The last thing anyone wants is to suffer a personal injury from a car accident.
A car wreck can be devastating physically, emotionally, and financially. As the victim (or a family member of the injured person), you likely feel overwhelmed. Particularly when it comes to being compensated for the pain and suffering your injuries have caused and the unexpected financial burden.
Knowing what factors and strategies will maximize your car settlement can give you the understanding and peace of mind you need to deal with this unexpected trauma.
This article discusses different strategies and tactics you can use to negotiate a favorable settlement of your auto accident claim. Adopting one of the recommendations – and whether it works – depends on your opponent, how much money is at stake, and where you are in the civil litigation process.
Keep reading for tips to negotiate a fair car accident settlement with the auto insurance company. This advice can help if you try to settle with the defendant’s liability insurance or your own (to resolve a first party underinsured or uninsured motorist’s claim).
Contact my firm today if you have questions about car accident laws or would like a top-rated injury attorney to negotiate an insurance settlement for you. We represent auto accident victims in Virginia, Maryland, and elsewhere in the country. And we want to help you recover.
The majority of all claims for personal injuries or wrongful death resulting from negligence are settled before the case goes to trial. According to recent statistics, ninety to ninety-five percent of civil cases settle before trial.
There are several reasons why you – the accident victim – may want to consider settling your injury case:
The average insurance settlement for a personal injury car accident case in the United States is $15,000.00 to $25,000.00. Indeed, the Insurance Information Institute’s (III) 2018 data found that the average auto liability claim for bodily injury was $15,785.00. The average payment for property damage was $3,841.00.
But knowing the average insurance payout does not answer your most important question: How much money can you expect with your car accident settlement?
Some insurance companies try to use computer programs and algorithms to create formulas for car crash payments. The adjuster inputs medical codes and other items, and the computer program spits out a figure. However, in our opinion, these computer-generated settlement offers are rarely fair.
But these formulas cannot account for many factors, including how much pain, permanent impairment, or the loss of the enjoyment of life are worth.
And these factors explain why payouts for car accident settlements range from a few hundred dollars to millions of dollars or more for catastrophic injuries and deaths.
Before discussing the strategies you should employ, let’s look at the general factors leading to higher personal injury settlements for auto accident injuries.
The items below are just a sample.
The more elements and damages you can prove, the greater the settlement you should get.
The type of injury you suffered is a critical factor in determining your final auto accident settlement amount. I find it is the most crucial variable in predicting settlement and verdict outcomes.
Other factors equal – those who have suffered severe injuries that will require lifelong medical care and result in permanent disability will receive more money through a settlement.
Sometimes the severity may be unknown at the time of injury, which is an important reason to seek medical attention right away, regardless of how you feel. A medical diagnosis may reveal injuries that have not yet physically manifested themselves.
For example, persons who suffer orthopedic injuries in a car wreck (fractures, back injuries, torn meniscus, rotator cuff tear, etc.) may not realize they have a concussion until the physical pain lessens. It is not until they have some pain relief that they recognize cognitive problems.
Who is at fault for the car crash is not in dispute in most auto accident cases our firm handles in Virginia. This is due to the contributory negligence doctrine, which prevents you from recovering compensation for personal injuries if you contributed to the accident – even a little bit.
However, there are sometimes fights about liability. If so, the insurer is less likely to offer a reasonable amount to settle the case.
In these situations, you should estimate the likelihood you will win the case at trial and multiply that percentage by the verdict you believe you will receive if the defendant is found liable.
For example, suppose you think your case is worth $1 million when considering economic and non-economic damages.
But there is a 30% chance you will lose on liability.
Therefore, $700,000.00 is a reasonable car accident settlement figure ($1 million multiplied by the 70% chance of success).
Negligence comes in all shapes and sizes.
Under tort law, individual can be held liable for any negligent act or omission. However, more egregious acts can significantly impact your settlement, even if they do not cause increased damages.
There are two reasons for this.
First, the more blatant and heinous the negligence, the less likely an insurance company will try to undervalue your settlement. Insurance adjusters and defense attorneys understand that jurors often award damages based on the acts resulting in liability. And it is challenging to separate liability from tort damages. Therefore, the more disturbing the negligence (or if the defendant acted intentionally), the greater the likelihood of a significant verdict.
Second, if litigated at trial, certain negligent acts can lead to an award of punitive damages to punish the at-fault party and encourage others not to act this way. These damages will result in higher overall compensation for your claim.
