How do I settle an insurance claim privately?

Laura Fox explains How do I settle an insurance claim privatelyAre you wondering, "How do I settle an insurance claim privately?"  If you cannot find a personal injury attorney to represent you, you can settle an insurance claim privately. Before proceeding, however, you should first know your 3 options in representing yourself in court.  Only after deciding which option is best for you, should you carefully proceed with the following steps on how to settle an insurance claim privately, without a lawyer.

Intro: This article is intended for those who cannot find an attorney

The Risks of Self Representation

First, it is important to understand why it is so risky to represent yourself. Litigation and trial is controlled by civil procedure rules and rules of evidence. Not knowing these rules puts you at a distinct disadvantage and would easily put your case in a position of dismissal for failing to follow the rules.

Caveat: There is no turning back after a settlement release form is signed.

If you successfully settle your case, the insurance adjuster will send you what is called a Release. A Release “releases” the insurance company and their insured from any future claimed injuries relating to this accident. In other words, you can’t take the money, realize your injuries are a lot worse than you thought, and then go back asking for more. Once you sign the Release, you have settled.

How to settle an insurance claim privately, without a lawyer:

Step 1: Identify your legal issue and which cause of action it qualifies as

For these plaintiffs, I would suggest they start out knowing what exactly 1) what your legal issue is, and 2) what cause of action your legal issue falls under.  A plaintiff has a cause of action when evidence indicates she has been wronged in a way that is legally recognized, and all necessary elements of the legal wrongdoing can potentially be fulfilled.

Most personal injury lawsuits are based upon a “negligence” cause of action. Personal injury claims also can include causes of actions like loss of consortium and negligent infliction of emotional distress, among others.

Step 2: Know the elements of your cause of action

The elements of a negligence cause of action is as follows: 1) Defendant owed a duty of care to the plaintiff, 2) Defendant breached that duty of care to the plaintiff, 3) The defendant’s breach of duty of care actually or proximately caused, 4) Damages.  The mere act of negligence is the combination of element (1) and (2). However, the mere existence of negligence does not create a cause of action.  That negligence needs to have actually or proximately caused bodily harm. The plaintiff would need to prove all four elements of negligence beyond a preponderance of the evidence.

It also is important to note that the negligence cause of action does not have patience for “could have’s”. For example, “I could have died!”  Yes, you could have died, but you walked away with a sore neck. In other words, the value of your case is however much a jury feels a sore neck should be compensated. In other words, the 4th element of damages refers to present, actual bodily injuries that were suffered or continue to be suffered as a result of the incident.  What could have happened but did not happen does not qualify as “damages” for the negligence cause of action.

Step 3: Get Insurance Information, call to get a claim number, then write a letter

There are a few typical types of incidences that result in a personal injury lawsuit, such as injury from a car accident or a slip-and-fall accident.  Whatever the case may be, after the incident, you first must get the alleged wrong-doer’s insurance information. Once that information has been obtained, you should contact the insurance carrier advising them that the accident occurred and obtaining their claim number and the adjuster’s contact information. (If the alleged wrong doer is a Pennsylvania government entity, you must report the incident within 6 months of the accident.) With each correspondence to an insurance adjuster, be sure to put in the subject line your claim number with that insurance carrier.

Step 3.1 For motor vehicle accidents only…

If the accident is a motor vehicle accident, you must also call your own car insurance to set up your PIP benefits. Now, reminder, PIP benefits are ONLY for motor vehicle accidents: When you signed up for your insurance, you were obligated by Pennsylvania law to obtain a minimum of $5,000 in PIP benefits. Thus, PIP benefits are statutorily required to pay the first $5,000 of your medical bills in relation to the incident. It is crucial these benefits are set up, as PIP benefits do not have a lien on any recovery you make while your health insurance does. (To learn more about Pennsylvania Car Insurance and PIP benefits click here.) Your PIP adjuster will give you a claim number, which you are to give to your medical providers.

Step 4:  Treat your Injuries appropriately

Now that everyone is on alert, it is time for you to treat your injuries appropriately. Contrary to what the movies depict, smart attorneys would never advise a client to exaggerate an injury. Not only is it unethical, but physicians oftentimes perform exams on the patient to determine if the patient is exaggerating. The patient of course has no idea that her authenticity is being tested. And those results come out in the court room.

