Insurance companies are notorious for undervaluing claimant’s damages when offering insurance settlements. It is generally an insurance company’s goal to save money and convince the claimant to settle for as little as possible – not to maximize the claimant’s recovery. It is the claimant’s job, therefore, to negotiate with the insurance company for a fairer amount. Use these tips for how to negotiate an insurance settlement to improve your odds of obtaining maximum recovery.

What’s the First Step to Do With the Insurance Company?

The first action you can take to optimize the value of your insurance claim is to report your accident to the insurer as soon as possible. Most insurance companies have rules in place that require prompt reporting. Waiting too long could hurt your ability to recover damages at all, much less to negotiate a fair settlement. Follow all the rules for dealing with an injury and reporting your claim. This includes seeking medical attention, following the doctor’s orders, and providing the insurance company with all necessary information and documentation.

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Prepare Before the Claims Adjuster’s Follow-Up Call

Since Colorado is a fault car insurance state, you will file your report with the at-fault party’s insurer if you’ve been in a car accident. If you’re negotiating a settlement for something other than a car accident, you’ll still contact the at-fault party’s insurance company to initiate the claims process. It is the at-fault person’s responsibility to pay for your damages under civil law.

Someone called a claims adjuster or claims analyst will generally call you from the at-fault party’s insurance company to gather more information about your accident. Before you answer a call from a claims adjuster, prepare yourself for a potentially difficult conversation. The adjuster will ask you questions and seek details about what happened. The law does not obligate you to agree to give a recorded statement, so politely decline to do so.

A claims adjuster can use what you say in your statement against you. Keep in mind during your conversation that the claims adjuster probably knows less about your case than you do. Keep your answers short, factual, and honest. If you don’t feel comfortable talking to a claims adjuster, hire an attorney to do so for you.

How the Investigation Phase Shapes Your Claim

Once you get past the initial call with the claims adjuster, the next crucial stage in your case is the investigation. Think of this as detective work, only instead of trench coats and magnifying glasses, your legal team is armed with paperwork and persistence.

During the investigation, your attorney (if you have one) will dig deep to collect solid proof supporting your side of the story. This process may involve piecing together police reports, medical records, repair invoices, and any photographic evidence of the scene. Witnesses may be tracked down for statements, and timelines of your injuries and recovery are carefully constructed. Every small detail counts—the more complete the picture, the harder it is for the insurance company to dismiss or undervalue your losses.

Why is this step so important? The information uncovered during the investigation directly impacts the credibility, strength, and dollar amount of your claim. Properly documenting things like lost wages, medical expenses, and the impact on your day-to-day life gives you a stronger negotiating position when it’s time to talk dollars and cents with the insurance company.

A thorough investigation can also unearth damages that might not show up in a typical software-generated report—such as pain and suffering, emotional distress, or long-term physical limitations. Ensuring these factors are considered from the very start puts you in the best possible position to seek the recovery you truly deserve.

What Types of Compensation Can Be Sought in a Personal Injury Claim?

When negotiating your insurance settlement, it’s crucial to understand the full range of damages you’re entitled to pursue. Compensation in personal injury claims generally falls into three main categories: economic, non-economic, and, in rare cases, punitive damages.

Economic Damages
These are the tangible, calculable expenses you’ve incurred because of your injury. Examples include:

Medical bills (hospital visits, surgeries, follow-up care)
Prescription and pharmacy costs
Physical therapy and rehab expenses
Lost wages, both current and estimated future losses
Repair or replacement of damaged property, such as your vehicle

Document every penny—keep receipts, statements, and written confirmation from health providers or employers. Concrete evidence strengthens your case.

Non-Economic Damages
These damages are less about paperwork and more about how the injury has impacted your quality of life. While they’re trickier to quantify, their significance shouldn’t be underestimated. Non-economic damages include:

Pain and suffering endured during recovery
Emotional distress or trauma
Lasting disabilities or physical disfigurement
Loss of enjoyment in daily activities or hobbies
Strain on relationships, such as loss of companionship

Insurance adjusters may gloss over these losses, but don’t let them. It’s worth arguing for them in your negotiations, often with the help of your attorney.

Punitive Damages
Though uncommon, punitive damages might come into play if the at-fault party acted with extreme negligence or intentional misconduct—think drunk driving or reckless behavior. Unlike the other categories, punitive damages are designed to punish the wrongdoer rather than compensate the victim.

Understanding all these avenues of compensation will put you in a stronger position when dealing with the insurance company. Don’t leave potential recovery on the table—know what you can claim and insist on a fair outcome.

Establish a Minimum Settlement Amount Before Negotiations Begin

Before you dive into negotiations with the insurance company, it’s wise to establish your own minimum settlement amount. Setting this figure in advance gives you a solid footing and helps shield you from being pressured into accepting an offer that’s far below what you truly deserve.

To arrive at this number, tally up your accident-related expenses—think medical bills, lost wages, costs to repair or replace property, and any other out-of-pocket losses. Take into account future medical care or ongoing financial impacts your injury might cause as well. Having a clear minimum in mind:

Helps you avoid quickly agreeing to a lowball offer,
Allows you to recognize when an offer is actually fair,
Gives you confidence to reject inadequate proposals, and
Serves as a baseline for meaningful counteroffers.

