Image: Businessman talking on his cell phone by a car accident © Stewart Cohen, Blend Images, Getty Images

At first, Justin Lugbill and his wife, Erica, thought the popping sounds were firecrackers. Then they spotted flashes from a gun -- right before they saw a car careering straight toward them.

Luckily, the Chicago couple weren't seriously injured in the head-on collision, which involved more than gunplay (the other driver blew 0.15% on a breathalyzer, nearly double Illinois' legal limit). But the 2010 Volkswagen Tiguan they had just bought was totaled.

The bizarre crash was just the beginning of the Lugbills' problems. The other driver's insurance company refused to offer what the Lugbills considered to be a fair settlement.

"The collision pushed us into four parked cars along the side of the road, but they keep insisting they wanted to give us $900 less than what we paid for the car just two months ago," says Justin, 26, a marketing executive. The crash, which happened in late March, remains unresolved.

Anyone who's been in an accident in which the other driver left your car a mash of ground-up metal can empathize. And, as every ambulance-chasing attorney's TV ads proclaim, someone else's insurance company often fights hammer and tongs to avoid paying a nickel more than it has to.

Though it can be a struggle, you don't necessarily have to end up laying out a chunk of change for a nasty accident that wasn't your doing.

Call the carrier

Job one: Don't stand on protocol and assume the other driver will contact his insurance carrier.

"Definitely call them to start the process. Many drivers do not report accidents for hope that the other driver won't and it will all just go away," says Washington, D.C., attorney Thomas Simeone. Also let your own insurance company know what happened. Not only may "good-faith reporting" reduce your premiums over time (the details are noted in your file and can count toward good-driver discounts), but it can also prove essential if your carrier gets involved in the process later on.

The next step in the fight is comprehensive documentation. Unless they argue that somehow or other their guy wasn't responsible, the insurance company will eventually present you with a settlement based on what they determine to be your car's replacement value before the accident. While that figure may strike you as laughably low, it's usually fairly reasonable, given that depreciation, mileage and even the most minor body dings can substantially shrink value.

"With the advent of the Internet, insurance companies generally can and do perform a pretty exhaustive search for the value of your car," Simeone says.

Do the same legwork on your own. Check the Kelley Blue Book to find the average dollar value for your make and model, taking into account age and other factors. Get additional estimates from other sites, such as, to corroborate the amount. Don't kid yourself: If, for instance, your car had a dented fender or a slightly bent tailpipe, don't slap it into the "perfect condition" category. However, make sure you do get detailed documentation of any recent repairs or work done on the car: Obtain receipts listing the parts involved, prices and any other relevant information.

Shop around

Additionally, says Bill Van Jura, a Poughkeepsie, N.Y., insurance consultant, shop around for a replacement so you can cite a specific car as an example of what you'd accept. Stick within 60 miles of where you live so the insurance company can't argue that prices are affected by different market conditions.

If what you come up with seems fairer than what the carrier offers, present your counterproposal. "Negotiate with them as best you can. They will respond better to negotiations backed by documentation and facts, such as your car had fewer miles or more options, rather than you simply your saying 'I loved my car,'" Simeone says.

It can work. John Wetmore of Bethesda, Md., plowed into a deer several years ago with his 1984 Camry. His insurance company considered it totaled and offered $500. Through careful evidence that he had maintained the car well -- including an itemization of new parts -- the company doubled its settlement to $1,000.

But even thorough arguments can fall on deaf ears. One option is filing a lawsuit to obtain reasonable damages. The natural downside to this, though, is that lawyers are pricey and the expense might not justify a car that's only worth a few thousand dollars. Another cost-effective possibility is small claims court, but that can depend on the maximum claim allowed by your state. For instance, claims as large as $25,000 are permitted in Tennessee. If, however, you live in Massachusetts, your options are a good deal more limited ($2,000 maximum).

Bring in your own people

Now may be the time to get your own insurance company involved. Ask your agent if he or she would serve as an informal advocate on your behalf to persuade the other carrier to loosen their purse strings. Leverage any history as a safe driver and a long-standing policy owner (insurance companies are always eager to hang on to good customers). If you have a strong case, ask your carrier to pursue a claim against the other driver's insurance company through intercompany arbitration. If your carrier does and prevails, the settlement will almost certainly be larger than what the other carrier offered initially.

Also, if you haven't already, provide your insurance company with all the facts and evidence pertaining to the incident. Even if the other driver has insurance, your own uninsured motorist coverage (required in most states) may provide you a better offer.

"If the other driver has insurance, your own company probably could avoid (paying you) for some time," says Eli Lehrer, the head of the insurance project at the Heartland Institute, a free market think tank. "But, provided that the facts are sufficiently clear and the other insurer is just being recalcitrant, I'd suspect that many insurers would, indeed, just pay if you have uninsured motorist coverage."

Your insurance company may also be of help if the other driver's minimal coverage won't cover all damages. Check if your coverage extends to underinsured motorists. With this, you can exhaust the responsible driver's coverage and tack on your own to make up any shortfalls.

Regardless, if you have collision coverage, authorities agree it's always smart to involve your own carrier no matter if the other person's company is cooperating satisfactorily or howling over every penny.

"Your insurance company has a duty to treat you fairly, and it may offer you slightly more money for your car than the other guy's carrier," says Orlando, Fla., attorney Shane Fischer. "If they don't treat you fairly, they know you'll take your future business elsewhere. The other driver's carrier doesn't have that pressure, so they are less likely to care how they treat you."

Repair, don't replace

If a reasonable solution cannot be reached, there's one final option, provided your car isn't already buried in a landfill: Accept the money offered by yours or the other guy's insurance company and use it to pay for whatever repairs are needed to get the car back on the road. It might not be the prettiest ride on four wheels, but it's a cost-effective alternative to buying a new car and possibly being saddled with loan payments.

Says Simeone: "This is helpful for older cars. It's not because it is damaged beyond repair, but because the value of the vehicle is so low, the insurance company can pay less by simply treating it as a totaled car."

The trick is not only getting the car back into sufficient driving shape but making sure it is safe enough to pass a state inspection. To hedge your bets, check with your mechanic first to see if, in fact, reasonable repairs will be sufficient for the powers that be to declare it safely drivable. That way, you avoid wasting money on a car that's simply beyond recovery.

"The biggest challenge in many cases is getting the title back in order," Van Jura said. "This will vary from one state to another. Most companies will provide liability insurance; however, many will not offer physical damage coverage to a salvaged vehicle."

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Above all, don't lose heart. Even if you have to pay your deductible to adequately cover your loss, it beats a penny-pinching settlement from the other driver's carrier or having to shell out a bundle on a pricey new model. But the process can be drawn out and maddeningly frustrating.

"Even if the other driver has insurance and they accept responsibility, it is still a pain to have to deal with a damaged car," Simeone says. "Avoiding a loss can be complicated."