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Understanding your insurance offer after an accident

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You may be wondering how to deal with insurance after a car accident. After you file a claim, your insurance company will provide you with an insurance settlement offer. An offer generally factors in the costs you may incur as a result of the car accident — medical bills, lost wages and repairs to your vehicle.

Although car accidents are a common occurrence, experiencing one personally can be overwhelming. Figuring out after an accident how to deal with insurance only adds another layer. Not only do you need to worry about your health and safety, but you may also require medical attention and want to get your vehicle repaired as quickly as possible so you can get back to your life. Medical bills and repairs come at a cost and your insurance company may not always cover the expenses entirely. Bankrate covers what you need to know to navigate the car accident insurance process.

Can you negotiate an insurance offer?

Car insurance companies may not mention that the offer is negotiable, but you can always make a counteroffer. You could start by asking your insurance company to explain how the adjuster arrived at the figure and then dispute any inaccuracies. When making a counteroffer, you should:

  • Keep a level head.
  • Do your own research on the damages, gathering multiple repair estimates.
  • Include your research in a written letter.

How to handle different kinds of insurance offers

You could get an insurance offer that does not meet your expectations. If this happens, consider asking the questions you may have before reacting and then formulate a response.

When the damage is considered a total loss

If your car is damaged in an accident, you will either file a claim against the at-fault driver’s property damage liability coverage or your policy’s collision coverage. If the estimated cost of repairing your vehicle is greater than the actual cash value of your car, your car will be declared a total loss. In some states, the damage only needs to be greater than a portion of the vehicle’s value. A total loss also applies if your car is stolen, in which case you would file a claim against your comprehensive coverage.

If you disagree with the insurance adjuster’s calculation, you will need to prove that the car is worth more than your insurance company’s estimate. An example of a car having a higher value might include having previously made improvements to your vehicle. Otherwise, your insurance company will pay you or your leasing company the market value of your car, minus depreciation. This figure is often different from the Kelley Blue Book value.

When the offer is lower than you expected

When you get an offer from your insurance company, you should review it for accuracy. Make sure it includes lost wages and pain and suffering in addition to medical bills if you were injured. If your car was damaged, consider getting an independent estimate of the repair cost. You may even want to get estimates from multiple mechanics so you have more information to provide to your insurance company.

From there, you could submit a letter detailing your estimates and asking for a higher payout. If your insurance company does not comply and you still believe the offer is unfair, you may want to hire a lawyer.

When the adjuster uses the “betterment clause”

Most car insurance policies include a betterment clause that requires the policyholder to pay a fee if the repairs to the vehicle improve its condition when compared to before the accident. For example, if a mechanic uses new parts to repair an old car and therefore adds to its value, you might be required to pay a betterment charge.

If you want to reject your insurance company’s offer because of a betterment charge, you will need to prove that the necessary repairs do not add value to your vehicle. It can help to provide a statement from your mechanic or another expert when submitting your counteroffer.

How a settlement works

After negotiations, you and your insurance provider will agree to the settlement in writing. When you receive your payout less your deductible, it is important to understand what to do with your car insurance claim check. Depending on your insurer and your state, you may be required to use the funds for the intended purpose or you may be able to cash the check and use it however you see fit.

Your insurance company might make out the check to you and the repair shop, in which case you would need to sign the check over to the mechanic. Otherwise, your insurer might require that you show proof of repair. If your car is financed, your finance company may either be included on the check as a payee or have a say in where the vehicle is repaired.

Frequently asked questions

What happens if my car insurance claim is denied?

If an insurer denies your car insurance claim, there are options for recourse. First, you should ask questions to understand why the claim was denied. There may be exclusions in your policy or you may not have sufficient coverage. If you still disagree with your insurance company, you could then collect evidence to appeal the denial in a formal letter.

Can I reject a car insurance offer?

If you do not agree with your insurer’s settlement offer, you can always negotiate with your insurance company. It helps to gather additional evidence before submitting a letter to your insurance company asking for an updated offer.

What is the average car insurance payout?

In 2019, the average claim check was $18,417 for bodily injury liability claims and $4,525 for property damage liability claims. The average collision claim payout was $3,750 and the average comprehensive claim check was for $1,780. After a car accident, insurance is vital to avoid paying these costs out-of-pocket.

Written by
Lindsay Frankel
Insurance Contributor
Lindsay Frankel is a former contributor to Bankrate and has three years of experience writing for insurance domains such as Insurify, LendingTree,  FinanceBuzz,  NextAdvisor,, The Balance and The Simple Dollar. She has covered common insurance product lines such as auto, home, life, renters and small business insurance.
Edited by
Insurance Editor