How Do Insurance Companies Settle Auto Claims?

After a car accident, the injured party can start a personal injury claim with the insurance company to get compensation for damages. According to Encino Car Accident Lawyer – Auto Crash Attorney CA, the process of obtaining a settlement from the insurance company can get complicated and can take several months to finalize. Understanding this process can help you prepare for the settlement negotiations and what to expect at each stage of the personal injury claim. 

Insurance Company Reviews Demand Letter

Once you file a claim with the insurance company, you would get a letter as a response from them, also known as a Reservations of Rights letter. This gives you the opportunity to put forth the demand letter. The demand letter should contain complete information regarding the damages you suffered from the accident. Each damage you list in the demand letter should be backed with sufficient evidence to strengthen your compensation claim. All of your financial losses and emotional trauma should be described in detail in the demand letter to solidify your claim. Once the insurance company has received the demand letter, they can either approach you to negotiate a settlement, make a counteroffer, or dismiss your claim. 


After a claim is filed, the insurance company can investigate to determine if the claim is viable. Insurance companies can sometimes start investigations as soon as they learn about the accident, even before a claim is filed. This is done to gather facts about the accident.

An insurance adjuster can be assigned to the case. He or she will investigate it and conduct further negotiations. As a part of the investigation, the insurance adjuster can contact the victim to record their statement and gather additional information about the case. In some cases, the insurance adjuster can visit the accident site to inspect the property damage. They can also contact witnesses or meet them in person to get their statements.

After the investigation, the insurance adjuster can evaluate the available evidence and facts of the case and proceed with the settlement negotiations. If there is a lack of evidence, it could result in your claim getting denied by the insurance company.

Settlement Offer if Claim Is Accepted

If the insurance provider reviews your case and determines it is legitimate, they can calculate all your damages and approach you with a settlement offer. However, in some personal injury claims, the insurance company can give the victim a settlement offer soon after the accident to settle the claim.

The first settlement offer made by the insurance company is based on how much they believe your claim is worth after evaluating the evidence. It is possible that this settlement offer is lower than what you expect as compensation for your damages. You and your lawyer can review the first settlement offer made by the insurance company. After that, you could negotiate with the insurance company if it does not meet your expectations.


After the insurance adjuster receives your demand letter, the settlement negotiations begin. Settlement negotiations can go on for a long time because multiple factors of the case are taken into consideration, including the available insurance policies and the evidence.

During the negotiations, the insurance can put forth a settlement offer. You can review it with your personal injury lawyer and decide whether it is in your best interests to accept the offer or make a counteroffer.

Finalize Settlement

If the negotiations are finalized, and a settlement is reached, you will be required to sign an agreement with the insurance company that can prevent you from making any further claims with the insurance company for the same case. However, if a settlement cannot be reached, you would have the option to take the case to court to get a verdict on the amount of compensation you can receive.

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