Getting into a traffic collision is not fun. You’re stiff from the accident, your car is messed up, and you still need to deal with your insurance company. Even if the accident isn’t your fault, your insurance company has a process for settling on a dollar amount to offer you. Unfortunately, it’s not always going to be what you expect.
I didn’t figure out that I could negotiate a settlement with your auto insurance until ten years into my car-owning career – and that cost me. But I can save you from the same fate.
Here are 3 steps for negotiating the best settlement with your auto insurance company:
Understand how the claims process work
While it seems that your insurer is pulling numbers out of nowhere, there is actually a process for how they determine how much to offer you. They first decide if they will repair or replace your vehicle. If it’s deemed a total loss, your insurance company may offer you a cash value on an older car.
When deciding on the cash value, the company uses valuation tools like Canadian Black Books or by checking Kijiji ads in your area to see how much it’s worth. Insurers factor in the general state of the car and any problems that might affect the price. Check with your own insurance company to see if they have a similar process before proceeding.
Make sure your company has all the information they need to process your claim. Problems can get complicated if they are not up-to-date on the situation.
Don’t jump on the first insurance offer
Even if you and your insurer disagree on settlement numbers, be polite and professional. After reviewing their offer letter, take a couple days to think it through and take notes to support your point if you plan on counter-offering.
When you make the phone call, be prepared to make a counter-offer a little higher than your magic number. List all the reasons why you believe you should receive the amount and ask the adjuster to justify their lower number. Once you have the reasons for the lower offer, it gives you a chance to research the facts and counter with a number closer to your ideal dollar amount.
All of these exchanges about the settlement with your auto insurance may be done verbally or in writing. Make sure you take notes if it’s a phone conversation. It may come in handy if things go off script down the line.
Emphasize the impact on your life
While I’ve been talking about facts, figures, and formulas, it’s important to remember that your claims adjuster is a human being. While I’m not advocating for you to spill your entire life story, personal details about how the accident has impacted your life can make a big difference in the outcome of your settlement with your auto insurance.
I remember negotiating with our insurance company when our car had been rear-ended by another driver. The insurance company didn’t want to pay out full value of the car and we were getting nowhere with them.
It was only after I talked about our long relationship the insurance company, how we had recently bought the car second-hand, and how we were still carrying the loan on a wrecked vehicle that we made any progress. The adjuster came back with a much more reasonable number after that and we were able to settle.
You don’t have to accept what you’re offered by the insurer. Do your homework and understand what’s reasonably and fair in the circumstances. Then bring that to the insurer and negotiate a better settlement.