Should I Take the First Offer of a Car Insurance Settlement?

After a car accident, getting a good settlement and getting it fast can rise to the top of your priority list in a hurry. You have bills you need to pay. Your medical costs do not get less expensive as time goes on. Worse, you may not have your usual source of income as you recover from your injuries, at least not if your injuries prevent you from going back to work.

Then the car insurance company contacts you, they may offer you a settlement offer.

But should you take it?

Should I Take the First Car Insurance Settlement Offer?

Most of the time, you probably should not accept the first car insurance settlement offer, at least not immediately after the offer arrives. A lot of factors go into determining whether that offer fits your needs.

Understanding the Inner Workings of an Initial Settlement Offer

You get into an accident. You report the accident to the other driver’s insurance company since that driver caused the accident.

Now what?

An initial settlement offer may become more complex than you initially thought and it may not, in many cases, reflect the actual compensation you deserve for the injuries and financial losses you sustained in your auto accident.

First, the insurance adjuster will take a look at the injuries you have claimed and the costs you have experienced. After severe injuries, the adjuster might estimate what those injuries might cost, and you will not even know what the full extent of your medical bills will look like yet. Then, the adjuster will look at the scale supplied by the company.

Frequently, an artificial intelligence platform calculates initial settlement offers based on a percentage of the actual costs you have mentioned.

Suppose, for example, that you suffered a broken leg in your accident. You require surgical treatment, which costs between $17,000 and $35,000 or more. The insurance company, if it issues a settlement offer before you have a chance to recover and get a better idea of what your real costs might look like, might assume that your costs will remain on the low end, at around $17,000.

Its internal scale might suggest that the adjuster should offer around 60 percent of that amount, or $10,200. While the adjuster might have the power to adjust that up slightly say, around $1,000 you might receive a maximum initial settlement offer of $11,000 or so.

Your medical costs could grow much higher than that.

If you accept that offer, you will not get additional compensation for your injuries, even if you suffer further complications as you manage your recovery. You may have immense financial challenges due to that acceptance of a low settlement offer.

Why Should You Negotiate an Initial Settlement Offer?

Taking an initial settlement offer may seem incredibly tempting. After all, that offers the fastest way to get the funds you need in your hands following a serious accident. If you negotiate, you may fear that it will take much longer to get those much-needed funds in hand.

Failing to negotiate, however, could mean leaving money on the table.

1. You may not even know what your full medical costs will look like right after the accident (when the initial settlement offer usually comes in).

If you suffered serious injuries in your accident, including spinal cord injuries, multiple broken bones, or traumatic brain injury, it may take months for you to have a full picture of what your medical bills will eventually look like. You may have increasing costs for months as you go through multiple procedures to help treat your injuries.

An initial settlement offer that arrives within a few weeks of the accident may not reflect the costs you may incur. Your recovery can look very different from anyone else’s recovery. You may have unique challenges and bills, depending on the specific direction of your recovery and the setbacks or complications you experience along the way. Since you cannot know what your recovery will look like, you cannot determine whether that settlement offer accurately reflects the compensation you should expect.

2. An initial settlement offer might not reflect the compensation you really deserve.

In fact, in most cases, the first offer provided by the insurance company does not reflect the actual compensation you deserve for the injuries you sustained in your accident. The insurance company will often try to get ahead of you: to press you to accept a settlement offer before you know how much you need and deserve. Frequently, the insurance company will even try to pressure you to accept that fast offer, rather than giving you time to think about the extent of your injuries and financial losses so that you can reach a more effective decision about the right settlement offer for you.

3. A lawyer may help you get more compensation through the insurance company.

Often, car accident victims accept a low settlement offer because they do not know who to pursue additional compensation on their own. They may find themselves struggling against an insurance adjuster that seems determined to stonewall them, for example, or fighting to prove that they deserve the compensation they have asked for.

Some people even fear that they will end up with less compensation if they try to fight the insurance company.

Most of the time, insurance companies do not provide lower settlement offers than those initial offers. Working with a lawyer can substantially increase the chances that you will get the compensation you really deserve including considerably more compensation than the insurance company offers in that initial settlement.

4. Your lawyer may need time to fully investigate the accident.

Sometimes, disputed liability in an accident can make it difficult for you, as the accident victim, to get the full compensation you deserve.

