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How to Counter a Low Insurance Settlement Offer from Your Insurance Company

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Unhappy man (Photo: @PentiumIII via Twenty20)
Whether you’re dealing with your automobile or homeowner’s insurance company, the receipt of a settlement offer on an accident claim doesn’t mean the case is closed and over. A settlement offer is just that: an offer. If the dollar number seems insufficient, here’s how to counter a low insurance settlement offer from your insurance company.

Understand how an insurance settlement offer is determined

An insurance settlement offer from your insurance company is prepared by a claims adjuster. There are strict protocols that these adjusters follow to determine a value for a claim. By understanding the way a settlement offer is prepared, you can better judge its fairness and make an argument for a counter offer to your insurance company.
The first thing a claims adjuster does is try to understand what happened in an accident. The adjuster will talk with the policyholder and others involved in the accident. She will also read through any documentation about the incident, such as an accident or police report. As part of that understanding, there will be some investigation into any previous claims filed by the policyholder.
The claims adjuster from your insurance company then examines all documents associated with the case. This means looking at receipts for repairs, medical bills, proof of earnings, and anything else pertinent to the matter. The adjuster then uses these to calculate how much the policyholder would be likely to win in a court case and estimates more subjective losses like pain and suffering. Ultimately, the adjuster arrives at a dollar figure and makes an insurance settlement offer.

Identify what parts of the low insurance offer are unfair

When the need to counter a low insurance offer from your insurance company arises, you must provide proof that you deserve more compensation. Think over the process employed by the claims adjuster. Is fault clearly determined? Have the severity of losses been thoroughly documented?
Where gaps exist, seek to fill them. If you require more witness testimony to establish fault in the accident, seek out people who saw it occur. If the amount for medical bills is low, make sure you submitted all of your receipts. If much of it falls into gray areas, think about how life has changed beyond finances from the accident and seek legal assistance, if desired.

Prepare and submit your counter offer to your insurance company

Before you draft a written counter offer to the low insurance settlement offer you received, give some thought to the following three things:
  • How much you deserve in payment
  • Limits of the insurance policy
  • Value of the assets held by the at-fault individual or entity
These things influence the final value of a settlement. For instance, while you may deserve $50,000, the insurance policy limits may be $25,000 with limited assets belonging to the individual. This is where the saying, “You can’t squeeze blood from a turnip” comes into play. In such a situation, you may realistically only be able to get $30,000.
While there is no set way to draft a counter to a low insurance offer from your insurance company, there are some standard parts to include:
  • A statement that the previous offer is insufficient
  • Refute any inaccuracies in the settlement offer
  • Present a figure you feel is fair
  • Give the reasons why your counter offer is appropriate
  • Attach any documentation supporting your counter offer that has not been previously examined
In your letter, strive for a realistic dollar amount in light of the situation. Be polite. In this manner, the claims adjuster will be more likely to work with you on your counter offer.