Injured people are often in an immense amount of pain but do not like to complain. They forge on with their regular life without treating their injuries appropriately. On the day of trial, they reveal how much they have been going through, and the defense attorney will correctly say that the medical records and her daily routine say otherwise. “Were you lying then? Or are you lying now?” the defense attorney will ask.

In sum, the best way to treat is appropriately. Appropriate means doing what your doctor recommends. You may also consult with your treating doctor about your progress and, if you are still in a lot of pain, possible alternative medicinal routes to explore such as injections, surgery, etc.

Step 5: Be sure the doctors connect your injury to the incident, presuming that they believe that to be true

For soft tissue injuries, I encourage treatment at a rehabilitation center, such as Medical Rehabilitation Centers of Pennsylvania (MRCP).  They keep excellent medical records which you will need for your case, render thorough care, and more importantly, the physician writes a narrative reports wherein he summarizes your treatment and determines your diagnoses and whether or not your injuries are “causally related to the incident within a reasonable degree of medical certainty.” This statement is magic legal language that must be in the medical report. Otherwise, your claim will fail.  The necessity of this claim goes back to the third element, “Causation.”

Step 6: Gather medical records and bills

Once you are finished treating, you must now gather your medical records by requesting them from the medical providers. This can be a frustrating, daunting task as most medical providers outsource their medical records. But it is entirely necessary for your case. Be sure to also get any outstanding medical bills.

Speaking of medical bills, you will need to know exactly what your outstanding bills are.  Should you win your case, you are legally obligated to your health insurance for whatever it paid on your behalf.  Note that PIP benefits do NOT need to be reimbursed.  That’s the beauty of PIP!  Accordingly, if you are in a motor vehicle accident, contact your PIP adjuster and ask him for the PIP Log which states what bills have been paid and how much money you have left, if any. If there are PIP benefits left, no bill should be paid by your health insurance. If your PIP is exhausted, you will need to put your health insurance on notice of the personal injury claim and ask for a ledger of payment rendered for injuries they believe to be related to the incident. If your health insurance is Medicare or Medicaid, then you will also need to put them on notice.

Step 7: Determining Worth of Case

The value of your case is directly correlated with the length of treatment, the invasiveness of your treatment, the consistency of your treatment, work loss, disfigurement, and any prior injuries. As a rule of thumb for a soft tissue injury that is treated through physical therapy, a plaintiff typically will be awarded approximately $1,500 to $2,000 per month for pain and suffering.

Step 8: Write and Send a Demand Package

Once you have all of your medical records, know exactly what has been paid on your behalf by your health insurance, and/or how much your medical providers are still owed, you may now write what is called a “demand letter” to the defense insurance adjuster. A demand letter calmly and professionally reiterates the facts of the accident in which the defense adjuster’s insured’s negligence is specified, summarizes your treatment, lists your diagnoses, encloses all of your medical records and bills to be paid to either medical providers or health insurance (some plaintiffs never exhaust their PIP benefits so it is possible you do not have any bills), proof of any other out-of-pocket expenses you might have had as a result of the incident, and proof of work loss if applicable. If you were in a motor vehicle accident, you will also have to show proof that you are Full Tort, which means you can sue for pain and suffering, even for a minor injury. Read more about what Full Tort is here, which also explores how to be considered Full Tort even when you did not elect it on your car insurance.

A template you can use for a demand letter is as follows:

July 17, 20xx

Magic Kingdom Insurance Co.

Attn: Sue Brown

RE:          Joe Smith vs. Doe, DOA: 01/02/18

Dear Mr. Brown,

As you know, I was involved in an incident with your insured on January 2, 2018 at approximately 3:00 p.m.  when I was driving northbound on Cooper St. through the intersection of Cooper St. where it intersects with Mayberry St. in Philadelphia, PA. I had a green light as I was traveling through the intersection. Your insured was travelling eastbound on Mayberry St. at a high rate of speed when he ran through a red light and impacted my front driver’s side door.

As a result of this accident, doctors have rendered the following diagnoses:

  • [insert diagnoses]
  • [insert diagnoses], both of which Dr. Frankenstein said were directly caused by the incident of 1/2/18 and that opinion was stated within a reasonable degree of medical certainty.

