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AutoMate was developed to help those who have been in an auto accident navigate the claims process by providing a comprehensive step-by-step guide. AutoMate will equip you with essential information, useful tools and valuable resources which will empower you to confidently handle your auto claim and maximize your settlement.
AutoMate is independent, ad free, and is not affiliated with any insurance company. Using AutoMate can save you hours of time searching the internet for answers, and following just one tip could save you hundreds or even thousands of dollars!
This comprehensive guide will equip you with knowledge and resources which will empower you to confidently navigate every stage of the claims process and maximize your settlement.
Here you will find links to auto appraisers, resources to help you with a diminished value or total loss claim, help understanding CCC One reports, links to insurance commissioners and more.
Here you will find resources which will help you understand how diminished value, loss of use and other methods can be used to maximize your settlement and get what you deserve.
Learn how to choose the best insurance company for you, factors that affect your rates, how to read your auto policy, how an accident can affect your rates, insurance definitions, and more.
Learn what factors to consider when selecting a body shop for your car repairs. Locate reputable body shops near you to ensure your vehicle receives high-quality service.
Be informed about the laws governing auto claims in your state. Here you will find state-by-state references to the statute of limitations, diminished value, loss of use, total loss, the use of OEM parts, and more.
As soon as possible after the accident, document, gather, and preserve all information about your accident.
One of the first things to do after an accident is take photos and/or video of every car involved. If possible, take photos of the accident scene to document the type, condition and location of all cars after the collision. Some cameras can electronically date stamp the pictures which confirms the date, time, and location they were taken.
Keep in mind that photos do not always show the extent of the damage. For example, a dent in a bumper may not accurately reflect underlying damage to the frame. Not until the body shop inspects the car will the full extent of the damage be confirmed.
Here are some tips for taking quality photos.
Additional items to document include -
What not to document
Do not admit fault or say things that may suggest fault to the adverse driver or others as such statements could be used against you. The insurance company may use such statements to deny or reduce the value of your claim. While you may believe you are not at fault for the accident, you may not be aware of all the facts and circumstances that were at play. You should cooperate with the police, but you are not required to admit fault. State the facts as you know them. A fault will be decided after all the facts are gathered.
Social media can hurt your case. Here are some tips -
Police reports are a critical part of your claim for damages. The police may provide you an Exchange of Information form at the scene but the full police report may not be completed for a couple weeks. Police often do not respond to the scene of an accident unless traffic is being blocked or there are serious injuries. It’s helpful to report the collision to 911 so they can provide you with a report number. Even having a case number to confirm that you reported it to the police dispatcher is helpful as some drivers fail to report accidents to their insurance company. Without a police case number, you may have nothing to confirm that the accident even happened.
Note that police reports can be wrong. Verify all information for accuracy and inform the police agency or your attorney of errors.
In the event police are not involved, gather the following information from the other driver:
If you have a dash cam, you should upload the video to a memory stick for safekeeping. Obtain any video that may have been recorded by local businesses or homes. Many homes have doorbells or security systems that may have recorded the collision. In some instances, an attorney may be needed to obtain this information.
Keep all documents, evidence, photos, etc. in one secure place. All too often, important information is not well preserved and is lost.
Collect photos or documents that others may have. Family or friends may have taken photos of the cars or accident scene.
Memorialize all conversations with insurance adjusters and others who are involved.
If the accident happened in a company vehicle or while “on the clock”, work-related reports may need to be obtained.
Gather receipts for upgrades or add-ons to your car. For example, you purchased new tires and wheels or just installed a new engine. Receipts can substantiate your claim for the increased value of your car.
Photos that show the condition of your car just before the accident. This may help resolve questions about whether there was prior damage which could lessen the value of your claim.
Newspapers may have photos or articles about your accident.
Social media sites and other online sources may provide information about your accident. However, do not create potential problems by communicating with others on these sites as insurance companies also monitor these, and what you say may be used against you.
You may want to keep a hard copy of documents, reports, and photos in a file as well as a separate electronic copy.
In addition to keeping photos and video on your phone/camera, back them up on a separate memory device. This can then be given to someone else if requested without risking losing your only copy.
If you can date stamp, label, and provide descriptions of photos, it will preserve the facts for future reference. If it’s not obvious, a short description of a picture will help you recall the significance of that picture.
When you file a claim, insurance companies are legally required to respond within 30 days. Each state has a time limitation for which you can make a claim. This is called the statute of limitations.
The typical auto collision involves two vehicles. Assuming both parties have insurance, the question often arises as to whether it is better to handle your claim using your own company or the at-fault driver’s company. There are pros and cons to both so there is no clear answer to all situations. However, there are a few things to remember which may help you make that decision.
