Anyone who feels they are not being fairly compensated by an insurance company after an accident has the freedom to try to negotiate with them. That being said, it's best to arm yourself with some basic knowledge and facts before attempting to negotiate.
How to Negotiate the Value of a Vehicle That Was Involved in an Accident
Having your vehicle involved in an accident through no fault of your own will require you to seek compensation from an insurance company. Negotiate your way to a proper diminished value payout by doing your homework, preparing your talking points and even seeking some professional help if necessary.
No insurance company is going to willingly offer you an attractive payout settlement since they would be essentially losing money when all is said and done. So be prepared for a claim adjuster to offer you the least amount possible for damages to your vehicle.
Before you accept any offer from the insurance company, understand that you have the leverage to negotiate what you think is a fair value.
Understanding 1st and 3rd Party Benefits Claim
First party benefits claim: A first party claim is when you are dealing with your own insurance company after a collision. This typically occurs when either you were at fault for the collision, or the at fault party’s insurance company is unknown or has not accepted liability. Your insurance claim adjuster will determine the cost of repairs, your rental car and medical coverage if available. All of this is based on the specific policy contract language in your policy. If you live in the state of Georgia, it will also include diminished value.
Third party benefits claim: Also known as "liability coverage," third party benefits will cover the damages caused to you by another at fault driver. This will include repair cost, rental vehicle or loss of use payment, diminished value, personal property in your vehicle and injuries that you sustain due to the other driver’s fault. You should also be aware that each state has different minimum insurance amount requirements. This means that if someone who is at fault only has the state minimum coverage of say $10,000 and the cost to repair your vehicle is $12,000, you would need to put the claim through your own insurance policy.
In either case, the insurance claim adjuster will attempt to offer the minimum amount possible. This is why knowing the diminished value of your vehicle is so important for the negotiation process.
The Negotiation Process Between You and the Insurance Company
Before you hear back from the insurance adjuster with their offer, be sure to have a desired settlement amount already in mind along with the lowest amount you're willing to accept. This should be based on your research of what the lowest and highest possible diminished value of your vehicle would be.
If you are being offered a low-ball settlement from the adjuster, don't hit the panic button. Take a deep breath and determine the valid and invalid points in their explanation. Be prepared to explain the emotional stress that the accident has caused you or explain how having no vehicle has impacted your daily routine. Also be sure to state that any dealer or consumer would never pay full value for a wrecked and repaired vehicle.
Ask them what their reasoning is for the low offer. Use this piece of information to rebuke their argument.
The Determination of Fault Differs from State to State
Each state regulates fault differently, the compensation you receive may be affected. It mostly comes down to how much (what percentage) fault of the accident was contributed by you. For this reason, it's important to have the police report, photos, eye-witness testimonies, or anything else to help prove your lack of fault.
Consider Hiring an Attorney
If you feel you are in over your head, you may consider having an attorney in your defense. This may not make a lot of sense however, if the accident was a minor one. Remember, personal injury attorneys are suited for these types of arguments, especially when proving your innocence is tricky.
After a Settlement is Agreed Upon
Be sure to have everything confirmed in writing. The important thing to note here is the amount you have both settled on and what exactly will be repaired, paid for and to whom.