Other times, shared liability for the accident may mean that you may need to file a personal injury claim against more than one party, which may further complicate the process.

To determine who bears liability for the accident, however, your lawyer may need time to investigate. Depending on the circumstances that led to the accident, investigation can be very complicated. For example, your lawyer may need to look into the policies held by the employer of a driver on the clock who caused an accident or examine the logbooks of a commercial truck driver. Your lawyer may need to check out witness statements, watch video footage of the accident, or even bring in an expert to help recreate the accident based on the damage to both vehicles. All of that may take time.

An initial settlement offer might reflect primarily information from the police report, not from a deeper investigation. A thorough investigation of your accident might reveal that you deserve more compensation than you initially thought.

5. You deserve a fair compensation offer.

Many people assume that the insurance company will issue a reasonable compensation offer, and if the insurance company does not provide that offer, they probably do not deserve additional compensation. However, in reality, you deserve fair compensation for the injuries you sustained.

Not only can a serious car accident lead to high medical bills, it may cause you to lose time at work, face immense ongoing expenses that have nothing to do with your immediate medical bills, and suffer a great deal, especially if your injuries leave you with limitations that impact your ability to engage in your usual hobbies or enjoy time with friends and family. If someone else’s negligence caused your accident, you should not have to suffer in silence or take the financial portion of that burden on yourself.

A fair settlement offer takes into consideration the losses you have faced, including both financial and non-financial losses, and helps you pursue compensation for those losses. While it cannot turn back the clock or fully remove the burdens you may face during your recovery, it can help set you up for future success, give you the funds you need to pursue critical medical treatments, or simply offer tools that can, in general, make you more comfortable while you rebuild.

What to Do When You Receive an Early Compensation Offer

You suffered injuries in a car accident. You reported it to the police and sought medical attention for your injuries. The other driver quickly reported the accident to their insurance company. While recovering from your injuries, you get a call: the insurance company offering you a settlement.

How should you respond?

Keep in mind that any time you talk to the insurance company, you must protect your rights. The insurance adjuster often has the interests of the insurance company in mind, not yours.

1. Avoid verbally accepting an offer.

Do not accept the settlement offer on the spot. You do not have to take an offer immediately, even if the insurance adjuster pressures you to take the offer quickly. Keep in mind that you have plenty of time to look over the offer, think it through, and determine whether it represents the compensation you really deserve for your injuries. You do not have to accept a low offer nor should you.

2. Ask any questions you might have about the offer.

The insurance adjuster probably will not disclose the formula used to calculate compensation, but may answer other questions, like what expenses the insurance company took into account when putting together that offer or whether the other driver accepted full liability for the accident.

3. Insist on time to think it over.

The insurance adjuster may pressure you heavily to accept a settlement offer immediately, rather than taking the time you need to think it over and determine how much compensation you really deserve or how much you might willingly accept. Pushing you to accept a fast offer acts in the insurance company’s best interests, since that offer does not usually reflect the compensation you really deserve. Do not ask if you can have time to think; instead, tell the adjuster that you need time to think it over and will get back to the company.

4. Contact a lawyer near you.

Always talk to a lawyer before accepting any settlement offer. If you already have a lawyer on your side, the lawyer will take care of all negotiations with the insurance company and may even, in many cases, intercept that initial settlement offer for you. Sometimes, however, accident victims do not have adequate time to contact a lawyer before that first settlement offer arrives.

You might not even realize that you need a lawyer until you find yourself looking at a very low offer that just does not reflect the reality of your continuing expenses following a serious accident. If you do not yet have a lawyer on your side, you need to choose one and have them look over your settlement offer.

A lawyer can help advise you about what steps to take next. Often, a lawyer will break down the compensation you should expect for your injuries: the cost of your medical bills, any wages you lost, and any other direct financial losses suffered due to your accident and your injuries. From there, you may get a better idea of what you want to do next, including how much compensation you to ask demand.

Do You Need A Car Accident Lawyer?

Any time you suffer injuries in a car accident, having a lawyer on your side can be incredibly beneficial. A lawyer can give you a much better idea of what the compensation for your specific car accident injuries should look like and how to negotiate to maximize that compensation. Do you have questions about a settlement offer? Contact a lawyer as soon as possible to learn more about your rights.