How Car Accident Settlements Work: Steps, Negotiation Tips, and When to Hire a Lawyer

After a crash, prioritize medical care and documentation, notify your insurer, and keep receipts and records. Insurers often present a first offer and use adjusters with limited authority; don't accept the initial offer without reviewing your damages. The multiplier method (medical bills times a factor plus special damages) is a common heuristic but not definitive. Consult a personal injury attorney when injuries are serious, fault is disputed, or the insurer's offer is inadequate. Act promptly - time limits vary by jurisdiction.

Car accidents are stressful. Filing an insurance claim and negotiating a settlement can feel overwhelming, especially when you're managing injuries, repairs, and lost time. This guide explains the practical steps after a crash, how insurers typically handle settlements, and when a lawyer can help.

First steps after a crash

Get medical attention first. Even minor injuries can worsen, and medical records are key evidence. Call the police and get a copy of the crash or incident report. Take clear photos of vehicles, the scene, license plates, and visible injuries. Collect contact and insurance information from other drivers and any witnesses.

Notify your insurer promptly. Give a factual account but avoid saying you were at fault. Save all receipts, bills, and records of lost wages or other out-of-pocket costs.

How insurers evaluate claims

If only property damage occurred, an insurer will usually send a claims adjuster to assess repairs and offer a settlement. When injuries are present, insurers consider medical expenses, lost income, future care needs, and pain and suffering.

Adjusters often make an initial offer that they expect to negotiate. That offer is not necessarily the full value of your claim.

A common valuation approach (heuristic)

Some negotiators use a simple heuristic to estimate pain and suffering: add up medical expenses, then multiply that subtotal by a factor (commonly two or three) and add special damages like vehicle repairs and rental car costs. This "multiplier method" is a rule of thumb, not a legal formula. Actual settlements depend on injury severity, liability, evidence, and local practice.

Remember that settlements usually must cover medical liens, repairs, and attorney fees, so the net amount you keep will be lower than the gross settlement.

Negotiation and authority

Don't rush to accept the first offer. Prepare a concise demand package: medical records, bills, repair estimates, lost-wage documentation, and a clear statement of your damages. Call or write the adjuster to explain why the offer falls short and present your evidence.

Adjusters have limits to the authority they can approve. If your demand exceeds their authority, they will escalate to a supervisor or management.

When to consult a lawyer

Consider an attorney if your claim is denied, you face serious or permanent injuries, fault is contested, multiple parties are involved, or the insurer's offer doesn't cover your losses. Many personal injury attorneys work on contingency (they are paid from the recovery), and an attorney can handle negotiations, liens, and, if needed, litigation.

Final notes

Act promptly: there are time limits to bring claims, which vary by jurisdiction. Keep thorough records, be cautious with statements to insurers, and seek legal advice when a claim is complex or the offered settlement is insufficient.