When someone is injured in an accident due to someone else’s negligence, the accident victim can pursue a personal injury claim for financial compensation. During an insurance claim or a lawsuit, the victim and the at-fault party will often negotiate a settlement. The goal in a settlement is to obtain maximum financial recovery for your losses. To do this, your personal injury lawyer will take part in negotiation to seek the compensation you deserve.

Skilled attorneys fight hard for their clients during the negotiation process. An experienced legal team will have a proven track record in negotiations for victims of many different accident types. To learn more about negotiation and how it can work in your case, schedule your free consultation. 

How Does the Negotiation Process Start? 

Once a personal injury claim is filed, either side can offer to settle the claim. From there, negotiations can follow different stages before settlement. 

Settlement Amount Proposal 

Before considering settlement proposals, your lawyer will need a good idea of the extent of your injuries, lost wages, and other costs from the accident. Your personal injury lawyer will review your medical statements and other documentation to estimate the value of your claim. An experienced personal injury lawyer will be able to compare your claim with similar cases to come up with a settlement amount. 

Before contacting an insurance company, a good lawyer will base their estimate on several different factors. Some factors address not only the losses you’ve already dealt with, but future losses such as reduced earning capacity, costs of rehabilitation, and more. 

Demand Letter 

One of the first steps your lawyer will take is to send a demand letter. What is a demand letter in a personal injury claim? This letter describes the incident, potential issues, and a proposed settlement amount. 

The demand letter would normally include: 

  • A description of the details and facts involved; 
  • A review of applicable laws that would support a claim that the other party is liable; 
  • Details of your injuries, costs, and other damages caused by the other party; 
  • Copies of documents such as medical bills, invoices, and other proof of your costs;
  • A proposed dollar amount to settle the claim.

The other party (or their insurance company) can then accept your offer, decline it, or send a counter offer with their own settlement figure. 

Reservation of Rights Letter 

Insurance companies will typically send accident victims a reservation of rights letter regarding their claim. The purpose of this letter is to advise the claimant that the insurance company is investigating the claim. The letter will also state that the insurance company reserves its right to deny the claim if the accident was not covered under the policy. 

While this might seem concerning to you, your lawyer has seen many such letters before and knows how to respond during negotiations. A reservation of rights letter usually serves to protect the insurance company’s interests at the start of a claim investigation. 

Understanding Policy Limits 

Insurance companies operate under guidelines known as policy limits. Depending on a plan’s coverage, the insurer will cap their payments based on the policy limits. Insurers are hesitant to pay the full policy limits under a coverage plan. Your attorney, however, will demand that they pay the entire amount allowed under the policy. 

When an insurance company fails to do so, a skilled personal injury lawyer will demand an explanation and put the insurance company on the defensive. This is where it helps to have a seasoned personal injury lawyer who won’t take no for an answer during the negotiation process. 

Understanding a Claim’s Strengths 

During negotiations, a personal injury attorney must know the strengths and weaknesses of their client’s claim. They will use the claim’s strength to their advantage when negotiating a settlement. 

Your lawyer will use compelling facts about the claim, such as the severity of the accident or devastating aftermath to negotiate a higher settlement. At the same time, they will seek to downplay the weaknesses of a claim or minimize those flaws in the eyes of an insurance company or defense attorney. Understanding a claim’s strength is critical when a settlement payout is being negotiated. 

Negotiating the Final Agreement 

After the initial exchange of letters and information, both sides will need to come together and negotiate. This can involve phone calls or meetings to discuss what both sides really want. Your attorney will aggressively negotiate for maximum value to cover your losses. The other party will seek to pay as little as possible. 

Ultimately, both sides usually find a way to realistically resolve the claim. An important consideration in settlement negotiations is the risk involved with taking a case to a jury trial. If a personal injury claim has merit, insurance companies usually prefer to negotiate a settlement than try their luck with a jury. Risk avoidance is how insurance companies operate, and jury trials run against that purpose. 

Once terms of a settlement are negotiated, the parties will put the agreement in writing. The settlement agreement will state the amount agreed to and the terms of the settlement. The settlement agreement will also prevent you from bringing a personal injury claim against the at-fault party in the future. This is why it is so important to get it right the first time during negotiations. 

Contact the Encino Personal Injury Lawyers of JUSTICENTER Personal Injury Lawyers for Help Today

Please contact an experienced personal injury lawyer at JUSTICENTER Personal Injury Lawyers for a free initial consultation today at (833) 852-3600.

Our main office is in Encino, CA, but we serve all through Los Angeles County.

JUSTICENTER Personal Injury Lawyers
16633 Ventura Blvd suite 1011,
Encino, CA 91436