Filing a claim with your own company. Making an auto claim with your own company can be advantageous because they have a contractual obligation to you, and as their customer, you may receive better service. However, just because they are your own company, or that you’ve been with them for many years is no guarantee that you’re going to receive quality service. The cons of going through your own company are that you will likely have a deductible to pay and that you will be bound by contractual limits, such as whether you have roadside assistance or the length of rental car coverage.
Filing a claim with the at-fault company. Working with the at-fault driver insurance company has its pros and cons. The benefits may be that there are fewer restrictions on rental car use and no deductibles to worry about. The cons are that it is an adversarial relationship and working with the adjusters may be more difficult. In some situations, the at-fault insurance company may not be willing to assist you until they can complete their investigation, thus your only option may be to use your own company to get things moving along.
Working with insurance companies and their adjusters can be a challenging experience. For the insurance adjuster, resolving an auto claim involves the coordination of multiple and sometimes competing components which can include; the auto damage estimator, the body shop, the rental car company, and of course, the claimant.
Insurance companies have different approaches and methodologies to handling claims. You may encounter multiple adjusters responsible for different aspects of your claim, such as property damage, and medical or personal injury.
There are various types of insurance claims adjusters. These include:
Company Adjusters: Employed by the insurance company, they handle claims internally.
Independent Adjusters: Independent contractors hired by the insurance company on a case-by-case basis to assess and negotiate claims.
Public Adjusters: Work on behalf of policyholders, advocating for their interests during the claims process. They are typically hired by individuals seeking to maximize their settlement.
Insurance companies have years of experience working in this complex environment whereas you are at a disadvantage because you are likely unfamiliar with the process and your rights. It's essential to be well-prepared and knowledgeable about the process to level the playing field. Here are some tips for working with adjusters.
Claims adjusters are not your enemy and should not be treated as such, but in the effort to resolve your auto claim, their responsibility is to their employer, not you. Whether the adjuster is courteous or rude, inexperienced or a seasoned veteran, their objective is the same; to settle your claim as quickly and cheaply as possible.
Most adjusters have a high caseload and their employer keeps track of their performance metrics. Their salary and promotions may be based on how they resolve claims. When beginning your insurance claim and contacting the adjuster for the first time, let the adjuster know that you will provide a positive survey if they handle your claim well. This may be enough motivation for them to pay special attention to your claim.
Anything you say to the insurance adjuster can be used against you, and the adjuster is trained to probe for things that can be harmful to your case. Telling an adjuster of your financial or other difficulties can signal that you’ll settle for less out of desperation.
Before talking with the adjuster, gather all relevant documents such as police reports, medical records, repair estimates, and any evidence of damages or losses. Being organized demonstrates you are serious and helps you present your case. The adjuster may request your recorded statement and ask you to sign a release to access your medical records. You are not legally required to give a statement or sign the insurance company’s medical release form.
Use clear, concise language when discussing your claim. Stick to the facts and avoid unnecessary details or emotional narratives. Maintain a polite and professional tone in all your interactions and avoid emotional or confrontational language.
Always provide factual and consistent information about the event that caused the damage to your vehicle. Exaggerating or misrepresenting facts can jeopardize your claim.
Familiarize yourself with the terms and coverage limits of your insurance policy. How much is your deductible? If you know what is covered and what is not, it can help you negotiate much more effectively.
Don’t rush into a settlement. First offers are often starting points for negotiation. If you feel the offer is too low, it’s acceptable to make a counteroffer. Justify why you believe your claim is worth more.
Be empathetic and try to understand the adjuster’s position while also expressing how the situation has impacted you. This can create a more cooperative environment. Being argumentative only damages your position.
Keep records of all communications, including dates, times, and summaries of conversations. Written correspondence, estimates, and adjuster reports are valuable in maintaining a record of the negotiation process.
If your adjuster does not respond to your demands, is being adversarial, or if negotiations are not progressing, escalating the issue to their supervisor, or manager may help move your claim along.
A complaint to your state’s Department of Insurance alleging an unfair claims practice may also provide sufficient motivation to change their offer. This is why you must have everything documented to build a strong case against the insurance company. Some states even publish how many complaints insurance companies receive, which is another metric the insurance companies want to avoid increasing.
Post to the insurance company’s social media accounts. Some claimants were able to have their issues resolved quickly by contacting their insurance company via social media. Many companies have a policy to respond to these messages if they can identify you.
