain from accepting the first offer extended to you by the insurer.
In response to the initial offer, you or your attorney should prepare a written response in which the offer is specifically declined. This letter should state the reasons that the offer is unacceptable. For instance, the offer may not cover all of your medical bills or may insufficiently take into account your inconvenience or pain and suffering.
Your responsive letter should politely but vigorously remind the insurer of the key parts of your initial demand letter. Your response should conclude with a counter-demand. The amount by which you choose to reduce your offer may depend on many factors; however, one easy way to counter-demand is to simply reduce your initial demand by the amount of the first offer. So, if you demanded $5,000, and the other side countered with an offer of $1,000, your new demand might be $4,000.
Back and forth negotiations will likely continue for some time. If negotiations stall, it may be helpful to provide additional information, such as a letter from a treating physician or photographs of continuing injuries or scars.
If negotiations reach a standstill, it may be effective for the parties to have a neutral party facilitate a settlement. A professional personal injury mediator is generally an attorney who has had significant personal experience in settling and trying personal injury cases.
The mediator can offer a fresh perspective, pointing out the strengths and weaknesses of each party’s case. A successful mediator will often be able to bridge the gap between the parties and encourage an amicable resolution.
Whether through mediation or simple back-and-forth negotiation, at some point the insurer may make an offer that meets your satisfaction. Before accepting the offer, double check that it will cover any medical or other bills which remain unpaid, and that it will provide you with reasonable compensation after deduction of attorneys' fees. If the offer is made verbally, you should follow up any verbal response with a written one, in which you reiterate the amount offered and accepted.
The insurer will generally refuse to send a check until it has received a “release” signed by the injured party. The release is a binding legal document that states that in exchange for accepting the offered settlement money, the injured party will not pursue any other claims for damages arising out of the accident.
Because the release bars any future recovery, you should be certain that your injuries have reached maximum improvement before accepting payment and signing the release. If you are satisfied that your medical condition is resolved, sign and send the release with a letter indicating that you expect to receive the check in the immediate future. If you have an attorney, the insurer will send the check to the attorney, who will then disburse the money to you.