Your guide to negotiating car insurance settlements

When negotiating a settlement for your car, keep track of all important documents and expenses, work with your insurer if at all possible, hire an attorney if necessary, and get your final settlement in writing.

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Rachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and

Updated|4 min read

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For some people, getting a claim paid by the insurance company is relatively easy. Say you wrap your car around a telephone pole, totaling it. In an ideal situation, you and the insurance company agree on what your car is worth and they write you a check for the actual cash value (ACV) of your car after the accident. 

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But what happens if you and your car insurance company don’t agree on the value of your car? Or worse, what if you were injured and you also have to negotiate medical bills as part of your claim?

Key takeaways

  • If you’re not happy with the settlement you’re offered, you may be able to negotiate with your car insurance company.

  • Keep track of all documents related to the accident, including any estimates or out-of-pocket expenses, to make sure you are property compensated.

  • Depending on the situation, you may need to hire an attorney to help you negotiate a settlement.

  • If you have the right coverage, your insurance company will pay your accident-related expenses and negotiate fault and payment with the other driver’s insurance in a process called subrogation.

How to negotiate an insurance settlement for your car

Whether you feel you were properly compensated during the claims process or you and the insurance company have different ideas about what constitutes a fair settlement, there are steps you need to take so the process is as quick and painless as possible.

There are several things you can do to make sure you are fairly compensated after an accident, including:

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A police report is the most important document you can have after an accident. It provides you with the official documentation of the accident, so work with the police officer on the scene to make sure the report is accurate. Double check to make sure the time, date, and other details are correct so your insurance company can accurately determine fault and pay the claims accordingly.

There are other documents that could be helpful as well, including pay stubs to help calculate missed work and lost wages, receipts for expenses like a rental car while your car is being repaired, and estimates for car repairs from your mechanic. 

Any paperwork you have that is connected to your accident should be kept together in one place. When your insurance company asks for something, always send copies of documents, not the originals, unless it is explicitly stated that an original document is required.

Keep track of all of your expenses to make sure you know exactly how much you should be paid by the insurance company after an accident. This includes:

  • Repair costs

  • Rental car expenses

  • Estimates for any necessary work

In the event of a personal injury caused by the accident, expenses may also include:

  • Emergency room costs

  • Doctor visit expenses

  • Lost wages

  • Physical therapy and rehabilitation

Keep any receipts, estimates, or other documentation to make sure it is all accounted for with the insurance company.

3. Work with your insurer if at all possible

One of the best things you can do when buying insurance is to make sure you purchase coverage designed to protect you even if the other driver is at fault in an accident. If you buy the right coverage, your insurance company will pay your accident-related expenses first and then negotiate fault and payment with the other driver’s insurance in a process called subrogation. 

This takes the process of negotiating a settlement out of your hands and makes it your insurance company’s job. There are a few different types of car insurance coverage that will protect you in an accident, including:

  • Collision coverage: Collision insurance will pay to repair or replace your car in an accident, no matter who was at fault. 

  • Uninsured motorist coverage: Uninsured motorist (UM) coverage will help pay for medical expenses for you and your passengers if you are hit by someone who doesn’t have insurance or doesn’t have enough insurance to pay for the damage they caused in an accident. 

  • Personal injury protection: Personal injury protection (PIP) covers your medical expenses in the event of an accident, no matter who was at fault.

  • MedPay: MedPay is coverage designed to help pay for medical expenses in an accident, no matter who was at fault. This is typically sold in small amounts, sometimes as low as $1,000, to help cover small medical bills, copays, and deductibles in your health insurance.

4. Hire an attorney if necessary

If you are just negotiating for the value of your totaled vehicle, an attorney may not be necessary. However, if you have a newer, more expensive vehicle and the insurance company isn’t giving you enough to properly repair or replace your car, it might be worth your time to hire a lawyer.

For personal injury cases, if you believe the at-fault driver’s insurance company is giving you a lowball offer, it may be worth your time to hire an attorney. The vast majority of personal injury cases are settled out of court, but an attorney can help you negotiate the highest possible payment. Legal counsel can be expensive, but it may be worth it if you are being offered significantly less than the cost of the damages from the accident. 

Whether you are negotiating car repairs or personal injury claims (or both), it can be helpful to have a consultation with a few attorneys to make sure you understand all of your options.

5. Get it in writing

Once you and your insurance company have agreed to a settlement, make sure you get it in writing. Confirming everything in a written document is the best way to make sure everyone is on the same page and there is no confusion regarding the claim. This helps make it clear exactly how much the insurance company agrees to pay and that you understand and agree to that amount.

➞ Learn more about negotiating your car's value with an insurance adjuster

Frequently asked questions

What does it mean if my car is a total loss?

A vehicle that would be more expensive to repair than to replace based on the actual cash value would be declared a total loss. A car can also be declared a total loss if it cannot be safely repaired or if it goes beyond a total loss threshold that may be set by your state. For example, insurance companies in Indiana are required to declare a car totaled if the repair cost is more than 70% of the car’s ACV.

What does it mean if my car is scrapped?

A scrapped car is a vehicle that is damaged beyond repair and sold to a junkyard for scrap metal. A totaled car is likely to be scrapped.

Can I negotiate a personal injury settlement without a lawyer?

Yes, you can negotiate a settlement without an attorney, but that doesn’t mean it is a good idea. If you are dealing with minor damages and small medical bills you might be able to negotiate it on your own, but anyone who is negotiating a larger settlement with an insurance company should seriously consider hiring a lawyer.