Remember, the insurance adjuster’s first offer is rarely the highest they’re authorized to pay. When you know your minimum, you’re less likely to be swayed by pressure tactics or vague assurances. Set your threshold early, and use it as a guide throughout the negotiation process.

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Don’t Say Yes to the First Settlement Offer

One of the keys to remember in insurance claim settlement negotiation is to say no to the first offer. The first offer is almost never as high as the insurance company is willing to go. Insurance companies offer low initial offers because they know many accident victims won’t discuss their rights with a lawyer or learn the true value of their claims. Many claimants will agree to the first offer without realizing they have the power to negotiate a higher amount. Ignore an adjuster that says it is the “top” or “final” offer. Talk to a Denver personal injury lawyer before saying yes.

Negotiate Using Strong Evidence

The strength of your settlement negotiation lies in your accident-related evidence and documentation. Argue for a higher amount using your medical records, evaluations from medical experts, comparable cases, and police reports. Having evidence of your losses available to show the insurance company can improve your odds of getting a higher settlement offer. A lawyer can help you find and preserve key pieces of evidence.

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What to Do After Reaching a Settlement

If you and the insurance adjuster come to an agreement that fully and fairly compensates you for your losses, your next step is to make sure everything is properly documented. Always get the settlement terms in writing before moving forward. This written agreement should outline the payment amount and any conditions attached to your settlement.

Carefully review the agreement before signing anything. Confirm that all your damages—such as medical expenses, lost wages, and property repairs—are addressed. If anything is unclear or missing, ask questions and request amendments as needed. Once finalized, keep a copy of the signed settlement for your records. This helps protect your rights and ensures you’re not taken by surprise down the line.

What Are My Options If a Settlement Can’t Be Reached?

Not every claim wraps up neatly with a handshake and a check in the mail. If you and the insurance company can’t agree on a fair settlement, don’t worry—there are still paths forward.

First, put all negotiations and offers in writing. This creates a clear record of your efforts and the insurance company’s responses.

If negotiations break down, you have the right to take further legal steps. Consider these possibilities:

Filing a Personal Injury Lawsuit: This moves your case from negotiation to the courts. A lawsuit can motivate the insurer to reconsider your claim or offer a higher settlement to avoid trial.
Mediation or Arbitration: In some cases, you and the insurance company might agree to resolve your dispute through alternative dispute resolution methods. Mediation involves a neutral third party to help guide both sides to an agreement, while arbitration is a more binding process that can quickly resolve disputes without a full trial.
Consulting Your Attorney: Your lawyer can advise you on the best strategy based on your unique situation, evidence, and the insurer’s behavior. Legal guidance is critical—especially if a lawsuit becomes necessary.

Patience and persistence play an important role here. Sometimes, simply initiating a lawsuit is enough to bring the insurer back to the table with a more reasonable offer. If not, your attorney will help you build a strong case for court.

What Happens if the Insurance Company Refuses a Fair Settlement?

If the insurance company refuses to offer a settlement that truly covers your losses, you aren’t out of options. You or your attorney can begin the process of taking the case to court. This means filing a formal lawsuit against the at-fault party and their insurer.

Litigation gives you the opportunity to present your full case in front of a judge or jury, allowing all your evidence and documentation to be reviewed in detail. While most claims settle before reaching the courtroom, having an attorney experienced in trial law can be invaluable in these situations. Your lawyer will handle preparing your case, gathering further evidence if needed, and aggressively advocating on your behalf throughout the legal proceedings.

Often, just taking steps toward litigation signals to the insurance company that you’re serious, which can motivate them to return to the negotiating table with a higher offer. But if they still refuse to be reasonable, you’ll have the support you need to pursue what you truly deserve.

How Can an Attorney Help Me With My Settlement?

You don’t have to negotiate your insurance settlement on your own. After an accident, hire a lawyer to represent you during settlement negotiations. Using an attorney during negotiations can greatly improve the odds of convincing an insurance company to offer more.

Insurers will often boost the value of their offers when they find out claimants have hired lawyers, in an attempt to avoid going to trial. Most personal injury lawyers operate on a contingency fee basis, meaning you won’t pay attorney’s fees unless they get you a monetary award.

How Long Do I Have to File a Personal Injury Claim?

Every state sets strict deadlines—known as statutes of limitations—for filing personal injury claims. Miss this window, and you might lose your right to compensation entirely, regardless of how strong your case is.

Most states give you two or three years from the date of the accident or injury to file a lawsuit. For example, if your car accident occurred on January 1, 2022, your deadline could be as soon as January 1, 2024—or possibly January 1, 2025—depending on where it happened. It’s critical to check your state’s specific rule, as these timelines can vary.

Bottom line: Don’t wait to take action. Letting too much time slip by will only work in the insurance company’s favor. If you’re unsure about your deadline or how it applies to your situation, consider speaking with a seasoned personal injury attorney. They can help you determine your filing window and keep your case on track.

How Do I Negotiate an Insurance Settlement?