Detailed answer — Step-by-step approach

1. Know your case value before you negotiate

Before you respond, build a realistic number for what your claim is worth. Consider:

• Documented economic losses: medical bills, repair bills, lost wages, receipts.
• Non-economic losses: pain and suffering, emotional distress, reduced quality of life.
• Liens and subrogation: medical providers, Medicaid, or insurers may have claims against any settlement.
• Costs of going to trial: attorney fees (if not contingency), expert fees, time, and risk of getting less at trial.

Get estimates from medical providers, employers, and any repair shops. If you are unsure how to value non-economic losses, consult published jury verdict databases, a local attorney, or a claims adjuster’s guidance to set a realistic range (low–likely–high).

2. Treat a low opening offer as a bargaining anchor, not a final answer

Opening offers are often anchors intended to leave room for negotiation. Don’t accept or reject emotionally. Instead:

• Respond in writing with a reasoned counter that restates your demand range and the facts supporting it.
• Point to the key documents that justify your number (medical records, invoices, photos, police reports).
• Ask clarifying questions—why is the offer that low? Are there perceived gaps in liability or damages?

3. Use documentary evidence and a clear narrative

Decision-makers respond best to concise, supported stories. Prepare a short packet or email that contains:

• A one-page summary of liability and damages.
• Copies of critical documents (redact sensitive info if needed).
• A timeline of events and treatment to explain causation and ongoing care needs.

4. Apply negotiation techniques: anchor, concession sequencing, and BATNA

Common negotiation tactics that work in settlement talks:

• Anchor high but realistic: your initial counter should leave room to concede without going below your minimum acceptable number.
• Concession sequencing: make concessions gradually and obtain something in return each time (e.g., a better release term or payment schedule).
• Know your BATNA (Best Alternative to a Negotiated Agreement): what you will do if talks fail (go to mediation, file suit, accept a lesser offer). A strong BATNA increases leverage.

5. Use formal Colorado procedural tools when appropriate

Colorado civil procedure has tools that influence settlement dynamics. For example, offer-of-judgment rules encourage reasonable settlement by shifting costs if an offer is rejected and the rejecting party does worse at trial. See Colorado civil rules for details. Review Colorado civil rules (including offers of judgment) on the Colorado Judicial Branch website: https://www.courts.state.co.us/Courts/Rules/rules.cfm?rule_type=civil.

6. Consider mediation or private neutral evaluation

Mediation can narrow gaps quickly. A neutral mediator helps both sides identify realistic outcomes and often results in a confidential, faster resolution than trial. Colorado courts and many counties offer mediation services; private mediators are also widely available.

7. Watch for and protect against common settlement pitfalls

When you get a better offer, check:

• Release language — is it broad enough to give away unrelated claims? Consider limiting scope to this claim.
• Payment terms — lump sum vs. installments, timing, and who will pay (insurer vs. defendant).
• Tax implications — some components may be taxable (consult a tax professional).
• Liens and subrogation — ensure lien holders are handled or a holdback is set to resolve claims.
• Confidentiality clauses — do you want terms to be public or secret?

8. When to get an attorney involved

If the demand gap remains large, the legal issues are complex, the potential recovery is substantial, or third-party liens exist, consult a Colorado-licensed attorney. An attorney can:

• Value your claim and explain legal risks if you go to trial.
• Use procedural tools (including offers of judgment) strategically.
• Prepare or review settlement and release language to protect your rights.

9. Finalizing a settlement — document everything

When you reach terms, get a written settlement agreement signed by all parties. Make sure it specifies payment method and timeline, describes exactly what claims are released, and addresses liens and costs. Keep copies of all communications and documentation.

Practical example (hypothetical)

Hypothetical facts: You suffered a soft-tissue injury in a low-speed crash. Your demand: $25,000 for medical bills and pain and suffering. Insurer opens at $2,500.

Suggested steps in that fact pattern:

1. Compile your medical bills, treatment notes, and a short timeline.
2. Send a written counteroffer of $22,000 with a one-page explanation of damages and treatment.
3. Ask what facts the insurer finds weak; provide clarifying evidence.
4. If insurer still low, propose mediation or an informal neutral review.
5. If you get an improved offer, verify lien obligations and release language before accepting.

Useful Colorado rule and resource

See Colorado civil rules regarding offers of judgment and related procedure on the Colorado Judicial Branch site: https://www.courts.state.co.us/Courts/Rules/rules.cfm?rule_type=civil. For Colorado statutes and legislative materials, visit the Colorado General Assembly: https://leg.colorado.gov/.

Disclaimer: This information is educational and does not constitute legal advice. It is not a substitute for consulting a Colorado-licensed attorney about the specific facts of your case.

Helpful Hints

• Keep communication written when possible — emails and letters create a record.
• Respond to a low offer with facts, not anger; a calm, well-supported counter often brings better results.
• Set internal deadlines for offers so you don’t delay action; make clear when an offer expires.
• Use one-page summaries to make it easy for adjusters or opposing counsel to see your position quickly.
• Ask for itemized explanations when the other side reduces liability or damages — this reveals negotiation weaknesses you can address.
• Understand and preserve your BATNA; sometimes walking away strengthens your position.
• If medical bills are unpaid, ask providers about lien or discount options before settling.
• Before signing any release, confirm how liens and subrogation will be handled or obtain a holdback to resolve them.
• Talk to a Colorado attorney if the case involves large sums, complex liability, or governmental defendants (immunity rules and notice requirements can differ).