Negotiation is both a skill and an art. Like it or not, the amount of money you end up settling for bears a very strong relationship to your negotiation skills. Your best bet is to hire an experienced personal injury lawyer to do your negotiating for you.
Maximum Medical Improvement (MMI)
You can’t really negotiate a claim until you know how much money to ask for. But you can’t know how much money to ask for, with any precision anyway, until your medical treatment is complete. This typically happens when you reach MMI–maximum medical improvement. MMI is the point at which further medical treatment will not improve your condition. It might mean you have fully recovered, or it might mean you are dealing with permanent disability.
Estimating Your Future Damages
Yes, it’s possible to negotiate your claim even when you have continuing medical needs, but you will have to estimate your future medical expenses, and that’s not ideal. If you suffer from permanent disability, you might also have to estimate your future lost earnings. Either way, you’re likely to need an expert witness to establish your claim. You might even need to estimate your future pain and suffering or emotional distress.
The Reservation of Rights Letter: Don’t Panic!
The insurance company will probably send you a “reservation of rights” letter as soon as they learn of your claim. In this letter, they tell you that they reserve the right to deny your claim if they find it to lack merit. Don’t worry about this–it is completely routine.
Your Damages
You first need to determine the defendant’s liability to you.
That means determining your own damages:
- Economic damages: Medical expenses, lost earnings, out-of-pocket expenses, etc.
- Non-economic damages: Pain and suffering, emotional distress, loss of enjoyment of life, etc.
- Punitive damages: An extra amount that courts sometimes award if the defendant’s behavior has been absolutely outrageous
Strictly speaking, property damage, such as a totaled car, is not part of a personal injury claim. In most cases, it still makes sense to resolve your property damage claim together with your personal injury claim.
Policy Limits
You could suffer $10 million in damages—but if the policy limit is $20,000, that’s all you’re going to get from the insurance company. The law enforces such limits because insurance companies would all go bankrupt if they didn’t.
The Demand Package
You need to send a demand letter to the insurance company to kick-start the negotiation process.
The demand letter should include:
- A description of the accident
- The responsible party’s fault
- The injuries you sustained and their impact on your life
- A summary of your medical treatment and the costs you incurred
- Your loss of income due to your injuries
- Your pain and suffering
- The amount of compensation you are demanding
- A deadline for the other side to respond to your settlement demand
If the value of your claim is substantial, it’s best to ask your lawyer to draft the demand letter for you.
Supporting Documentation
You need to include evidence to back up your demand letter claims.
This evidence might include, among other items:
- Your medical bills
- Your medical records
- Evidence of lost earnings (a letter from your employer, for example)
- Evidence of the defendant’s negligence (a photo of the position of the cars on the road at the scene of a car accident, for example); and
- Evidence of causation
Talk to your lawyer to decide which items to include.
Offer and Counteroffer
Almost certainly, you should not accept the insurance company’s initial offer. You probably shouldn’t accept their second offer, either. In all likelihood, the negotiation will descend (for a while) into a volley of offers and counteroffers.
Should You File a Lawsuit?
Sometimes, it pays to file a lawsuit.
Filing a lawsuit can:
- Get the insurance company’s attention if they’ve been ignoring you
- Beat the statute of limitations deadline
- Get you access to the pretrial discovery process (which could provide you with a great deal of useful evidence)
You can always drop your lawsuit later-–in exchange for a generous settlement offer.
The Settlement Agreement
Do not download and print a “settlement agreement” from the internet. Your lawyer and the other party need to hammer out the terms of the agreement based on your individual circumstances. A signed settlement agreement is a legally binding contract.
A Galveston Personal Injury Lawyer Can Help You With the Negotiation Process
Insurance adjusters pursue one and only one goal–to further the interests of their employer, the insurance company. Unfortunately, they do not respect people who try to represent themselves in an insurance claim of substantial value. That means a strong likelihood of a lowball offer or an outright refusal to negotiate your claim. You might be shocked at how quickly their attitude can change once they discover that you have hired a veteran personal injury lawyer from The Law Firm of Alton C. Todd Personal Injury Lawyers. Contact us at 409-207-9299 to schedule a free consultation.
