The Negotiation Phase Explained: How Personal Injury Settlements Are Reached
After an accident, most injury victims want the same thing: to heal, to get their bills handled, and to move forward without feeling like the insurance company is taking advantage of them.
One of the most important stages of any personal injury claim is the negotiation phase. This is the point where your case is formally presented to the insurance company, and settlement discussions begin.
In this article, we explain what happens during the negotiation phase, how settlement value is determined, what factors influence the final number, and how clients can make informed decisions about whether to settle or pursue litigation.
What Is the Negotiation Phase in a Personal Injury Case?
The negotiation phase is the stage of your case where your attorney begins formal settlement discussions with the insurance company.
This phase typically starts when your legal team sends a demand package to the insurer. The demand package is a detailed presentation of your case, including evidence of liability, medical treatment, damages, and how the injury has impacted your life.
The demand package usually includes a starting settlement number, which is a figure you and your attorney discuss and agree on before it is submitted.
From there, the insurance company reviews the demand and responds with an offer. Negotiations then move back and forth until one of two things happens:
The parties agree on a settlement amount, or
The case moves toward litigation because no fair agreement can be reached
What Is a Demand Package?
A demand package is the foundation of the negotiation phase. It is the formal way your attorney communicates the value of your case and asks the insurance company to resolve it.
A strong demand package typically includes:
Medical records and medical bills
Wage loss documentation (if applicable)
Evidence of liability (crash reports, witness statements, photos, etc.)
A summary of your injuries and treatment
A discussion of pain and suffering and how the injury affected your life
The purpose is not just to “ask for money.” The purpose is to show the insurance company why your claim is worth what it is worth, based on facts and evidence.
How Is the Value of a Personal Injury Case Determined?
One of the most important things to understand about personal injury cases is this:
A case is ultimately worth what both sides can agree it is worth.
That does not mean the insurance company gets to decide. It means the value is shaped by:
The strength of the evidence
The seriousness of the injury
The risk of going to trial
The motivation of each side to resolve the claim
In many cases, settlement value is influenced by which side is more willing to keep fighting. Some clients want closure quickly. Some are willing to wait. Insurance companies also make strategic decisions about whether to settle now or push the case toward litigation.
Key Factors That Drive Settlement Value
While every case is different, there are several major factors that typically influence settlement negotiations.
Severity of the Injury
More serious injuries generally lead to higher case values because they involve greater medical treatment, longer recovery time, and more impact on daily life.
Medical Bills
Medical bills are often one of the clearest measurable damages in a case. A claim involving a surgery, injections, or long-term care will be valued differently than a case involving only a few weeks of chiropractic treatment.
Wage Loss
If you missed work due to your injuries, the amount of income you lost becomes part of the claim. Some cases also involve loss of future earning capacity.
Pain and Suffering
Pain and suffering is often the most subjective part of a personal injury case — and frequently the biggest component of settlement value.
Pain and suffering reflects the human impact of the injury: how it affected your life, your activities, your comfort, your mental health, and your ability to do the things you enjoy.
A key point many people don’t realize is that pain and suffering is personal. For example, the same injury may affect two people very differently. Someone who trains for competitions or has a physically demanding job may experience far greater impact than someone whose lifestyle is less physically active.
Why Insurance Companies Often Start with Low Offers
It is very common for insurance companies to respond to a demand package with a low offer.
This can feel insulting, especially for someone who has been injured through no fault of their own. But it’s important to understand what is happening.
Insurance companies are businesses. Their adjusters and attorneys are trained to resolve claims for as little money as possible. That is not personal — it is the system.
They may try to minimize your claim by questioning:
Whether treatment was necessary
Whether injuries were related to the crash
Whether a pre-existing condition is the real cause
Whether the pain and suffering is “too subjective”
Whether the case is worth taking to trial
This is why clients should not panic when the first offer comes in low. The negotiation process is designed to move forward from that starting point.
How Long Does the Negotiation Phase Take?
Another common question is:
How long will settlement negotiations take?
The answer depends on the case.
In many situations, the demand package is sent with a 30-day deadline, which is considered a reasonable timeframe for the insurance company to respond. Some insurers respond quickly — sometimes within a week. Others take longer.
Depending on the complexity of the claim, negotiations may resolve:
Within a few weeks after the first offer, or
Over several months if major issues exist
If there is a major disagreement — for example, the insurance company refuses to acknowledge that a surgery was related to the accident — settlement negotiations may stall completely, and litigation may become necessary.
Deciding Whether to Settle or Move Forward
One of the most important parts of the negotiation phase is deciding whether to accept a settlement.
Sometimes, the insurance company reaches a point where they say:
“Take this number or file a lawsuit.”
When that happens, your attorney’s role is to help you understand:
What litigation would look like
How long it would take
What risks exist
What the likely range of outcomes could be
In some cases, it may make sense to accept a reasonable offer now rather than wait a year or more in litigation for a potentially higher result.
In other cases, it may be worth pushing forward if the insurance company is refusing to evaluate the claim fairly.
The Role of Your Attorney During Negotiations
The negotiation phase is not just about exchanging numbers. It is about strategy, experience, and guidance.
Your attorney’s job is to:
Present your claim clearly and professionally
Push back against unfair arguments
Keep you informed at every step
Explain the risks and options
Help you pursue the best possible result
At the end of the day, the decision to settle is always yours. But you should never have to make that decision without understanding your options.
Speak With McMullin Injury Law About Your Settlement
The negotiation phase is where most personal injury cases are resolved — but insurance companies don’t always offer fair value right away. If you’ve been injured and have questions about settlement negotiations, our team is here to help you understand your options and make confident decisions.