How Do Insurance Companies Negotiate Settlements?

7 June, 2023 | By Redemption Law
How Do Insurance Companies Negotiate Settlements?

If an accident injured you, you may face a long road to recovery. Perhaps your injuries require extensive medical treatment. You may have significant medical bills and cannot work or earn income due to your injuries. Whether a car accident, trucking accident, or slip and fall injured you, you may struggle with feelings of helplessness and anger and may worry about how you will make ends meet. 

A settlement offer from an insurance company may provide relief. However, you may know the reputation insurance companies have for short-changing accident victims by not compensating them for all their damages. You may have heard about negotiating with an insurance company for a fairer settlement but don’t know how the process works.

Lawyers who work with accident victims have experience negotiating with insurance companies, and victims who retain legal representation are more likely to receive higher settlements than those who deal with insurance companies on their own.

Here’s an overview of how insurance companies negotiate settlements and how a personal injury lawyer can get the maximum compensation in your case.

The Initial Offer

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In most cases, the insurance company will reach out to you soon after an accident with an offer to settle your accident claim. When you’re struggling under the pain of your accident and the weight of your medical bills, this quick offer may look like a godsend and that’s what the insurance company banks on. They hope you snap up that offer without taking time to consider the full extent of the damages the accident caused you and how it will affect your life in the long run.

The insurance company comes up with this settlement offer based on an investigation into your accident and its own calculations of your damages, which rarely take into account all your losses. 

The Investigation

Your insurance company will investigate the accident that injured you and the injuries you claimed. This process generally reviews all evidence related to your injury, including who caused the accident and how much liability the policyholder insured by the company holds.

The adjuster may consider the police report, video footage of the accident, photos, and witness statements. They may also bring expert witnesses to recreate the accident or provide more information about the cause.

The insurance adjuster will also want to review your medical records. They often base their initial settlement offer by estimating your immediate medical costs based on a specific injury, not their long-term effects.


Once the insurance company reviews all the evidence related to your accident, they will offer you monetary compensation based on the company’s own policies or let a computer program generate a settlement offer. The percentage of liability of the insurer’s policyholder and the limits of the policy may also influence the settlement offer. 

For example, in a Florida car accident, the adjuster will consider your personal injury protection (PIP) insurance coverage. Florida law requires all drivers to buy PIP coverage along with their liability insurance to pay for your immediate medical expenses. The adjuster will deduct the PIP coverage amount from the value of your settlement, minus your deductible. 

Once the adjuster makes all the calculations, they will offer an initial settlement, which may cover only a fraction of your damages, especially if your accident left you with serious or catastrophic injuries that require more extensive medical care, such as a traumatic brain injury (TBI).

For this reason, legal professionals urge accident victims not to take an offer from the insurance company without speaking with a lawyer and getting a better understanding of the true value of their accident case. If you accept an offer from the insurance company, you cannot ask for more if your injuries require more treatment.

Putting Together a Demand Package

You must gather evidence to create a demand package that reflects the full extent of your accident-related damages. An attorney may recommend that you wait until you have recovered enough from your injuries so you have a better understanding of the long-term impact of injuries on your life—not just the current medical bills, but future medical expenses, your level of physical and emotional pain and suffering, how your injuries might affect your ability to work in your field or your quality of life.

Medical Expenses

You will need to keep track of all medical expenses related to your accident throughout your recovery, as these provide evidence to support your demand package.

These medical expenses may include:

  • Ambulance transportation
  • Emergency or urgent care treatment
  • Medical procedures and surgeries
  • Durable medical equipment to assist with mobility
  • Hospitalization
  • Long-term care 
  • In-home medical or home health care
  • Physical therapy
  • Occupational therapy 
  • Psychotherapy (for accident-related psychological effects)
  • Home or vehicle modifications (installing ramps, widening doorways, etc.) 
  • Anticipated cost of future medical treatments 

Lost Income 

Your accident injuries may prevent you from working as you recover. Some people may never return to their jobs in the same capacity. The loss of income can emotionally and financially overwhelm people, especially when they must deal with mounting medical bills.

Check stubs, income taxes, and any correspondence with your employer can establish your missed days from work and the income you lost. A personal injury lawyer can calculate your lost income, especially if the accident affects your ability to return to work as you did before the accident. 

Pain and Suffering

Accident victims often experience physical and emotional pain and suffering. These more subjective damages are more challenging to evaluate than medical expenses or lost income.

Insurance companies may base the value of your pain and suffering using a formula that takes into consideration the extent of your medical costs. A personal injury attorney will dig deeper to better understand how your accident has affected all aspects of your life, both physically and emotionally.

Once you have put together a demand package with a monetary value for your damages, and provided evidence to back up those claims, you are ready to negotiate with the insurance company.

Again, legal professionals strongly recommend that you work with a personal injury attorney familiar with insurance companies' tactics to ensure a more successful outcome.

Let the Negotiations Begin

Once you hand your demand package to the insurance company, they will likely attempt to negotiate a lower settlement than your demand, and you may want to counter their offer.

Company policy may bind your insurer regarding how much they can raise their offer. Or, they may carefully scrutinize your demand package to look for holes in your claim. They may question whether you had pre-existing medical conditions or filed prior personal injury claims. They may request an independent medical evaluation to get another opinion about your injuries. 

As negotiations progress, both parties often meet somewhere in the middle. However, in some cases, the insurance company may refuse to budge. If you work with a lawyer, they may recommend that you file a lawsuit in civil court.

In general, parties prefer not to avoid an expensive and time-consuming trial. Almost always, lawsuits settle before the case goes to trial.

What Is the Deadline for Filing Accident Lawsuits in Florida?

If you wish to file a personal injury lawsuit in Florida civil court, you must do so within two years of your injury. Failing to file before this deadline will likely result in you not recovering compensation through the courts.

Some examples of accident cases subject to this two-year deadline include the following:

If the accident results in a fatality, surviving family members have two years after the death to file a wrongful death claim

How Can a Personal Injury Lawyer Help Me Negotiate With the Insurance Company?

A personal injury attorney can provide critical legal advice and support for your accident claim and improve your chances of obtaining full compensation for your accident-related damages. 

Some ways your lawyer can assist you through this process include:  

  • Determining the extent and value of your damages
  • Advising you on laws and deadlines that may affect your claim
  • Identifying all liable parties in your case
  • Negotiating with insurance companies to reach a fair settlement 
  • Filing your case within Florida’s statute of limitations
  • Representing you in court should your case go to trial
  • Providing you peace of mind that a professional is handling your case so you can focus on your recovery
Christopher D. Alas, Attorney for Truck Accident Cases near Miami Lakes, FL
Christopher D. Alas, Personal Injury Lawyer in Miami Lakes, FL

Call a Personal Injury Lawyer Today

Whether you suffered injuries in a car accident, truck accident, or slip and fall incident, a personal injury lawyer can handle negotiations with the insurance company on your behalf and greatly improve your chances of getting fair compensation for all your losses. 

To get you the compensation you need and deserve, contact a personal injury law firm in Miami with the experience and track record to go head-to-head with the insurance company today for your free consultation and case evaluation.

Schedule a Free Initial Consultation Today!