For example, in Virginia, you may recover punitive damages if you prove that the defendant acted with “actual malice” or “willful and wanton” negligence.
Actual malice is a “sinister or corrupt motive such as hatred, personal spite, ill will, or a desire to injure the plaintiff.”
And willful and wanton negligence refers to an “action taken in conscious disregard of another’s rights, or with reckless indifference to consequences that the defendants is aware, from his knowledge of existing circumstances and conditions, would probably result from his conduct and cause injury to another.”
There is, however, a $350,000.00 punitive damages cap in Virginia. Because of this cap, it is often better not to plead punitive damages and instead ask the judge or jury to return only compensatory damages. But you can argue about entitlement to these damages when negotiating an auto insurance claim.
Pain and suffering are unique elements of your injury. No two people will experience pain and its impact in the same way.
Therefore, determining the value of these damages can be difficult to calculate. Indeed, all non-economic losses can be hard to quantify.
That said, pain can be life-altering. Its cost is high; pain can take away your hobbies and independence. And for this reason, people who demonstrate chronic pain typically receive higher car crash settlements than those who have a full recovery and can return to their pre-accident lives.
While sometimes unfair, an insurance company will examine your overall health, looking for any chronic illnesses or pre-existing conditions that may contribute to your injuries.
In some cases, the insurance company will allege that your pre-existing health conditions solely cause your injuries. But, more often, they will use it to offset the damages you are claiming resulted from your car accident. Bottom line – your health leading up to the accident will be essential in your overall settlement amount.
This factor is significant if the injury you suffered is catastrophic or ongoing.
Catastrophic injuries often require ongoing medical treatment (including home health care or placement in an assisted living facility). Therefore, the longer your life expectancy and need for treatment, the higher the expected auto accident settlement.
This is a relatively straightforward yet relevant factor. The greater the damage to your vehicle or any personal belongings, the greater the overall settlement you can demand.
Indeed, some insurance companies base their car accident settlement offers on the extent and existence of visible damage to your vehicle. This is another reason it’s important to photograph the accident scene, including your damaged vehicle.
In addition to using the property damage to support the extent and seriousness of your injuries, you may recover money damages for the cost of repairs and diminished value of your property.
You may be entitled to interest on the judgment if you go to trial and win.
In Virginia, interest runs at 6% per year until paid.
The amount of judgment interest owed may be significant if the judge or jury returns a large damages award. It takes a long time for the case to go to trial or wind its way through the appellate process.
A court judgment against an insolvent, uninsured, or under-insured defendant has no value. It is, therefore, vital that you investigate and determine all sources of financial recovery.
In most car accident cases, the liability insurance available limits the potential personal injury settlement or verdict. Therefore, determining (a) all sources of insurance coverage and (b) the coverage limits for these policies are two things you must do early in the settlement evaluation process.
You can determine how much liability insurance coverage the defendant has under both Virginia Code Section. 8.01-417(C) and the Supreme Court of Virginia Rules addressing discovery devices.
Suppose the defendant does not have insurance, is underinsured, threatens bankruptcy, or may have charitable or sovereign immunity. In that case, you might have to pursue a first-party insurance claim through your coverages.
We also recommend investigating the defendant’s independent financial status (assets and income). These are potential recovery sources when negotiating a personal injury settlement.
For example, you have a better chance of recovering monies if you have a product liability claim against a large manufacturing company than if you sue an unemployed driver.
Personal injury litigation takes patience and resilience.
If the insurer knows you are desperate for cash and out of work, it may reduce the amount it offers through settlement. Its goal is to “starve” you out.
However, those of you with significant savings or other sources of income are in a better position to resist a lowball settlement offer or close your claim before reaching maximum medical improvement (MMI).
For example, those of you receiving Social Security Disability (SSDI or SSI), longshore, long-term disability, or workers compensation benefits (temporary total disability, temporary partial disability, or permanent partial disability) may have the ability to reject an inadequate motor vehicle accident settlement and hold out for fair compensation.
Auto insurers know which attorneys are able and willing to go to trial and which belong to personal injury settlement mills that churn files.
A settlement mill is a high-volume law practice that makes money by taking small claims and settling them quickly using an assembly-line approach. These firms take few cases to trial.
There are exceptions to the rule. But settlement mills are often characterized by aggressive advertising campaigns (television, radio, and billboard ads), minimal interaction between attorneys and clients, with most tasks handled by paralegals, and young attorneys with little courtroom experience.