Filing a suit through small claims court for monetary damages is a powerful tactic that can make the insurance company quickly change its mind regarding your demands. Small claims courts do not require an attorney and filing fees can be minimal. Claim limits vary depending on your state. This may be the only way to receive satisfactory compensation in cases involving diminished value.
Insurance negotiations can be lengthy and frustrating. Staying calm and patient can help maintain a constructive dialogue and prevent unnecessary conflicts.
If the negotiation becomes complex or at an impasse, consider hiring a professional appraiser, an attorney, or a professional claims adjuster. They can provide expert guidance and representation.
Be clear about how the settlement will be paid, and any actions you need to take, and make sure the final agreement is in writing.
In many cases, the initial offer from the adjuster may not meet your expectations. Don’t settle too quickly. Rushing into a settlement can be detrimental. Negotiations can be emotionally charged so remain calm and patient and avoid becoming confrontational. A composed approach can lead to more productive negotiations. Take your time to evaluate offers and consider seeking professional advice if needed. Follow these tips to make your negotiations effective:
Remember, negotiation is a process, and effective communication is key. Being prepared, patient, and professional can significantly impact the outcome of your insurance claim negotiation. Dealing with insurance adjusters requires a balance of assertiveness, knowledge, and effective communication.
When a collision occurs, it’s important to have the police involved because it’s necessary to establish fault. At the scene, the other driver may have admitted fault to you, but when they get home and think about it, they may change their mind and tell their insurance company that you were responsible for the collision. The other driver may also provide false personal and insurance information which leaves you with no recourse other than to go through your own insurance company. Hit-and-run accidents are difficult to prove and making a claim against your uninsured motorist policy may be problematic without a police report.
Insurance companies need proof of fault before they will provide any assistance or pay for repairs. Insurance adjusters will obtain the police report and will use it in their investigation. Having an accurate police report can be essential in making a claim for damages.
Police respond to accidents depending on many factors including jurisdiction, distance to the scene, available resources, whether there are injuries or not, and whether or not the accident is blocking traffic. Usually, police will also not respond to accidents that occur on private property such as parking lots.
Each law enforcement agency has its procedures and forms for creating collision reports. Often the responding agency will give you an Exchange of Information at the scene which provides each party with basic information about the other driver and their insurance company. Note that police reports can contain errors so review them carefully and notify the reporting agency of any errors. The full police report will not be available until they have finished their investigation which could take several days to weeks. Most police reports are now available online for a small fee.
Police who respond to a collision will call for a tow truck if one or more of the cars cannot be safely driven. Police have a list of approved towing companies and if done properly, the dispatcher will rotate through the list to determine who will get the job. If you know someone who can tow your car from the scene and the police officer approves, you have this option if they can respond quickly and safely.
If your car is clearly a total loss, it will likely be taken to a tow yard. If it is unclear whether your car is repairable or totaled, it will be taken to the tow yard unless otherwise directed by you. Your car will stay there until you or the insurance company tells the towing service where to take it.
Tip - If you are able, tell the tow truck driver to take your car directly from the scene to the repair shop. This eliminates the trip to the tow yard, and then to the body shop, which saves an extra tow, storage, and other fees.
How much the tow company can charge varies but they can charge an hourly charge, an administrative fee, and daily storage fees.
Towing costs are determined by:
What they pay -
The insurance company for the at-fault driver is usually responsible for all towing and storage costs associated with the accident once liability is accepted. Storage fees should be paid until the insurance company decides to repair or total the car. At that time, the insurance company will move it to the repair shop, their storage area, or salvage yard if totaled. You should be contacted before your car is moved from the storage area.
What you pay -
You have a responsibility to “mitigate damages” – which means, to reduce the amount that the insurance company will have to pay if it is within your control. For example, if you leave the car in a storage lot for two weeks before you notify the insurance company, or if you take several days to decide whether to accept their total loss offer, you may have to pay those additional storage fees. If you cause delays or refuse to act, you could be stuck with unnecessary storage charges. If you want to keep the car, you are responsible for towing it to the location of your choice.
To minimize storage fees, contact the at-fault insurance company and make a claim so they will be responsible for any further fees. You may also want to contact your company if the at-fault company refuses to accept liability.
If your car is declared a total loss, give the repair shop or towing service authorization to release your car, so they can move it to a secure storage facility. This can help you avoid paying daily storage fees that companies might charge.
If there’s a possibility that your car is totaled, you should gather all personal items and valuable documents from your car as soon as possible. If it’s taken to the tow yard, then the insurance company gives the tow company permission to transport it to a salvage yard, you may not have the opportunity to remove your valuables from the car.
Generally tow yards restrict who has access to the cars. You may not be able to get items out of it without their permission and/or paying all tow and storage fees upfront.
