Having an auto accident is never a pleasant experience and the aftermath of sorting out repairs and liability, together with dealing with any injuries incurred, can be a minefield. This is often made worse by the one thing which is supposed to help you out in times of trouble—insurance.
The whole process can be confusing and it can be difficult to know what is exactly supposed to happen and when. However, getting a payout from auto insurance differs significantly from getting a fixed sum from your medical insurance—the amount is negotiable and affected by a number of different factors, including quite simply how sympathetic the insurance claims adjuster is feeling on the day!
Unfortunately for consumers, a claims adjuster knows that most people have little or no idea about car insurance claims and can use that in his or her favor in order to offer a low settlement.
It is therefore essential that you have an idea as to how much you think your claim is worth rather than relying on the claims adjuster to offer the best price. Many people think that they have no choice but to accept the initial sum offered by the insurer or risk losing out. This is clearly not the case.
However, for most people, determining a reasonable settlement figure is outside their own experience. Therefore, get a reputable body shop to estimate the total bill for repairs, using the correct parts and including labor and other costs. It is important that you talk to a shop familiar with your make and model of car. Some of the parts which need repair or replacement may be difficult to change, resulting in higher labor costs. Someone unfamiliar with your vehicle may not realize this and may under-quote for the job.
Cars that are a total loss can be valued by looking through the Kelley Blue Book. This will give an idea of what the car is worth, before any additional claims expenses such as personal injury or belongings are added. This source can be quoted to the claims adjuster.
A claims adjuster expects to have to increase their estimate but will generally open with an offer at the bottom end of the spectrum, as a base point for negotiation. Equally the policyholder cannot expect to achieve his or her original figure without compromise. A reasonable range of movement is around 10%-20%, providing the original sum was realistic. Reductions should be offered in stages, allowing the claims adjuster to counter offer each time before climbing a further step down.
If the claims adjuster is unwilling to increase their offer and you honestly believe it is unreasonable, you should ask for a detailed breakdown as to how they calculated their offer and why they believe your estimate is too high. Once received, scrutinize the items—they may be cutting costs by using cheap, low quality parts for your car, or finding other ways to estimate how much it will cost to get your vehicle functional again, and not necessarily to how you had it before.
An effective tactic that a particularly persuasive claims adjuster may try is building a mental picture as to how you might want to spend the claim check. For example, rather than just offering a monetary amount such as $1,000 for your personal injury, the claims adjuster may say they will give you $1,000 for a vacation to relax and recuperate. This helps the person at the other end unconsciously spend the money, making them more receptive to accepting the amount. Sneaky, but effective in some cases.
Another way in which a claims adjuster tries to help expedite agreement to a low offer is by phoning at inconvenient times. Speaking to you when you have time to absorb and question the offer being made is not what the claims adjuster wants. By catching you at an inopportune moment but pressing ahead with the conversation, you are far more likely to capitulate and accept because you are not focused.
A claims adjuster will be able to get away with offering a far lower sum if they are able to establish that you are at least partially at fault for the accident, and the more blame you shoulder, the lower the settlement. When you speak to a claims adjuster at the outset, they may ask you a series of seemingly innocuous questions which are in fact designed to lead you into accepting some or all of the responsibility.
Examples include the claims adjuster asking you how you could have avoided the accident and whether you think the weather played any part. They may also ask about any pre-existing medical conditions you may have.
Most people want to be seen to be as open as possible with the insurance company and will answer these questions willingly. However, there is no obligation to do so and you should be very careful as to how you phrase any response in order to avoid any blame being unfairly apportioned to you.
If the claim is not progressing as you think it should, it may be worth securing the services of an attorney who will be able to counter any underhand tactics the claims adjuster employs. One of the key things to keep in mind is that a claims adjuster does this every day and bargaining hard is something they are accustomed to. Having a professional such as lawyer to negotiate on your behalf can result in a much improved offer. Sometimes, just the threat of a lawyer can be sufficient to get the claims adjuster to provide a realistic offer. They know that legal assistance not only draws out the process but it also becomes far more costly for the insurance provider.
By no means are all claims adjusters acting dishonestly or trying to deliberately swindle customers out of their entitlements. However, their remit is to handle claims as quickly as possible and to arrange settlements which do not exceed the insurer’s actual liability.
In some cases, claims adjusters simply make a series of assumptions rather than taking the time to investigate the case more thoroughly and this can be the underlying cause for a low offer. Claims adjusters expect resistance when negotiating through the offer process but can generally be persuaded to increase the sum if the policyholder is able to accurately explain the reasons why the offer is below a realistic or fair level.
An adjuster can also be persuaded to write off a vehicle if the repair bill is substantial in relation to the value of your vehicle. Post-accident value is invariably reduced with any history of major repairs, an effect known as diminished value. There may also be hidden damage not apparent at the time of repair, for example welded seams in hidden locations opening and subsequently corroding. Having settled a claim, such damage will no longer be covered by the insurance if discovered at a later stage. It can therefore be worth asking the loss adjuster just to total the vehicle if the damage merits it.