You will likely receive a lower settlement offer if you hire a law firm that the insurer believes has no interest in going to trial.
Lost wages can occur due to the time missed to treat your injury or periods when you could not work. Indeed, some injuries can be so severe that you cannot return to work ever or at least not in the same capacity.
We recommend hiring an economist to calculate the value of fringe benefits you will lose because of your auto accident injuries.
For example, many employers contribute to the cost of health and medical insurance. And you will lose the value of these contributions if you cannot return to work because of the injuries. Therefore, a reasonable car crash settlement offer will include these losses.
Severe injuries (amputation, fracture, burn, traumatic brain injury) may cause you to lose the ability to earn the wages you made before the crash. Or to get promotions and raises you likely would have received.
You can seek money for your lost earning capacity through the settlement when this occurs. However, you will likely need to work with an economist and vocational expert to compare your expected lifetime earnings before and after the motor vehicle collision.
We recommend waiting until you have reached maximum medical improvement (MMI) to evaluate your injury claim for settlement.
You can determine what ongoing medical treatment may be necessary for your injuries.
Determining proposed treatment requires consultation with multiple experts, including doctors and life care planners. Though this is expensive, it is a necessary step in getting every possible dollar through a settlement.
Future treatment may include surgery, diagnostic imaging, physical therapy, prescription medication, rehabilitation, and in-home care.
Keep copies of all your medical bills related to the accident.
You will use the invoices and billings from your healthcare providers to establish past healthcare costs, which are medical expenses incurred from the date of the accident through the date of trial.
Of course, the insurance carrier may dispute that all the treatment was reasonable and necessary. Still, these bills are a starting point for negotiation and evaluation. And the jury will not find out that other sources, such as health insurance or workers compensation, paid for your medical treatment under the collateral source rule doctrine.
Often ignored, the court and location where you will try your case are important factors when negotiating an auto accident settlement.
Here are factors to consider when choosing the venue for trial:
Maybe they should not matter, but each person involved in your case’s appearance, behavior, attitude, and likeability matter. And a thorough auto accident settlement valuation should consider them.
The impression you give – and the defendant’s – can make or break your case.
In my experience, many corporate defendants testify poorly or make a poor impression because of arrogance. And this arrogance helps plaintiffs win product liability claims (crashworthiness, tire blowout, airbag failure, etc.).
The best way to determine each party or witness’s likability is through depositions.
A significant car accident settlement means nothing if you receive a small fraction of it due to fees, costs, and liens. The amount you will net is what matters.
If you settle your auto accident case, the insurance company will send a check payable to you and your attorney.
Your attorney will sign the settlement check (with your permission) and deposit it into an escrow account – specifically an Interest on Lawyer Trust Account (IOLTA).
There are specific rules on disbursing settlement funds from this account. Your lawyer will follow them to address any fees or liens against your case.
In most personal injury settlements, you net the amount left after paying attorney’s fees and expenses and medical liens.
Let’s examine these items.
Your attorney retainer agreement should detail the fees your lawyer will receive.
The attorney fees for our auto accident clients are 33 percent (one-third) of the total recovery if your case settles before we file the complaint (lawsuit). And the contingency fee is 40% of the gross recovery if we must file suit.
For example, your attorney’s fees would be $200,000.00 if you settle your car crash claim for $600,000.00 before trial.
In addition, your retainer agreement should detail the arrangement for legal expenses. These costs include fees for court reporters, deposition transcripts, medical questionnaires and disability letters, medical records, and expert witnesses to prove causation and other issues.
Generally, our firm fronts all of these litigation expenses. And we get reimbursed from the settlement or verdict (but do not recover what we paid if you lose your case).
Legal expenses in personal injury cases vary and largely depend on when in the process you settle.
For example, your legal costs will likely be under $1,000 if you settle before filing the lawsuit or retaining expert witnesses. Indeed, your expenses may be less than $100 if limited to obtaining health care records.
Even if you settle after the completion of discovery but before trial, your litigation costs should still be from $5,000 to $15,000.
In contrast, if your car accident case goes to trial, the legal costs could significantly exceed this number. For example, it is not unusual for costs to try an auto accident case requiring expert witnesses to range from $25,000 to $50,000 or more. Indeed, legal expenses in products liability and medical malpractice claims routinely exceed $100,000 if a trial is necessary.