If you can’t afford to pay the towing fees, the towing company is legally not allowed to release the vehicle to you.
Tow companies usually have limits on how long they will store your car. After several months, unclaimed cars with outstanding towing and storage fees may be impounded and auctioned off.
Generally, insurance companies cannot deduct towing and storage fees from your total loss settlement, but this policy may vary from state to state. If the insurance adjuster tried to deduct storage and towing fees from your total loss settlement, contact your insurance agent, customer service representative, or state insurance commissioner.
To ensure you have a solid claim and to minimize towing and other fees, remember to:
Arranging for a rental car through the at-fault driver's insurance company can present challenges, but understanding the procedures and pitfalls can empower you in rental negotiations.
First, liability must be determined following your accident. Who was at fault for the accident is the driving factor for determining who will pay for your rental car. This investigation could take as little as a few hours or up to 30 days.
You have at least three options when it comes to getting a rental car.
If you suspect your car is a total loss, be proactive and look for a replacement car. Suppose your vehicle is declared a total loss. In that case, the insurance adjuster will make an offer for your car based on their valuation and will give you a deadline, typically a few days, to accept their offer and return the rental car. If you dispute their offer, they may refuse to cover any further rental expenses.
You have the right to have a comparable rental car to the one you were driving at the time of the accident. If you were driving a minivan, you are entitled to a minivan. The problem arises as such vehicles are not always available. This can be especially important if you were driving a work vehicle such as a pick-up truck at the time of the accident. If your vehicle was used for employment and you cannot get a comparable replacement, keep track of all expenses, and wage loss, and present that to the at-fault adjuster for reimbursement.
Loss of Use is the inability to use your car due to damage caused by the negligence of another. A loss of use claim is essentially meant to cover the cost of a comparable rental car or other alternative transportation like cabs or ride-share services that you used when your car was not available. For example, the cost to rent a Tesla, Ferrari, Bentley, or Porsche can cost $350.00 to $500.00 per day. Sometimes car repairs take sixty or more days. A Loss of Use claim could add up!
Steps to make a Loss of Use claim:
If the insurance carrier denies your loss of use claim, ask them to put their denial in writing including their reasons and case law supporting their position. Here is a state-by-state guide to Loss-of-use claims
Rental agencies will often ask if you want to purchase additional insurance. You don’t want to pay for coverage that you may already have through your own policy so contact your agent to get the best answer for your situation.
Problems may arise if you are under the age of 26 as most rental agencies will not rent you a car. You also may be denied a rental car if you don’t have a valid driver’s license or credit card or can make a deposit.
Your only options may include using ride-share services like Uber or borrowing a car from someone else. Keep good records of all expenses and present them to the at-fault company for reimbursement.
When looking for a body shop to repair your car, many people assume they must have their car repaired at the shop the insurance company recommends. By law, insurance companies are not allowed to force you to go to a Direct Repair Program (DRP) body shop. A DRP is a network of approved repair facilities and body shops that meet a set of standards or guidelines set by the insurance company. While insurance companies may suggest a particular body shop as part of their DRP, consumers have the right to choose where they take their vehicle for repairs.
The benefit of working with a DRP shop is, that you might save time and have the workmanship guaranteed. On the flip side, your insurer’s preferred body shop might use aftermarket parts or other methods to save on costs. Being a Direct Repair Program (DRP) shop should not disqualify them from repairing your car but there are other ways to identify a quality shop.
To identify a quality body shop, consider the following tips from experts and professionals in the industry:
By considering these factors, you can make an informed decision and choose a body shop that provides high-quality and reliable service for your car.
If your vehicle is declared a total loss, determining its actual cash value (ACV) becomes critical to getting a fair settlement. What are the processes insurers employ to assess total loss valuations, common pitfalls in their methodologies, and the options available to car owners facing valuation disputes?
States set different total loss thresholds, which is the point at which insurance companies are required to declare a car a total loss. Some states use a total loss formula while others use a percentage (typically 70-75%) of its pre-accident ACV rendering it economically impractical to repair. The state where you live affects which method the insurer will use. See here for total loss thresholds in all 50 states.
If your car is a total loss, you have the right to be reimbursed for the ACV of your car, plus applicable sales tax, cost of tag transfer, and prorated annual tax and/or registration fees. Factors influencing your car’s ACV include make, model, age, mileage, condition, and salvage potential.
If your car has add-ons, new parts, or repairs such as a new transmission, these will only marginally increase the value of your car. If you make a claim for these items, be prepared to supply receipts to the adjuster to justify your position. You may be allowed to replace new tires and wheels with older ones if time permits but be aware it may affect the settlement offer.
