How to Settle Your Own Case

At times it may seem sensible to settle an injury claim without hiring a lawyer. For example, where the damages suffered by a plaintiff are very small, where the case for the defendant's liability is particularly weak, or where the plaintiff is confident about negotiating a settlement and wishes to try to avoid paying a lawyer fee, a plaintiff may benefit from attempting to negotiate a settlement of an injury case directly with the insurance carrier for the person who caused their injury.

In rare situations, a plaintiff's injuries will be so severe that an insurance company will offer a "policy limits" settlement offer, the maximum amount of money that the insurance company is obligated to pay under the defendant's policy, even if the plaintiff (or the plaintiff's estate) has not hired a lawyer. As personal injury litigation almost always settles within the defendant's insurance policy limits, in such a circumstance direct settlement may provide a substantial savings to the injured person through avoidance of an attorney fee.


Beware The Insurance Adjuster

If you attempt to settle your own claim, you will likely do so through a negotiation with an insurance adjuster. You should expect that the adjuster will attempt to do two things:

  1. Entice you into making statements which will hurt your case if you subsequently litigate; and
  2. Offer you a settlement substantially below what the insurance company is willing to pay.

You will be best served by insisting that the adjuster make the first settlement offer. If you make the first demand, the adjuster will treat your demand as the high point, and all subsequent negotiations will be toward a lower figure. In contrast, if the adjuster names the initial settlement figure, you can negotiate upward from that figure.

If the adjuster swears that the settlement is in the amount of the insurance policy limits, request that the settlement agreement reflect that this is the only policy available to the defendant in relation to the incident at issue, and that it also recite that the settlement amount is the actual policy limit. That way, if it turns out that additional coverage is available or the adjuster has misrepresented the policy limits, it may be possible to recover additional sums.

Low Settlement Offers

The first settlement offer you receive from an insurance company is likely to be no more than half of the amount the insurance company is willing to pay in order to settle your claim. Insurance adjusters will try to resolve the claim for the lowest possible amount, and may well be evaluated in their job performance based upon their success rate for obtaining low settlements.

While your counter-demand should not be unreasonable, you should be prepared for efforts by the adjuster to "split the difference". That is, if the adjuster offers you $2,500.00, and you double that with a counter-offer of $5,000.00, the adjuster might suggest that it is reasonable to "meet half way" at $3,750, even though the adjuster is authorized to approve a $5,000.00 settlement. There is nothing wrong with being firm with your settlement proposal - you don't have to meet the adjuster "half way". Also, as the adjuster will usually attempt to negotiate down from any figure you recite, it will usually benefit you to build some padding into your figure so that you demonstrate some flexibility in your demand.

When to Seek Legal Help

When you obtain a settlement offer from an adjuster, you may want to get a "reality check" from a lawyer.

Even if you are completely satisfied with the settlement offer, you may benefit from having a lawyer spend about half an hour reviewing the settlement documents provided by the insurance company, including any release agreement. You should expect to pay a reasonable hourly rate for this type of document review. Sometimes, overbroad language in the settlement documents can come back to haunt you at a later date, perhaps preventing you from bringing a cause of action for an even more serious injury caused by the defendant. Don't sign anything unless and until you completely understand what you are signing.

Settlement When You Already Have a Lawyer

There have been cases where, after a plaintiff's lawyer has done a great deal of work on a case and the defendant is ready to make a settlement offer, the plaintiff fires his lawyer and attempts to obtain the settlement directly from the defendant. That game is rarely successful: the lawyer is entitled to be paid, and the client can't avoid paying the lawyer by trying to cut him out at the last possible moment.

In some of the cases in which a client attempts to play that game, as soon as the lawyer is off the case the settlement offer is taken off the table by the defense. Defense lawyers know that as soon as you fire your lawyer you are in a much weaker position to advance your case, let alone to take it to trial, and can be expected to use that fact to their own advantage.

Copyright © 2005 Aaron Larson, All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder. If you use a quotation, excerpt or paraphrase of this article, except as otherwise authorized in writing by the author of the article you must cite this article as a source for your work and include a link back to the original article from any online materials that incorporate or are derived from the content of this article.

This article was last reviewed or amended on Apr 6, 2018.