The following is an overview of my treatment:

As a result of the accident, I was taken via ambulance to Minnie Mouse Hospital within the same day. I complained to the doctor about my [fill in what is painful]. I was given an X-ray at which point I was told I did not break any bones. I was prescribed [fill in prescription, if any].

On January 5, 2018 I had my first initial consultation with Dr. Frankenstein. His objective findings were as follows: [fill in objective findings]. He diagnosed me with [fill in the diagnoses] and prescribed me to treat 3 times a week for 6 weeks at which point I will be reevaluated.

On March 7, 2018 I was showing little to no improvement, so I was prescribed an MRI of my cervical spine. The impression of the cervical spine was as follows: [fill in impression here].

[continue to summarize the treatment by highlighting the important events, such as when the doctor prescribes more intense medication, refers you to get an MRI, what the MRI results said, or if you had to undergo injections. You want to draw attention to objective findings as they cannot be fabricated.  Once you are finished summarizing your medical records…]

I have exhausted my PIP benefits and therefore my health insurance has a lien against my recovery in the amount of $4,000. My health insurance would not pay for water therapy, so I have an outstanding bill in the amount of $1,000 with City Rehabilitation Center.

Finally, I have elected the Full Tort option on my car insurance, and thus am deemed full tort.

Enclosed please find the following:

  • Smith’s Hospital medical records dated 1/2/18
  • City Rehabilitation Center
    1. Physical Therapy records dated 1/5/18 to 7/5/18
    2. Doctors’ Notes dated 1/5/18 to 7/10/18
    3. Narrative Report by Dr. Allen dated 4/6/18 and 7/10/18
    4. Outstanding medical bills in the amount of $1,000
  • Pluto’s MRI
    1. Cervical Spine MRI dated 3/10/18
    2. Lumbar Spine MRI dated 3/10/18
  • Blue Cross Blue Shield payment ledger in the amount of $4,000
  • Exhausted PIP Ledger
  • Declaration Sheet showing Full Tort option elected.
  • Police Report
  • Photographs of vehicle damage.

Due to my diligent treatment for 7 months and my complete absence of any pain prior to this accident, I respectfully request $[insert monetary amount].  I look forward to hearing from you.



Joe Smith

Enclosures: See CD

Once you send your demand package to the adjuster, you must give them about 2 weeks before they can get back to you, at which point the settlement negotiations will (finally) begin!

Step 9:  Obtaining your own insurance’s permission from your own insurance before you settle.

Before you sign the Release, it is important to explore whether you will have to file an underinsured motorist coverage claim.  All insurance policies have policy limits. Sometimes a plaintiff’s injury is far worse than the money available in the insurance policy. In such a case, the plaintiff will want to file an Underinsured Motorist Coverage claim against her own insurance. For a plaintiff to preserve her ability to pursue an underinsured motorist coverage claim, she must first ask her own insurance’s permission, in writing, to settle with the defense insurance for the agreed amount. The plaintiff’s insurance company must also answer in writing. If this is not done, the plaintiff cannot seek more money from her own insurance.

How to negotiate a settlement with an insurance claims adjuster?

This is a very difficult question for someone representing themselves, because a layman has no knowledge of how an insurance adjuster values a case. Insurance companies follow a strict protocol that evaluates the injury, the length of treatment, work loss, and outstanding medical bills. This formula is well below a plaintiff attorney’s valuation of a case. When making your demand, you should consider the same criteria stated above. I always like the phrase, “Go ask your neighbors.” As a measure of what your case is worth. There is a certain truth to that statement, because if it is a jury trial, the “neighbors” could be your jury.

How to respond to a low settlement offer?

Low settlement offers are almost always made as a first offer, whether you are representing yourself, or if you are represented by an attorney. It is just how insurance companies operate. Just because the insurance company makes a low offer, does not mean that they do not have significant settlement authority above the settlement offer. Clearly, if they are negotiating with an unrepresented party, they will try to take advantage of the situation, unless the injuries are catastrophic, and the coverage is minimal. I recommend that you reduce your demand to a lower number and see if the insurance company increases their offer. I would go back and forth in this process until you feel the insurance company has reached its’ final number. If you are not satisfied with their final settlement offer, your other option is to file a lawsuit pro se.

Learn more: How to file a lawsuit without a lawyer.

Fox Law, P.C.

100 North 18th St, #347

Philadelphia, PA 19103