How to Know When Your Car Insurance Settlement Offer is Too Low

How to know when your car insurance settlement is too low involves calculating how much your car accident is worth on your own. Add up all of your medical bills, treatment costs, repair costs, and any out-of-pocket costs. If your auto insurance settlement offer is low, then you will need to negotiate with your car insurance company. Enter your ZIP code below to consult with an attorney before negotiating with your insurance provider.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: May 5, 2022

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If you have recently filed an auto accident claim, you probably will be talking with an insurance claims adjuster very soon. The insurance claims adjuster will review the facts surrounding your auto accident claim and offer you a settlement amount to pay your damages and close the case. Once you receive the initial offer, you will have to make a decision about whether or not to accept it, or to attempt to negotiate a better auto accident settlement agreement.

The First Auto Accident Settlement is Low

An insurance adjuster is given authority to settle your auto accident claim within a certain dollar range. No one starts a car accident settlement negotiation at the middle of their range, and the insurance adjuster is no exception! She will start near the bottom of the range as her aim is to settle the case as cheaply as possible for her employer – the insurance company. For that reason, it is unwise to blindly accept the first offer when negotiating an auto accident settlement, even if it seems like a lot of money.

TIP:Take the time to review the claim offer, and reject it to demand more if the settlement amount does not fairly pay for your damages and injuries. Remember, the first auto accident settlement offer is typically low, so do some work before you accept!

How to Value Your Car Accident Settlement

The most important thing to do before you accept a car accident settlement offer is to calculate how much your car accident claim is worth. Evaluating a claim takes skill because a lot is considered in evaluating an auto accident claim:

  • the amount of property damage to the vehicles involved
  • the total amount of your medical bills, including any scarring or  disability
  • lost wages
  • other expenses related to your recovery

When an offer to settle an auto insurance claim is too low, this could mean you are not being adequately compensated for all the money or pain a car accident cost you, so it is very important that you know the full value of your claim before you accept a car accident settlement offer.

Here are some tips to consider when calculating how much your car accident settlement is worth:

  • Know your car insurance policy! Do you have medical coverage? If so, what are the limits? What about collision and comprehensive coverage? You can only claim damages and injuries that are covered in your policy.
  • Add up all your medical bills and other out-of-pocket expenses: the adjuster is going to add up all these bills, including mileage to and from the doctor, prescriptions, etc.
  • Take into consideration your treatment: was it extensive, did you have to go to physical therapy, due to the accident were you unable to perform normal duties at work or at home?
  • Make sure you are getting the money to repair your car to restore it to the state it was prior to the accident.
  • Consider who was at fault in the accident? How much did you contribute to the damage and injuries that you suffered? It is not uncommon for insurance companies to over state your level of fault to under pay your claim.
  • Look for future costs. Did you have to miss work, or is your injury permanent? What future costs are associated with your car insurance claim?

Assigning value to your car accident claim can be tedious and difficult, but it is critical to knowing whether or not your settlement offer is too low. Take your time and figure out the value of your claim before you make any decisions on a settlement offer.

TIP: It is also a good idea to ask your claims adjuster what they considered when they determined your car accident settlement offer. You can review the factors they looked at, and find areas where you disagree with them.

How to Respond to a Low Auto Accident Settlement Offer

If your auto accident settlement offer is low, then you will need to negotiate with your car insurance company. If this is not something you think you can handle, skip these tips and click here to contact a car accident attorney. Otherwise, keep the following in mind:

  • You need to reject the first offer. You should do this by writing an insurance claim letter setting forth the facts of the case, your injuries, and the value of your auto accident settlement. Click here for a sample letter rejecting the insurance company’s offer.
  • After establishing the value of your claim, decide upon a range that you feel would be fair compensation for your claim settlement.
  • Let the insurance adjuster make the first offer. Keep in mind, she has a range as well. This first offer will give you the low end of her range.
  • Start at somewhat of the high end of your range and explain any extenuating circumstances that may have prompted you to come up with this figure.
  • Don’t ask for an outrageous amount just because you know the adjuster has more money to play with in her range. That won’t bring you any closer to settling your claim. Asking for more than what is offered to open the door to further negotiations is perfectly fine. Just be reasonable.

Most importantly, before you negotiate an auto accident settlement, you should know what a car insurance attorney can do for you, and when you should seek legal advice.

When you’re injured in a car accident, it’s easy to get swept up in the pain and suffering and forget about the legal process. When it comes to settlement offers, don’t make assumptions about how much your case is worth.

Car accident consultations are free, so If you feel your offer for insurance claim settlement is too low, kindly decline the offer and tell the adjuster that you need a day or so to think about it. Then contact an attorney!

For more information about auto insurance claims, check out the following articles:

Get a FREE Case Evaluation From An Experienced Auto Accident Attorney.

Car Insurance Claim Process

What Is Your Car Insurance Claim Worth?

Negotiating Your Car Accident Insurance Settlement

Settling Your Car Insurance Claim & Demand Letters

How To Write A Demand Letter

How To Know When Your Car Insurance Settlement Offer Is Too Low

What To Do When Your Car Insurance Claim Is Denied

What To Know About Your Car Insurance Settlement Agreement

Should I Contact a Car Accident Attorney?

More Articles About Settling A Car Insurance Claim

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