How to Negotiate a Claim with an Insurance Company

Man negotiating insurance company.

After you have been injured in an accident and file an insurance claim, it is likely you will have to negotiate with the insurance company. Any quick offer from an insurer is likely to be low and intended to limit the insurer’s liability. It may be made before you can understand fully the extent of your losses from an injury in a car accident, slip and fall accident or truck accident.

A serious injury may have an ongoing impact on your life and involve future medical costs. It is important to be able to estimate those future costs before agreeing to any settlement. Obtaining appropriate insurance compensation requires patience, persistence and doing your homework to establish your costs and losses. You will be at a disadvantage if you try to negotiate the settlement of a personal injury claim on your own.

The personal injury lawyers of The Sawaya Law Firm have successfully pursued insurance settlements in Denver and across Colorado for more than 35 years. Below, we outline how negotiations in a personal injury claim typically proceed, and what you should do to level the playing field in dealings with an insurance company.

How Insurance Claim Negotiations Work

You are probably familiar with the start of the insurance claims process after a car crash. You contact the at-fault party’s insurance carrier, explain what happened and submit receipts for medical bills and other costs and losses to be reimbursed. If it is a relatively small claim, it may be paid with no problem. But expensive claims are typically more complex.

Most insurance companies are for-profit businesses. They try to pay out as little as possible in claims. In some cases, an insurer will deny responsibility for the claim, often by asserting that their policyholder was not responsible for the injury. In other cases, the claims adjuster will make a calculated low-ball settlement offer.

How to Negotiate a Claim with an Insurance Company

Anytime an initial settlement offer is for less than what you claimed, you should consider rejecting the offer. You have the right to demand what you feel you deserve up until either you have accepted a settlement with your signature, or a judge has affirmed a jury’s decision.

1. Insurance Company’s ‘Reservation of Rights’

After you file an insurance claim, you will receive a letter acknowledging your claim and advising that the company intends to investigate. This is known as a “reservation of rights” letter. It indicates essentially that the insurance company reserves the right to dispute your claim and not pay. It is a standard letter that protects the company legally.

2. Claimant’s Demand Letter

You should respond to a reservation of rights letter with a letter of your own, known as a “demand letter.” It should restate your claim by explaining what happened and why the insurer’s client was at fault, and it should itemize the payment you deserve. You should list, bill by bill, your specific costs due to the accident, and the dates you have been out or work and the income you lost because of work absences. These costs are known as “special damages.” Back up your demand with copies of bills or receipts.

Your demand letter should also explain the “general damages” you are owed. General damages are paid for your physical pain and suffering, emotional distress, loss of enjoyment of life, and loss of consortium, if applicable.

3. Insurer’s Response to Your Demand

The insurance company will respond by letter or by phone to explain disagreements with your demands and to make a counteroffer. Some insurers will try to pressure you into accepting by saying they are making a one-time offer. Some will sound very sympathetic and try to persuade you they are sticking their own neck out by offering more than you really deserve. Others may say they are offering as much as they have authority to offer.

In many cases, as insurer’s first offer is very low. Insurance adjustors count on claimants being unable or unwilling to fight. If you do not have a lawyer fighting for you, an insurer is not likely to offer the full amount your claim is worth.

4. Your Counteroffer and Ongoing Negotiations

Insurance is meant to make you financially whole after you have suffered a loss. Based on your actual costs (special damages) and how badly you have been hurt (general damages), decide a minimum you can accept to feel like you were treated fairly.

If the insurer’s settlement offer is not acceptable, you need to say so and make a counteroffer in writing. You want everything to be in writing. If you speak to an adjuster by phone, decline the offer and ask for a written offer. You may get a reiteration of the phone conversation or maybe a slightly better offer.

Your counteroffer should address any claims the adjuster made for not paying the amount that you demanded.

As you and the claims adjuster negotiate, you should always wait to hear from the insurer before making another move. You’ll see how much they are coming toward your figure with each offer, but the insurance company may eventually present a final offer. At this point, your options are to accept or to initiate a personal injury lawsuit, which asks the courts to step in and settle the matter.

Keys to Successful Injury Claim Negotiation

To ensure that you are negotiating an insurance claim from a position of strength:

  • Know what you want. Save all your bills and receipts, and calculate what this injury has cost you, as well as how badly it has affected your life and your future ability to work and earn income. Determine what you need to get your life back on track financially.
  • Show that you deserve it. Gather evidence that establishes the at-fault party’s liability for your accident and injury. Present it in your first demand latter. Explain the extent of your injuries and medical treatment, particularly any long-term or permanent harm or disability.
  • Show you mean business. Hire an experienced personal injury lawyer to represent you and negotiate on your behalf. An experienced attorney will be in a better position to determine the fair value of your claim based on having handled numerous personal injury claims. Having an experienced attorney represent you can prevent an insurance company from taking advantage of you, when you are struggling to recover.

We’ll Show Them You Mean Business

Insurance claims adjusters have the upper hand when negotiating claim settlements with injured individuals because they engage in negotiations every day. Our experienced Denver personal injury attorneys level the playing field for clients because we fight insurance companies every day.

If you have been injured in an accident in Colorado, let The Sawaya Law Firm help you pursue full compensation for your injuries. Our firm has been successfully negotiating and litigating accident claims in Denver and throughout the state for more than 35 years. We take pride in the heritage of justice we have established through our legal advocacy for injured Coloradans.

Let us take the burden of negotiating with insurers off of you so you can concentrate on recovering from your injuries. Contact us today for more information about how we can help you obtain the insurance settlement you deserve.


Michael established The Sawaya Law Firm in 1977 and built it into one of the largest personal injury law firms in Colorado, with more than 20 lawyers and 80 staff members serving clients from five offices located in Denver, Greeley and Colorado Springs. Throughout its history, the firm has stayed true to its 12 Core Values, which emphasize excellence in advocacy and a commitment to providing outstanding client service. Michael studied sociology and economics as an undergraduate student at The Colorado College, and he earned his law degree from the Texas Tech University School of Law. In addition to being involved in several legal and community organizations, Michael enjoys playing music and cooking, and he has written a book on spiritual matters.