The law gives some medical providers and health insurers lien and subrogation rights. And the ethics rules require your attorney to resolve any perfected liens before disbursing the amount in dispute.
Therefore, your attorney should try to negotiate a reduction in medical liens before disbursing that amount from your settlement funds.
Outstanding medical bills are easier to handle.
If the medical provider does not have a lien, you can direct your attorney to pay these bills from the settlement funds, or you may choose to keep the bills open and deal with them later if the provider tries to collect.
I recommend negotiating lower medical bills and liens before settling. Usually, this is the period where you have the most leverage because of the uncertainty of litigation. Indeed, the medical providers might be left with nothing if you take your case to trial and lose. And you can use this risk to persuade them to accept less so that you net more from your settlement.
There is no unique trick to maximizing your car accident claim. However, there are a lot of strategies that, cumulatively, can lead to a significantly higher car crash settlement. Here are ten strategies you should employ if you are injured in a car accident.
Do not ask about settlement soon after speaking with the claim adjuster.
Preferably, let the adjuster ask you about settling first.
Often accident victims call me after asking the claims adjuster to settle the case. One of the first things we do is make sure the adjuster knows we are starting fresh. We will not recommend a settlement until we investigate and evaluate all the facts first, even if there have been preliminary discussions between you and the adjuster.
We understand that money may be tight after a car wreck, especially if you miss time from work. But patience may be worth tens of thousands of dollars (or more).
Like most industries, the automobile insurance industry has consolidated. As a result, a small number of insurers now handle most motor accident claims.
Insurance companies want to guard their reputations, similar to attorneys. They are concerned that paying too many claims, especially those involving soft tissue injuries or minimal evidence, could generate similar claims. And more claims mean fewer profits.
While we understand this mindset, some insurance carriers take it too far and contest claims they should not, even with overwhelming proof of liability and damages. They fight cases on principle instead of the law and facts.
Why do some insurance carriers do this? Because it works. Insurance companies know that if an accident victim or attorney wants to avoid trial or lengthy litigation, they can settle the case for less than it is worth.
By researching the insurance company’s reputation in handling crash claims, you’ll know what to expect. You can prepare mentally to negotiate a top-dollar auto accident settlement.
Depending on the severity of your injuries, there may be an extensive amount of evidence to collect.
This includes:
Though most cases settle, you should treat yours as though it will go to trial. This helps you negotiate a higher settlement.
After gathering the evidence in your injury case, you should determine what expert witnesses are needed.
If your auto accident claim is based on negligence – and most are – you must show that the other side is at fault for your injuries. Often this is straightforward. But sometimes it’s not and you will need to hire an accident reconstruction expert or engineering expert to prove liability.
If the other side accepts liability, you may need to hire an expert witness to prove damages. For example, we sometimes use lifecare planners, economists, and physicians (including orthopedic surgeons and chiropractors) to prove damages.
We recommend hiring expert witnesses and getting reports before filing a lawsuit or discussing a settlement so you catch the insurer off-guard.
Determining your case’s weaknesses is also part of preparing it for negotiation or trial. It’s essential to know the risks of not accepting a settlement.
Ask ten attorneys whether you should negotiate with the insurance company before filing suit. And you will get ten different answers.
Generally, we recommend filing suit before negotiating. Especially if you suffered significant injuries and there is adequate insurance coverage available. This is because the claims adjuster you’re dealing with may not have the authority to make a substantial settlement offer and must escalate the claim to their supervisor.
But regardless of your strategy, remember to file the complaint before the two-year statute of limitations for personal injury actions in Virginia if you haven’t negotiated a settlement by then.
There is no bright-line rule for when a case should settle.
But one thing is sure. You should not settle until you have all the information necessary to evaluate your case.
As an attorney, this means I need to know my client’s:
Until I know this information and how it affects my client’s ability to work, I won’t recommend trying to settle the case.
Having negotiated hundreds of injury cases, I’ve seen other attorneys and parties use multiple approaches. Some are aggressive and combative, fighting you on every issue – no matter how small. Others understand that both parties are interested in settlement and avoiding trial, so they are more conciliatory and collaborative.
Generally, I am cooperative with opposing counsel during settlement negotiations. There are a few reasons for this.
First, most clients would rather settle their case sooner rather than later, as long as it’s for a fair amount. Most people don’t want to go through multiple depositions and court proceedings if they don’t have to.
