Updated June 17, 2026
Know your number before you negotiate
Run the multiplier and per-diem methods on your own figures first.
Settlement negotiation follows a predictable sequence: demand letter with documented evidence, insurer counter-offer, further exchanges until both sides agree or reach impasse, then a signed settlement agreement and release. Most claims settle before any lawsuit is filed. The ones that do not are usually the ones where someone skipped steps early on.
Step 1: Reach maximum medical improvement first
Do not send a demand until your treating physician declares maximum medical improvement (MMI), the point where further significant recovery is not expected. Settling before MMI means you are guessing at future medical costs. Once you have the MMI documentation and a complete picture of your damages, you have what you need to write the demand.
Step 2: Write a formal demand letter
The demand letter is your opening argument and it needs to be a complete one. Describe the accident, summarize your injuries and treatment, list every economic damage item with supporting documents (bills, wage records), make a specific pain and suffering argument with your method and your number, and state a total demand. Set it above your actual floor to leave room to come down. Keep the tone factual. A demand letter that reads like a complaint is easier to dismiss than one that reads like a ledger.
Step 3: The insurer's review and counter-offer
The adjuster reviews your demand, examines your records, and makes a counter-offer. The first counter is almost always well below your demand and often well below fair value. That is not their final position; it is their opening one. Respond in writing with a revised demand that comes down modestly, and explain specifically why each component of their counter is inadequate. Ask them to justify specific reductions in writing. This builds a record and slows the easy dismissals.
Step 4: Negotiating rounds and bargaining power
Most negotiations run two to five rounds before settlement or impasse. Your position is as strong as: your liability evidence, your medical documentation, your pain and suffering calculation, and the credible possibility you will file suit. The last one matters more than people expect. An adjuster who knows you have a trial attorney with a record in the jurisdiction tends to make more serious offers. See do you need a lawyer for when representation changes the math most.
Step 5: Agreement and release
When both sides agree on a number, the insurer sends a settlement agreement and release. The settlement release you sign is a permanent contract. It waives your right to sue for any further damages from this injury, including medical costs you did not anticipate at the time. The insurer's paperwork often arrives with language worth reading carefully before picking up the pen. Your attorney will review it for you if you have one. Once signed, payment typically follows within two to six weeks.
Know your number before you negotiate
Run the multiplier and per-diem methods on your own figures first.