In valuing a totaled vehicle, insurers often utilize external vendors like CCC Total Loss Report to provide a figure on which to base their settlement. Comparable vehicle sales or auction results serve as a primary benchmark, but issues arise when insurers utilize inaccurate comparable vehicles that lead to skewed results. Some may use outdated and discredited formulas such as 17c.
Insurance adjusters or their vendors may get incorrect results by using “comparables” with higher mileage, limiting the geographical search area, or disregarding specialty vehicles' unique value. Adjusters may also have the discretion of choosing which “comparables” to use and can make adjustments to the factors that determine your vehicle’s value. Such practices can result in inaccurate representations of a car's pre-accident value.
Options for Car Owners
Diminished Value (DV) refers to the reduction in the value of a car after collision repairs. This decrease in value is due to a vehicle's accident history negatively impacting its desirability in the used car market. Naturally, consumers prefer buying used cars that weren’t previously wrecked. Regardless of how well the repairs were done, used car buyers would rather purchase an automobile with no accident history, thereby making the previously repaired vehicle worth less than its undamaged counterpart.
Most states have laws that require the seller to disclose known defects in the car such as a previous accident history. A Carfax history report is regularly used to fully disclose such defects. The car can no longer be sold as a “certified pre-owned vehicle” because of the damage from the collision. This diminishes the car’s resale value and is a monetary loss to the seller.
Diminished value claims are only applicable to repaired cars and not totaled cars. DV claims are typically filed against the insurance company of the party at fault. Cars that had structural damage or air bag deployment can’t be certified and banks will not finance them. The majority of dealers can’t retail these vehicles and usually send them straight to auction.
Inherent Diminished Value vs. Parts and Repair-Related Diminished Value
Inherent Diminished Value means the vehicle is worth less due to its accident history, regardless of proper repairs. Public perception, not physical inspection, determines this value reduction in the marketplace. When making a DV claim using an appraiser, an in-person inspection is not needed.
Parts and Repair-Related DV is when the reduced value is due to inferior parts or poor workmanship. This type of DV requires a physical inspection to identify deficiencies.
The Diminished Value Claim Process
Insurance companies do not willingly pay diminished value claims or make this known to the public. It is not the responsibility of the insurance company to inform and educate you on DV and how it works. If you don’t ask for it, they will not offer it. It is crucial for car owners to be proactive in pursuing compensation for the diminished value of their repaired vehicles. Each state has its own laws governing DV. You can find here a summary of how first-party and third-party inherent diminished value claims are treated in all 50 states. Here is another list of Diminished Value Claims By State.
The steps for making a DV claim include:
Harber Appraisal (253 474-0967) Website
Petty Details (214 227-2154) Website
VECO Experts (888 362-2511) Website
In making a claim against the insurance company, you can utilize any one of the three options below or escalate and use all three as needed.
Tips for Successful Claims
Stay objective: Maintain a composed and professional demeanor when interacting with insurance representatives. Assertively insist on a fair settlement.
Document Your Claim: Collect evidence supporting diminished value, including an appraisal from a licensed independent appraiser.
Escalate When Necessary: If initial discussions with the adjuster prove unproductive, escalate the matter to higher levels within the insurance company.
Report and Legal Action: Report unfair practices to the state insurance commissioner and consider legal action if necessary. There have been class action lawsuits for diminished value that provide legal support for your DV claim, and there may be ongoing class action suits against various insurance companies that you can join.
Be prepared to take them to court: Courts have awarded the claimant’s appraiser, expert witness, and attorney fees to be paid by the insurance companies in addition to the amount of diminished value. Hiring an attorney with experience in diminished value cases and going armed with a comprehensive appraisal are important and can make the difference between winning and losing the case. Small claim court thresholds differ from state to state. Attorneys generally cannot attend small claims court cases. Make sure your attorney advises you whether your small claims action for property damage claim will affect your personal injury claim.
Understanding Diminished Value Calculation Methods
Dealership Letter: A letter from a dealership may be cost-effective but is often challenged by insurance companies as lacking objectivity.
Algorithm-Based Reports: Formulas like Rule 17-C, though subjective, are commonly used, despite criticism for oversimplification.
Auction Results and Carfax Ads: Reliance on auction results and Carfax ads may lack specificity, making them less reliable for accurate value assessments.
Professional Appraiser's Report: Comprehensive reports prepared by professional appraisers provide a detailed and accurate assessment. Even appraisers use different methods. Cookie-cutter formulas may not provide the most accurate DV figure. Ask if your appraiser follows or belongs to organizations such as the Uniform Standards of Professional Appraisal Practice (USPAP) which is the generally recognized ethical and performance standards for the appraisal profession.
