How To Handle The Insurance Offer After an Accident
How To Handle The Insurance Offer After an Accident
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Car accidents are enough to deal with, but in the aftermath, you and your insurance company will need to agree on a fair payout for the damage to your vehicle. The insurer typically has the upper hand in this process because they deal with claims every day — while you might be handling your first negotiation.
Here's how to empower yourself to reach the best settlement you can with your insurance company.
Research the cost of repairs
After the car accident, you'll file a report with your insurer. A claims adjuster from the insurance company will estimate the cost of repairing your car and will make an offer to settle the claim.
Negotiate in good faith
If the insurer's initial offer isn't enough, you can negotiate. Prepare by figuring out how much you think is fair, based on your repair estimates. If the offer is below what you anticipated, try to keep a level head. Ask the adjuster to justify their offer, so you can understand the factors that shaped it.
Beware of the "betterment" argument
One thing an adjuster can argue is called "betterment." A mechanic will need to use fairly new parts to repair an old car, which can actually make the car more valuable than before the accident — or so the insurance company may argue.
Most car insurance companies will either charge you for the excess value or reduce their payment in proportion to the value increase. To counter their betterment charge, you'll need to prove the parts will not in fact increase the value of your car. Testimony from your mechanic or an expert witness would help in this case.
Working with a write-off
If your vehicle has suffered extensive damage, it might be written off as a "total loss." That can happen when the insurance company says the cost of repairs exceeds the actual cash value of the car. What constitutes a total loss varies between states.
If you want to negotiate with the claims adjuster on this decision or educate yourself on total losses, you should find out which formula your state uses. It's helpful to show proof that the car is worth more than what the insurer estimated. For example, if the appraisal failed to fully account for any modifications you made, document those and show evidence that they may have raised the value of the vehicle.
If you still feel the payout offer isn't fair or you don't have time to negotiate with the claims adjuster, you may hire a lawyer to fight on your behalf. If the lawyer can help resolve who was at fault and get you a higher payout, then a lawyer may be worth it. But if the claim is small, consider taking on the work yourself.
After agreeing to a settlement
Once negotiations are wrapped up, you'll need to confirm the offer in writing. The document will include the amount of the settlement and how the funds should be used.
Chris is a Product Manager for ValuePenguin with years of experience in addressing critical questions about mortgages and homeowners insurance. He spends his time evaluating insurance providers and policy features to understand where consumers might find the most cost-effective coverage. Chris has contributed insights to the New York Times and many other publications.
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