Getting into an accident is an emotionally draining experience. If you’re lucky, you, your passengers, and anyone else involved walk away without injuries. You just need to deal with the insurance company for the property damage.
If you’re at fault and you have collision insurance, you have to deal with an adjuster from your insurance company. They will assess the damage and determine the amount you’ll receive for the claim.
But you might find yourself surprised when your insurance company offers you much less than what you expected. If you want to negotiate, it’s possible to make it a pain-free and smooth process.
Here’s how car insurance works when it comes to negotiating a car insurance claim settlement.
Filing an insurance claim vs. paying out of pocket
It’s not always obvious whether you should file a claim or pay out of pocket.
When you submit a claim, you might not get the amount you want from the insurer. And you will most likely see a spike in your premiums. In some cases, it might be beneficial to pay out of pocket.
If you get into a car accident that involves other people and their vehicles, it’s always a good idea to file a claim. Even if the damage is minor and/or the person seems unhurt, it’s best to contact your insurer.
But say there was no one else involved in the accident. And you have minor damage on your car from backing up into a light post. You could pay for the damage out of pocket.
But this depends on: how big your emergency fund is and if the damage is lower than your deductible amount. Paying out of pocket could save you from a high premium spike from filing a claim.
If you decide to file an insurance claim, here’s how to make the process as smoothly as possible.
What you need to successfully file a claim
Filing an insurance claim requires important documentation. The insurance company will refer to the information you provided. This helps to determine how much compensation you’re entitled to. So make sure you’re prepared.
To successfully file a claim, you’ll need the following items:
It’s important to get the contact information of the other party involved in the accident as well as any witnesses who may have seen what happened.
This will help the insurance company gather accurate information about what happened.
Be sure to provide not only your policy number, but that of the other party involved in the accident.
You will find your policy number on your insurance card, billing statement, and your declaration page.
Having documentation of the damage is crucial while going through the settlement process.
Photos will also assist you while negotiating your settlement, by making any counter offers you present stronger with evidence.
Several repair quotes
To back up your argument for a higher settlement, try to get at least three estimates from different body shops on how much it will cost to repair your car.
If your estimates are very different from the insurance adjuster’s, you can use this to your advantage when negotiating a higher settlement.
Why your claim settlement might be lower than expected
You did everything right: You filed a claim successfully and was careful to include all the necessary items. Much to your surprise, however, your claim settlement comes out to be much lower than you were expecting. Why?
After looking at all the submitted information and reviewing your policy, the insurance company will determine how much it thinks you should receive. Based on your coverage, this might not be as comprehensive as you may think.
Auto insurance claims will only cover what’s in your policy. If you’re at fault in an accident and don’t have collision insurance to fix your car, you will not be able to file a claim for repairs.
It’s important to know your auto insurance coverage before submitting a claim. Do your research and always read the fine print of your policy before submitting anything to your claims adjuster.
Tips on how to successfully negotiate your claim
When the time comes to negotiate an auto insurance claim, it’s important to be as strategic as possible. It’s the fine details that will have you come out on top.
Here’s how you can ensure a smooth negotiation process:
Do your research
Samantha Kohn, communications manager at AutoVerify, says an individual should do their due diligence in research before even thinking about accepting an offer from a claims agent.
Individuals should look up their car’s value from many sources to get an idea of how much they should expect or aim for in the settlement.
“There are services out there that calculate your vehicle’s true value and provide you with a report that you can use in your insurance negotiations,” Kohn says. “These reports are free to the consumer and are created using trusted, unbiased data.”
Using a website like Kelley Blue Book is a great place to start. Since it works independently, you can trust that the data is accurate.
Keep everything in writing
All correspondence with the insurance company and claims adjuster should be recorded in detail in writing.
Keeping these records will help ensure you protect yourself throughout the negotiation process and get the money you deserve.
Consider rejecting the first offer
“It is not only acceptable to reject the first offer, but it may be essential for the negotiating process,” says Jake McKenzie, Content Manager at Auto Accessories Garage.
It might feel awkward at first, but writing a detailed response of rejecting the first offer and stating why, along with a counteroffer, will help strengthen your case.
Be sure to provide information from your initial research to justify why you think you deserve more in the settlement.
While it can be easy to assume that your claim adjuster is on your side, keep in mind that they are working on behalf of the insurance company. It’s their job to give a low payout to save the company money.
“It’s important to remember that your claims adjuster has the ability to offer a range of payouts, and part of their job is to get you to agree to a figure from as low in the range as they can manage,” McKenzie says.
He recommends being respectful throughout the process. Kindness always goes a long way. As well as patience.
If you have the right information and documentation, this will make things go smoothly. It’s going to be a lengthy and drawn-out process, but it’s worth your time to negotiate.