Why Insurance Adjusters Deny Diminished Value Claims
Many inexperienced insurance adjusters follow their company's training without considering the unique circumstances of each claim. Despite convincing evidence, they often rely on common excuses to deny diminished value claims. Here are some typical arguments used by insurance companies and why they lack validity:
Understanding the diminished value, its calculation methods, and the claim process is vital for car owners seeking fair compensation. Whether pursuing an inherent diminished value claim or addressing issues related to repairs, thorough documentation and expert assessments are key to successful claims.
An appraisal clause is a provision commonly found in insurance policies, though not universally included. It is applicable when disputes arise between the policyholder and their own insurance carrier and serves as a mechanism for reaching a resolution when there is a dispute in evaluating the amount of a claim. Either party involved can initiate the appraisal clause. Typically found in the "Damage to Your Auto" section of the policy, it becomes relevant in cases where disagreements arise over the repair costs or diminished value of a vehicle, especially in states allowing first-party claims for diminished value.
Steps to Invoke the Appraisal Clause
Selection of Appraisers
Dispute Resolution
Experiencing a total loss is challenging, but informed decision-making can empower car owners to navigate the insurance claims process effectively. Understanding valuation methods, knowing your rights, and being prepared to negotiate are essential to achieving a fair settlement.
What’s Included in Your Auto Claim?
Which Company Should You Work With?
Avoid Common Mistakes in Settlement Negotiations
In this article and on other areas of this site, the main focus is on handling and resolving your auto claim. If you have suffered personal injuries, seek advice from a legal professional who is familiar with the laws in your area.
Settling an auto claim can be very stressful because you are likely unfamiliar with how to negotiate and settle a claim, whereas the insurance adjuster does this every day. This article is intended to help you effectively negotiate a fair settlement and familiarize you with the settlement process.
Step 1: Identify the Responsible Party
Determining who is at fault is necessary for a successful claim. It will help determine which insurance company you will work with. Depending on the situation, multiple parties may share responsibility.
Step 2: File a Claim
Whether represented by an attorney or handling the claim yourself, putting the at-fault insurer on notice is essential. This initiates the claims process, and the insurance company assigns a claims adjuster to manage the case.
Step 3: Gather Supporting Evidence
Building a strong case begins by collecting evidence at the scene. This includes police reports, pictures, videos, and eyewitness statements. For complex cases, involving a personal injury lawyer may be necessary to obtain evidence through subpoenas and court orders.
Step 4: Make a Compensation Demand
Prepare a demand packet, including a detailed demand letter and supporting documents, and send it to the insurance company.
Step 5: Negotiate the Settlement
Expect the initial offer from the adjuster to be low. Be prepared to negotiate, maintaining a firm stance on the validity of your claim. The negotiation process involves offers and counteroffers until both parties reach an agreeable settlement amount.
Step 6: Sign the Settlement Agreement/Release
Before signing the settlement agreement, confirm that it aligns with the negotiated terms. Be aware of potential liens on the settlement offer, review the release carefully, and consider consulting an attorney if needed.
In cases where negotiations fail, alternative options like arbitration or small claims court may be pursued. Be aware of the statute of limitations, as missing the deadline forfeits your right to compensation. Seeking legal advice becomes crucial when settlement negotiations face challenges.
Assuming you have insurance coverage, you have the option of working with your own company or the at-fault driver’s insurance company. There are pros and cons to both.
Working with your own company may offer you quicker and better service. They have a contractual relationship with you which may simplify the process but in return, you will have a deductible to pay and be bound by your policy limits.
If the other driver is at fault for the accident but doesn't have insurance or not enough insurance, your insurance company may cover the damages, after the deductible, if you have uninsured/underinsured motorist coverage. It also pays for hit-and-run accidents if the other driver drove away and you didn’t get their information. Collision coverage will pay to repair or replace your car in an accident, no matter who was at fault.
Your insurance company will try to recover what they paid you (subrogation) from the other driver’s insurance. If they are successful, you may be reimbursed for the deductible you paid. This may take the process of negotiating a settlement out of your hands and make it your insurance company’s job.
Working with the at-fault driver’s company has some pros and cons as well. The at-fault driver may have better coverage than your own policy. They may have much better rental car benefits than what your own policy offers and no deductible to pay. The downside is that they will not offer any assistance until they have confirmed they are liable. In some cases, such as when they cannot contact their insured, it may take weeks before they will offer any assistance.
If the damages exceed the at-fault party insurance coverage limits, you will be on the hook for additional costs unless you have your own collision coverage. For example, your car costs $15,000 to repair but the at-fault driver only has $10,000 in property damage coverage. If you have collision coverage on your own policy, it may pay the balance. Check with your agent to confirm your own policy provisions.
Adjusters have authority limits. If the adjuster tells you he can’t settle for what you asked, maybe it means he just hasn’t been given the authority. Tell him to have his supervisor review it and get additional settlement authority if necessary. You both have the same objective, which is to settle your claim; it’s the amount that needs to be agreed upon.
It's crucial to gather sufficient evidence and documentation to substantiate your position on your car accident claim for success. Without doing the research you may not know the true cash value of your car. In the last few years and in several regions of the country, some used vehicles have retained and even increased in value.
Emotional attachment or sentimental value does not translate into economic value. The fact that your grandmother gave you her car before she passed away may be important to you but that has no value to others on the open market.
Do your homework by obtaining your own comparable cars to counter their offer. Find two or three comparable cars in your area. Expand your search if necessary. Choose the highest 2 or 3 cars and use them in negotiations. You may want to average out the highest of them to produce one figure.
If the adjuster has used an outside vendor such as Certified Collateral Corporation (CCC) to determine the value of your car, ask for a copy of the report. Review it to ensure they are using the correct make, model, year, mileage, trim level, etc. as your car. Go through it line by line and correct it to ensure accuracy. The adjuster may have no objection to such corrections which can increase the value of their offer so long as they can justify it. Some cars are unique or rare and have extra market value. The adjuster may not be aware of its’ unique nature and may make an offer thinking it is a typical car.
Use online tools: Take advantage of online tools to get the ballpark value of your vehicle and print out the results. Carmax.com, edmunds.com, and other sites have online car estimators.
If you are claiming upgrades such as new tires, or you had a new transmission installed just before the accident, be prepared to provide supporting receipts and documents. The adjuster may not have any problem with paying more but they will need evidence to justify the additional money. The bad news is it’s likely you will receive pennies on the dollar. If you are able, you may want to replace these new tires with old ones if you have access to the car.
Hire an attorney or get a professional appraiser to help with your loss of use or diminished value claim. Adjusters are trained to reject claims that don’t have sufficient evidence to support your position or those that have incomplete or questionable sources. Getting a professional involved may improve your chances due to increased credibility. A list of approved appraisers can be found here.
Claims adjusters are trained to minimize payouts and are experienced negotiators. Here are some mistakes to avoid when negotiating your settlement.
Mistake 1: Resist settling for the initial offer. Ask the adjuster to justify their offer. Accepting the first offer from the adjuster, even if you think it’s a good one, maybe undervaluing your car.
Mistake 2: Trusting the Insurance Adjuster
The adjuster is not your ally. Insurance claims adjusters employ techniques to relax claimants and extract potentially damaging information. Maintain a cautious demeanor, remaining polite but firm.
Mistake 3: Speaking Without Thinking
Exercise caution during conversations with the adjuster. Refrain from making admissions that may damage your case, such as apologizing for the accident or disclosing potential distractions. Stick to essential facts to prevent inadvertently compromising your claim.
Mistake 4: Overlooking Important Evidence
Compile strong evidence to establish the other driver's liability. This includes the police report and documentation of lost wages and out-of-pocket expenses.
Mistake 5: Revealing Family Issues
Guard against divulging personal information like divorce proceedings or financial difficulties as it will suggest a sense of urgency or financial need to settle quickly.
Mistake 6: Negotiating Against Yourself
During negotiations, avoid attempting to negotiate upward from the adjuster's last offer. Counter low offers judiciously and be patient if the adjuster takes time to respond.
Mistake 7: Jumping the Gun
Exercise patience during negotiations and avoid appearing desperate. Refrain from rushing to accept or counter offers immediately.
Mistake 8: Losing Your Temper
Maintain your composure, even when working with adversarial adjusters. A calm demeanor strengthens your negotiating position and reflects positively if the case goes to court.
Mistake 9: Refusing to Compromise
Recognize the need for compromise in negotiations. Recognize your bottom line but be prepared to consult a lawyer, auto appraiser, or other professional if a fair agreement seems unattainable.
Mistake 10: Signing Agreements You Don’t Understand
Thoroughly review settlement agreements, ensuring they align with your negotiated terms. Avoid signing without full comprehension, as these agreements are legally binding.
The vast majority of car accident cases between the injured party and an insurance company settle out of court. Once the case is settled you will be asked to sign a release form or settlement agreement form.
You can settle your auto claim and it should not affect your ability to separately bring a personal injury claim. Just make clear to the adjuster that the settlement is for your auto claim only and not for your personal injury claim if you have one. Then read and clarify if necessary, the settlement agreement and release to ensure you are not releasing any personal injury claim. You may want to consult an attorney in your area.
There are two types of releases:
1) General release.
2) Limited liability release.
A general release releases the responsible party (including your own insurance company) and their insurance company from any further liability related to the accident.
A limited liability release will keep your options open to pursue other insurance available, including your own uninsured motorist coverage.
The agreement should include the following information to make it valid:
A settlement agreement becomes enforceable upon signing by both parties. You do not have to immediately settle your case if there’s an impasse or you need to think about it. Keep in mind the statute of limitations, which is the time limit within which you must file a lawsuit or forfeit your claim.
If you own the car the insurance adjuster will send you a release. Once they receive the signed release and the other needed documents and title, they will send you the check for the agreed amount.
If your car is financed, they will work with the lender to pay off the loan and pay you the rest. If your car is leased, they will deal with the leasing company.
If you are underwater in the car, check to see if you have GAP insurance which will pay the difference so you are not out of pocket any money.
Once the insurance company makes its highest offer, it is up to you to accept or reject it. Here are a few things to consider before you sign that release or file a small claims action.
Small claims court serves as an option for individuals seeking relatively modest amounts of money when settlement attempts have failed. Tailored for those who prefer a self-representation approach, these courts have monetary limits.
Filing a lawsuit may become a necessary step if negotiations with the at-fault driver's insurer stall, and the statute of limitations is imminent. Although you shouldn’t relinquish your right to compensation without a fight, you should consider the cost of your time and money versus the financial benefits of pursuing a small claims suit. You also need to factor in the probability of winning your case, and then actually collect money from the defendant if you win.
It is also critical to understand that if you file a lawsuit in small claims court for your car, you may be barred from making any other claims for that accident, including one for personal injury. You may have several claims against many defendants but only one lawsuit per accident and that would eliminate any further claims against all other defendants.
There are several advantages to settling a claim directly with the adjuster.
To initiate your lawsuit, you need to file an official complaint form with the court, pay a filing fee, and adhere to specific procedures. The filing location depends on the defendant's residence or where the auto accident occurred.
The petition form typically includes essential details such as both parties’ information, accident specifics, and the compensation amount sought. Attention to accuracy is vital to avoid delays or dismissal, as errors in names, addresses, or dates can lead to legal complications.
After filing, the defendant must be formally served with court documents, a process usually handled by the court clerk or a designated official. Serving through certified mail or a local sheriff may incur additional fees but can prompt a settlement due to the defendant's reaction.
The defendant must respond within the legal time limit. Potential scenarios include payment, filing a counterclaim, or non-response, leading to a default judgment. The court notifies both parties of the verdict, typically within two weeks.
Presenting Your Case in Court:
As the plaintiff, make a concise opening statement, present evidence chronologically, and offer copies to the judge and defendant. Practice courtroom etiquette by addressing the judge respectfully and maintaining professionalism.
After both sides are present, you may deliver a closing statement, emphasizing key points and addressing any counterclaims made by the defendant. Verdicts may not be immediate, and written notifications follow within a few weeks.
Even if you win, you may have a difficult time collecting the money as the defendant has to write the check. This may also require getting officials involved to collect the funds.
Yes. You are allowed to have your car repaired by the shop of your choice.
Yes, you have the right to request your insurance company use original equipment manufactured parts rather than aftermarket parts to repair your vehicle. If the insurance company deems these costs unreasonable, you may have to pay the extra cost.
That depends on your situation. If going through the at-fault driver’s insurance company they will need to finish their investigation before accepting liability. You may get better and quicker service going through your own company but you will have a deductible to pay and policy limitations on items such as rental car coverage.
If you have Uninsured Motorist (UM) property damage coverage on your policy, your insurance company will cover the costs of the repairs of your car or replacement if totaled. You will be responsible for the deductible.
Agreeing to pay each other out of pocket and not involve insurance could open you up to major issues later on if it turns out there was more damage than it seemed at the time, or if either of you realize later that you’re injured. But if there was no one else involved in the incident and the cost of the damage is close to your deductible amount, it may not be worth filing a claim. That's because insurance companies check your claims history in order to set rates, and drivers with more claims pay more for insurance.
The information provided by AutoMate on this site is for general information and is not intended as legal advice for your specific situation. AutoMate makes every attempt to give accurate information regarding local laws, however, laws change periodically and your state laws may vary. Consult an attorney in your state if you have questions about your specific situation.
