In most personal injury cases, once they become aware of the accident and the potential claims for damages, insurance companies will act quickly to take charge of the claims process. In many cases, victims of an injury have had little chance to go over what happened or their plan for moving forward when the insurance company calls seeking information about the accident, injuries, and apparent damages.
While it is usually best for an accident victim to consult with an personal injury lawyer before communicating with any insurance company representatives, there might be circumstances in which an individual might be unaware of their right to do so or feel pressured into speaking with the insurer. When this happens, the insurance company may offer a settlement directly to the victim.
You Are Under No Obligation to Accept an Insurer’s Settlement Offer
As a victim of an accident involving personal injuries, you may be unsure what you should or need to do when an insurance company makes you an offer. In many cases, they may first attempt to make the offer to you verbally and then try to persuade you to agree, often in the same conversation. This is problematic for many reasons, but mostly because you will not have had a chance to analyze the offer, think about it, or consider the extent of your losses.
Insurance company representatives may use any tactic available to make it seem as though their offer is your only and final choice. Contrary to what they may want you to believe, you have no obligation to accept their first offer or any offer. You have the right to tell an insurer that you need time to think about it. They may give you a deadline to accept or reject their initial offer, but that does not prevent you from taking the time you need to consider your options and hire an attorney as quickly as possible to represent you and protect your rights.
Reasons Why You May Not Want to Accept the First Offer from an Insurance Company
You might get caught off guard by how quickly the insurer acts on a claim after your injury. They may present you with an initial offer soon after your injury, which can leave you scrambling to figure out what to do next. First settlement offers from an insurer are notoriously problematic and rarely in the best interest of a victim to accept. You must be careful in your communications with the insurance company when they make an offer to you. Do not indicate your satisfaction with the offer or any signs that you are willing to accept the amount they are offering. Take time to weigh your options and evaluate the offer.
It is a low offer?
An insurer will not offer you the maximum damages on your claim right off the bat. The insurance company might hope you take them up on a low offer, saving them time and money. However, the reality is that many people will not accept the first offer. The initial offer is more of a guiding point for negotiations but will not reflect the damages or value of your case.
It is too soon?
When an insurer acts quickly to make you an offer, that should immediately give you pause. Insurance companies that want to close out a claim as soon as possible are doing so for a reason. They are acting in their own best interests. When you have injuries that have not yet healed or have an uncertain prognosis, this can result in further damages that you may not be aware of yet. Insurance companies know what they are doing. When injuries have the potential to be serious, they want to close out your case quickly to avoid having to pay out a higher settlement after you have learned the extent of your injuries.
Do you know how much your case is worth?
An everyday victim of a personal injury may not be able to take into account the extent of the losses they sustain after an injury. While you might consider the obvious intrusions on your life, such as your missed work hours and the medical bills for your care, you may not consider other damages you can recover. Injuries take time to heal, and the impacts on your life from those injuries will reveal themselves to you over time. Making a premature prediction of your losses and accepting an early offer can cause you to face additional financial burdens you cannot recover later.
Do you have an attorney?
Do not decide whether to accept or reject an insurance company’s offer alone—get an experienced personal injury attorney so you make a choice that benefits you, not the insurance company. An attorney can help you determine your damages and negotiate a settlement that includes most, if not all, of your losses.
Do You Need to Reject or Refuse an Offer Immediately?
The insurance company will pressure you as soon as they make you an offer. They will present the offer as a favor or goodwill effort to help you. It is not uncommon for them to ask for or expect an answer immediately. Do not fall for these tactics and stand firm that you need time to consider. You do not have to decide on the spot; even if they give you a time limit of a few days, that is sufficient time to contact a personal injury attorney for guidance.
Can You Pursue Compensation in Your Case if You Reject an Offer?
