An accident settlement occurs when there is an accident and the parties involved in the occurrence reach an agreement outside of the court system. Further, the injured party agrees not to sue for damages in exchange for a payment from the party who has legal liability for the other’s injuries and damages. The majority of accident claims are resolved through settlement instead of a trial, but how exactly is one negotiated?
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When Do Settlement Negotiations Begin?
A settlement negotiation begins with the “demand letter,” which is when the injured party states why the insurance company’s insured is at fault and therefore responsible for damages. It also explains the number and extent of injuries incurred by the claimant, details of any medical treatment received, income loss due to the accident, the claimant’s “pain and suffering,” and other losses. The demand letter concludes with the lump sum amount the claimant is willing to accept in order to settle the claim.
Demand the Right Settlement Amount
In a claim negotiation, it is important to begin with a specific settlement amount in mind, as well as a minimum settlement amount you are willing to accept. Most people do not have a clear understanding of what their claim is worth. A lawyer can help a claimant to calculate their medical expenses, property damages, lost earnings due to inability to work, any future lost income, estimated future medical expenses, and general damages due to “pain and suffering.” According to Cornell Law School, pain and suffering is defined as “the physical discomfort and emotional distress that are compensable as noneconomic damages. It refers to the pain, discomfort, anguish, inconvenience, and emotional trauma that accompanies an injury.”
Keys to Successful Injury Claim Negotiation
As mentioned earlier, it is important not to accept an adjuster’s first offer, as they often try to low-ball claimants in an attempt to see if the individual understands the value of their claim. Although, if the claimant finds that the initial offer is low but reasonable, the individual may make a counter-offer that is higher than what was presented by the adjuster. The individual should also justify the counter-offer by presenting the facts of the claim again.
However, if the claim is too low, then the adjuster should be asked to justify the initial offer. Then, the claimant can then respond to each of the factors mentioned by the adjuster. The claimant can then lower their initial settlement offer slightly or wait for a response from the adjuster. An experienced attorney can help an individual win a settlement amount closer to the amount originally stated in the demand letter.
Once a Demand is Made, How Long Should it Take?
Once an individual sends a demand letter, three things can happen, and each adheres to its own timetable. If the settlement amount is immediately accepted, which is unusual, the claimant can expect payment for damages typically between two weeks to two months.
However, if the insurance company does not accept your original demand, then a back-and-forth negotiation is triggered. Though it is not possible to give an estimate of how long this process takes, on average negotiations can take anywhere from fifteen to ninety days, but can last longer.
In a rare occurrence, an adjuster can deny an individual’s claim outright. The denial letter will include why the individual’s claim is denied. The factors stated in the letter offer a clue as to what will be brought up in court if a suit follows. Whether a claim is accepted, denied, or moves into negotiation, there is no set response time. Though, if an individual has not heard from the insurance company between forty-five and sixty days they should follow up.
Subjects of Negotiation with an Adjuster
Once both parties agree to a financial settlement amount, the claimant and the liable party sign an agreement, which details the following: the agreed upon amount and how payments are to be made, what legal rights the claimant forfeits by signing the agreement, and any other actions each party must take in order to resolve the claim.
Mistakes to Avoid When Negotiating Your Car Accident Settlement
A claimant must set the tone for the negotiation. This is where lawyers make the biggest difference as to whether or not an individual wins a settlement claim. When making a settlement demand an individual must set a strict business tone upon the first contact, with the knowledge of what the claim is worth, and the factors that support it.
Avoid recorded statements. Once a claimant gives a statement, the claim will be limited to what was said in the recording. This only benefits the insurance company.
An individual should also avoid any mistruths, as it only lessens credibility, and therefore damages the chances that an individual will win a settlement.
Do not give the insurance company medical information from the beginning. Once an individual is nearing the end of treatment, they may offer a “limited release”, which allows the insurance company to gather medical information related to the treatment of injuries. An adjuster should never need an individual’s entire health history, which may include pre-existing conditions.
Stick to the facts. An individual should limit their statements to the location, date, and time of the accident, the claimant’s name, address, phone number, and email, and the location of the vehicle.
Do not share your social security number. A social security number gives another individual access to a person’s credit history and other information that may be used against the claimant. This practice is technically prohibited, but it is best for the claimant to err on the side of caution.
Do not make claims without medical proof. Discussing an injury without any medical proof acts as a red flag for insurance adjusters. Claims to an injury will always be challenged by an insurance adjuster, particularly when no medical proof is presented.
Give contact information for witnesses, but not references. Witnesses at the scene of an accident may help to corroborate an individual’s story. It is often encouraged that an individual provides contact information for those present at the scene of an accident. Though, giving contact information for family and friends only allows an adjuster to hassle an individual’s references and possibly use information obtained from them against the claimant.
Always assume a claim could end up in court. Because anything said during negotiations can later be used in a court of law, it is important for an individual not to take for granted that the claim will settle. An individual should negotiate a claim as if it will eventually end up in court.
If a detail cannot be recalled, admit it. It is much better for a claimant to admit they do not recall something that happened during an accident than to try to answer, but give the wrong information. The information can always be found and presented at a later time.
Avoid Making Admissions Against Interest
As mentioned prior, what an individual says during negotiations, can be used in a court of law. It is important for a claimant to keep this in mind so that the individual does not make an admission against their own interest. In other words, it is imperative that nothing is said that would damage the case of the claimant. In this way, the individual has the best chance of winning their claim.
Know When it Pays to Have an Attorney
Unlike criminal cases, in civil cases (which includes personal injury) there is no constitutional right to an attorney. Although a person does have the right to represent themselves, statistics show that those that hire an attorney to represent them experience much better outcomes. Not hiring a lawyer can be much more costly in the end. To learn more about the benefits of hiring an experienced attorney, read “I Was Involved In a Car Accident. Do I Really Need a Lawyer?”
Severe Car Accident Injuries are Expensive
U.S. motor vehicle crashes in 2010 cost almost $1 trillion in loss of productivity and loss of life according to the National Highway Traffic Safety Administration (NHTSA). When an individual is in an accident they may believe that hiring a lawyer is an added and possibly unaffordable cost.
Yet, this is not always the case. Often law firms, like Panter, Panter, and Sampedro work on what’s known as a contingency fee. In this type of agreement, which requires no upfront costs, the attorney is only paid a percentage of the gross recovery if their client wins. The amount recovered allows the injured individual to pay for hospital care, continued treatment, damages to property, and helps them cover any earnings lost because of the accident.
Watch Out for Comparative Negligence
Florida is considered a comparative negligence state. According to FindLaw.com, “if a plaintiff is partially at fault for an accident in which they suffer harm, that person’s recovery of damages will be reduced.” For more information read, “Winning a Car Accident Lawsuit if You Were Partially At-Fault.”
Panter, Panter & Sampedro Can Help
Panter, Panter, and Sampedro is a leading personal injury law firm dedicated to protecting Florida’s families. For over thirty years, our experienced trial attorneys have worked one-on-one with clients to successfully get the justice, recovery, and compensation they deserve. If you’ve been involved in an accident, it’s imperative that you call for a free consultation right away. Call (305) 662-6178 and speak to an attorney today.