When the insurance company makes a settlement offer, you need to understand exactly what you're being offered and whether it fairly compensates you. Here's how to evaluate and respond.
What a Settlement Includes
Property Damage
- Vehicle repair costs or actual cash value if totaled
- Personal property damaged in the vehicle
- Diminished value (in some states)
If Your Car Is Totaled
The offer should reflect:
- Actual cash value (ACV) of your vehicle
- Same make, model, year, mileage, and condition
- Local market prices, not national averages
- Any special features or recent upgrades
Injury Claims
If there are injuries, the settlement may include:
- Medical expenses (past and future)
- Lost wages
- Pain and suffering
- Loss of earning capacity
Request a Breakdown
Ask the adjuster to explain exactly how they calculated the offer. Understanding their math helps you identify areas to challenge.
Evaluating Vehicle Damage Offers
For Repairs
- Compare to independent repair estimates
- Ensure all damage is included
- Check that quality parts are specified
- Verify labor rates match local shops
For Total Loss
- Research comparable vehicles for sale locally
- Check values on NADA, Kelley Blue Book, and Edmunds
- Consider your vehicle's specific condition and features
- Account for recent maintenance or upgrades
Red Flags in Offers
Be cautious if:
- Offer comes very quickly, before full damages are known
- Adjuster pressures you to accept immediately
- Amount seems significantly below your research
- They won't explain how they calculated the offer
- Offer doesn't include all your documented expenses
Your Options
Accept the Offer
If the offer is fair and covers your losses, you can accept. Before signing:
- Understand you typically can't seek more later
- Read the release carefully
- Make sure all claims are resolved
Negotiate
You can counter with a higher amount:
- Provide documentation supporting your counter
- Point out specific items undervalued
- Stay professional and factual
- Be prepared for back-and-forth
Request Review
- Ask for supervisor review if adjuster won't budge
- Submit new evidence that supports higher value
- Request re-inspection of vehicle damage
Don't Sign Until Ready
Once you sign a release, you generally cannot go back for more money. Make sure all damages are known and you're satisfied before accepting.
Negotiation Strategies
Build Your Case
- Gather comparable vehicle listings
- Get written repair estimates
- Document all expenses with receipts
- Calculate total losses clearly
Make a Counter-Offer
- State your desired amount with justification
- Reference specific evidence
- Be reasonable—extreme demands get ignored
- Leave room for negotiation
Stay Patient
- Don't accept out of frustration
- Take time to consider offers
- Multiple rounds of negotiation are normal
If You Can't Reach Agreement
When negotiation stalls:
- Review your policy's dispute resolution provisions
- File a complaint with your state insurance department
- Consider mediation or arbitration
- Consult with an attorney for larger disputes
Settlement Timing
Don't Rush
- Ensure all damages are fully known
- For injuries, wait until treatment is complete
- Consider future costs that may arise
Don't Wait Too Long
- Be aware of statute of limitations in your state
- Evidence can become less available over time
- Witnesses' memories fade
Understanding the Release
Before signing any settlement release:
- Read every word carefully
- Understand what claims you're giving up
- Check if it covers all parties and all claims
- Ask questions about anything unclear
- Keep a copy for your records
A settlement offer is a starting point, not a final answer. Take time to evaluate it properly, negotiate if needed, and don't accept until you're confident the offer fairly compensates your losses.