A common misconception of personal injury victims is that the offer made by an insurer is a take it or lose it decision. Insurance representatives might make it seem that way, and indeed they may decide not to make you a subsequent offer. However, rejecting or refusing to accept an offer is not the end of the line for an injury victim. If an insurance company is unwilling to negotiate the terms of an offer, then they may open themselves up to a lawsuit in court. You have the right to seek the court’s intervention in your case if you can’t agree with the insurance company. When you file a lawsuit, you may then go to trial to allow the judge and jury to decide on fault and damages in your case.
Can an Attorney Negotiate a Better Settlement for You With the Insurer?
There is no guarantee that an attorney will get you the maximum compensation in your case or get you the outcome you want. However, having a personal injury attorney represent you from the beginning of your case will give you a significant advantage. You are more likely to get a favorable resolution that more closely aligns with your losses with a lawyer at your side, than the outcome you would face without one.
What Happens if You Accept the Insurer’s Offer?
The moment you formally accept an offer by the insurer, they will move forward to pay out the claim. This will effectively end your claim for damages. The insurance companies’ liability to you is complete once they receive an acceptance of their offer. After payment of that offer, they will no longer owe you anything for any losses, even if the losses appear to be much greater after the close of the claim.
Therefore when you accept an offer, you need an accurate estimate of your losses so they do not catch you by surprise if your accident causes new issues.
Factors That Can Influence the Compensation an Insurance Company Offers
Often, victims want to know what makes the difference in compensation between one case and the other. The truth is that no two personal injury cases are the same. When an insurance company makes an offer of settlement, they will consider different factors to determine what they will offer you for your losses.
The adjuster will not necessarily offer compensation for all of your losses, as they want to save their company as much money as possible. Instead, they will offer you a settlement based on the accident’s facts and the damages as determined by their internal formula to close out the claim as quickly as possible.
Your damages are not an arbitrary number. It is a calculation based on the losses you have and will experience due to the accident. While the insurance company may not inform you of all the damages you may seek under the law, your attorney will.
Damages in a personal injury case may include:
- Medical costs
- Income losses
- Pain and suffering
- Property damage
The Fault Determination by the Insurer
The percentage of liability that an insurance company accepts will depend on the fault determination made based on their investigation of the accident and who’s actions amounted to negligence. Who is at fault and whether there are multiple parties that share liability in the accident will influence the amount of compensation an insurance company will offer in a settlement.
Whether the Insurer Will Go to Court
An unpredictable variable that can also influence the amount of compensation is whether the insurer is willing to take the dispute to court. In some instances, with significant damages, an insurance company is more inclined to take the risk of letting a court determine the damages than risk losing too much money for their company.
In most cases, however, the insurer wants to avoid litigation as this can add significant costs to the case, and they are at risk of having to pay more damages than they expect.
What Happens After You Reject an Insurance Company’s Offer?
You may have already rejected the insurance company’s offer, and you may be unsure of what will happen next. If you can consult with an attorney before making an official rejection of the offer, it can help your case. However, if you already notified the insurance company that you will not accept their offer, a lawyer can help you negotiate the best possible outcome on your behalf.
After an offer rejection, you have the opportunity with your attorney to present the insurance company with a counteroffer that better reflects the extent of your losses. The insurer will then consider your counteroffer and communicate whether they are willing to accept the terms.
Negotiations for a Settlement
In most instances, following the rejection of an offer or counteroffer, both sides of the insurance claim, the victim, and the insurance company will enter negotiations. Your attorney will provide the insurance company with information about your damages and present evidence to negotiate a settlement that will best benefit you.
Reach an Agreement or Move Forward with a Lawsuit
In most personal injury cases, the parties will come to a reasonable agreement, and they can settle the case outside of court. In some cases, however, an agreement might not be possible. If you cannot settle, the next step is for the victim’s attorney to file a lawsuit in court against the insurance company.
If you are a victim of a personal injury, contact us to schedule a free consultation in your case. Even if the insurance company has already made you an offer, a lawyer can help you protect your rights and fight for the compensation you deserve.