Second, some studies show that settling a case and removing the stress of litigation can improve an accident victim’s physical and mental recovery. I have two goals in each case: (a) help my client recover financially and (b) help my client regain their health. A fair settlement can achieve both goals.
Third, though there is an oversupply of lawyers, the number who handle Virginia personal injury cases frequently is small. As a result, I go against the same handful of attorneys and insurance defense firms over and over. And if I’m unreasonable or unnecessarily difficult in one case, it may lead to unnecessary difficulty in future cases.
That said, there are cases where I take a combative approach during settlement negotiations.
If I think the defendants are trying to make my life and my client’s life difficult so that the client gives in and accepts a lowball offer, then I will not be as forgiving. This includes using many discovery devices.
However, as the injured person, your decision on what settlement approach to take is different. This may be the only personal injury case you ever have – and I hope it is. You don’t have to worry about your relationship with opposing counsel and the claims adjuster and how it will affect future cases.
Though this is true, I recommend a cooperative approach to start. You have a goal – to get as much money for your damages as possible. And personal attacks on the defense counsel and the insurance claims adjuster will not help you pocket more cash. Instead, the defendants will likely decide to use all the resources to fight your claim – no matter how small.
After you’ve determined what you think your auto accident claim is worth and how you want to approach negotiation, send a settlement demand letter to the insurance company. Do not just send a note that says I want X amount of dollars. Such a demand is not persuasive and is unlikely to receive an adequate response.
Your demand letter should include the following, at a minimum: a description of the car accident; a description of the police report describing why the other driver was at fault; the medical treatment you have received to date; your injuries; your ongoing limitations and symptoms; the medical treatment you may need to receive in the future; the time lost from work; how bad your vehicle and property was damaged; and, how the accident and injuries have affected you and your family.
If you have consulted with expert witnesses, you should also include a summary of what those witnesses will say.
After describing these items, you should tell the insurance company the amount of money you would accept as a settlement of your injuries and damages related to your auto accident.
The insurance company will not accept your initial demand. Or if it does, you probably did not ask for enough money. It will reply with an amount lower than what you’ve asked for. Because of this, you should ask for more than what you would accept. How much more is something you should discuss with an attorney familiar with the circumstances of your claim, the defendant driver’s insurance company, and the jurisdiction where you were injured.
Attach supportive evidence to your car accident demand letter. This includes corroborating medical evidence, a sheet outlining the wages you’ve lost, and the police report, at a minimum. While it can be tempting to hide evidence, everything will come out in discovery. So you’re better off making full and voluntary disclosure.
Unless it is exactly what you’re asking for, never take the first offer.
The insurance company expects you to negotiate. Therefore, their initial offer will likely be too low. Often the claims adjuster will lowball you as a tactic to see if you know how much your case is worth.
If the insurance company makes a first offer that is unreasonably low, do not respond by decreasing your demand right away. Instead, ask the adjuster to justify their proposal and give specific reasons for the amount.
Why is this important? Because you can then counter with a written letter that addresses each of their specific reasons and explains why the car insurance company is wrong.
Send this responsive letter before lowering your settlement demand and making any concessions. If the claims adjuster calls and asks for you to make a counter demand, tell them that you need a response to your letter first. You want the claims adjuster to adjust their offer before you may make any concession.
You should still ask for justification if the first offer is reasonable but not in your expected settlement range. In this scenario, it is ok to concede to a lower demand before receiving a response on why the initial offer was what it was. In my experience, most claims adjusters and insurance defense attorneys will respond if you do.
Insurance carriers use several tactics to control the pace of settlement negotiation. These include:
Once you understand that these are tactics – and nothing more – you can respond better.
You can also do things to control the pace of personal injury settlement negotiation. These strategies include:
Many minor injury cases can settle without an attorney. But if you sustained significant injuries, or the insurance company isn’t being fair, you may need to hire a lawyer. An experienced car accident attorney can help you get the compensation you deserve through skill, experience, persuasion, and by working with expert medical and vocational witnesses.
There is more to life than money.
But money is how society decides auto accident cases.
Your goal should be to recover as much as possible from your damages from the motor vehicle collision. And our firm can – and wants to – help you calculate and then recover a fair injury settlement.
Call now for a free consultation: 804-251-1620 or 757-810-5614. We help automobile accident victims in Virginia, Maryland, D.C., and throughout the country.
And read these articles for tips on negotiating auto accident settlements with specific insurers: