Insurance Settlements: A Consumer’s Guide
If you are involved in an accident that was not your fault where you were injured, chances are you will find yourself in a situation where you are faced with negotiating with an insurance company for a settlement.
There are many important rules that the process of insurance settlements follow, but many of them are unwritten. As a consumer, the first thing you need to remember when dealing with an insurance company is that, no matter how nice the individuals you are working with may seem to be, their goal is to deny your settlement or at best reduce it to the smallest possible negotiable amount.
Now that we’re clear on where you as a consumer stand in an insurance settlement situation, let’s discuss a bit about how insurance settlement works.
Using the auto accident example, let’s assume that you were on your way to work last week when the light turned red, you stopped, but the teenage driver behind you did not. Your car is hit from behind with considerable force, bending in your bumper, popping up your trunk, and causing your airbag to explode, The paramedics and police come to the scene, write a report, treat you for minor injuries, and as you watch your car being towed away, the ambulance takes you to the emergency room for further observation.
You have just entered a situation where you will be pursuing an insurance settlement that should cover not only the cost of repairing your car, paying the medical bills incurred at the emergency room, and any future medical costs you may have from your injuries. Your settlement also should consider any lost time from work required for medical appointments or car repairs, any costs for the "diminished value" of your vehicle after the accident, the cost of a rental car, and additional money for your pain and suffering.
While this may all sound quite complicated, it’s really not. Insurance companies use sophisticated formulas to determine what your insurance settlement, if any, will be. It’s important to know that you do not have to accept the first insurance settlement that is offered to you, and negotiation is an important art to master. A general formula for the above auto accident might include: cost to fix the bumper and trunk: $1,000, cost for rental car while car is in the shop: $120, towing charge: $80, medical bills: $800, lost time from work: $500 plus "pain and suffering", which will be an incredibly variable thing.
Remember, not every accident is a ticket to easy street. Insurance settlements are all about finding the lowest fair price to compensate you for your injuries and make your property (your car) whole again. The tricky parts include negotiation of the settlement amount, documentation and, in some instances, a court visit or two. Clearly, for all of the reasons given, it’s important to involve an attorney whenever you are negotiating for an insurance settlement.