You may get a lot of information about settlement offers following a car accident. Actually, settlement offers could hit the top of your list of things to think about, talk to a lawyer about, and even discuss with friends and family. Figuring out what a good settlement offer looks like, however, can prove complicated.
How do you know you have received a good offer? When should you accept an offer, and when do you need to dig in and negotiate harder or even take a claim to court in the quest for compensation?
Obviously, talking to a lawyer offers your best opportunity to determine whether you have received a good settlement offer, since a “good offer” may depend on who you are, what injuries you sustained, and what losses you have because of your injuries. However, this guide can give you a better idea of what you should expect when you receive a settlement offer after a car accident.
What Exactly Is a Settlement Offer?
When you get into a car accident, you will submit a request for compensation through the insurance company that covers the liable driver. In an accident that causes only property damage, that means a request for compensation for the damage done to your vehicle.
Many people have handled those types of claims in the past: you go to a mechanic accepted by the insurance company, get a quote on the work to repair your vehicle, and then the insurance company offers payment, generally for the full amount of the repairs. Often, people choose to have the insurance company pay the mechanic directly to streamline the process.
When you suffer injuries in a car accident, on the other hand, the process may look a little more complicated.
First, you need to know what your medical bills will look like. Once you have a solid idea of what your recovery will cost, financially speaking, you can submit a request for compensation to the other driver’s insurance company. This demand package includes all the financial losses you have suffered because of the other driver’s negligent actions on the road.
The insurance company will take a look at your demand package and, in most cases, issue a settlement offer. Frequently, that settlement offer represents a percentage of the costs you have submitted, often determined by an automated program. In fact, in many modern insurance companies, the insurance adjuster has little control over the initial settlement offer.
If you accept the settlement offer, it concludes the insurance company’s financial obligation to you for that specific accident. Even if your medical costs climb higher than you thought, you cannot return to the insurance company for more money.
Does a Settlement Offer Reflect the Real Worth of My Claim?
An initial settlement offer from the insurance company frequently does not reflect the full value of your claim. Actually, in many cases, the insurance company will start with an offer that includes a small percentage of your medical expenses.
Suppose, for example, that you suffered a broken leg in the accident. The average cost to treat a broken leg surgically can cost between $17,000 and $35,000 if you do not carry insurance.
Suppose that the insurance company’s platform offers 60 percent of the damages you demand in compensation for an initial settlement. If you spent $20,000 on treatment for your broken leg, not including the cost of your lost wages and any compensation for your pain and suffering, the insurance company might offer you around $12,000 in compensation, leaving you with $8,000 in additional medical expenses that you will have to pay out of pocket.
In those cases, the settlement offer does not reflect the full worth of your claim. The settlement offer may reflect only a small percentage of the compensation you deserve for your injuries.
Always consult an attorney after a car accident involving any type of injuries, or a car accident involving severe property damage. An attorney can give you a better idea of how much compensation you should expect for your injuries, what tactics the insurance company may use to try to minimize the compensation it has to pay out, and how to negotiate for the compensation you really deserve.
What Is a Good Settlement Offer?
A good settlement offer for your car accident injuries may vary depending on the circumstances that led to your accident, what injuries you suffered, and what financial losses you have faced due to the accident and your injuries.
Take a look at the factors that may contribute to a settlement offer and how to determine whether you have received a reasonable offer for your injuries.
Who caused your accident (and what, exactly, does that party’s insurance policy cover)?
Determining how much compensation you deserve through your settlement offer starts with a look at who caused your accident. Some drivers carry better insurance policies than others. Minimum auto insurance in Texas, for example, offers up to $30,000 in protection for any single individual injured in an accident, while minimum Louisiana auto insurance offers $15,000 in bodily injury protection for a single individual injured in an accident.
Some drivers may carry more than minimum auto insurance. Rideshare drivers, for example, often have high-value insurance policies through their companies when they actively have a passenger in the vehicle.
Commercial drivers also typically carry higher-value policies than the average passenger vehicle driver. Other drivers may simply choose to carry better-than-minimum coverage, often because they want to have additional protection if they cause an accident that damages their vehicles.
The other driver’s insurance coverage will often determine the limits of the compensation you can recover. A car accident lawyer can help look over the terms of those policies and give you a better idea of how much compensation you deserve based on the policy and the losses the accident caused you.
What coverage do you carry?
Both Texas and Louisiana offer the option to carry MedPay coverage that can help protect you in the event of a car accident. MedPay coverage provides compensation for the initial medical bills you may face after an accident. It kicks in regardless of who caused the accident, which makes it extremely valuable for many drivers.
However, if you carry MedPay insurance, you may need to take those coverage amounts into account before determining how much compensation you can pursue from the other driver’s insurance company. Suppose, for example, that you faced $20,000 in bills from your broken leg, as discussed above. You have MedPay coverage that offers $5,000 in protection. You can, therefore, claim $15,000 in compensation from the other driver’s insurance company for your medical bills.
Keep in mind that MedPay insurance offers valuable coverage and compensation. You may need that immediate assistance paying your medical bills, especially if you sustained severe injuries in the accident. MedPay coverage helps cut down on the additional costs and challenges you may face while recovering from your injuries.
What injuries did you sustain, and what did your medical treatment cost?
Once your lawyer has an idea of what insurance coverage you can use to claim compensation for your injuries, and what limits those policies offer, he can start calculating the damages you sustained.
Medical bills usually make up the largest loss you will face due to your car accident and, as a result, the largest portion of your car accident claim. Medical expenses can prove immense, especially after severe injuries.
A fair settlement offer should take those medical costs into account. Your lawyer may recommend that you wait until you know what those eventual medical costs will look like before you move forward with your car accident claim or accept a settlement offer.
In some injuries, including severe ones like traumatic brain injury, spinal cord injury, burns, or amputations, you may need months before you know what your eventual recovery will look like and, as a result, how high your medical bills will grow.
Talk to your lawyer about all the medical expenses associated with your recovery. Where possible, track your bills directly so that you can provide evidence of exactly how much you have spent on that vital medical treatment.
Keep in mind that all medical costs related to your injury may apply, so you can claim compensation for:
- Emergency medical treatment
- The cost of any procedures associated with your treatment
- Long-term medical care
- Physical therapy
- Occupational therapy
- Durable medical equipment
A fair settlement offer will include a look at all of your medical expenses, including compensation for many of the direct expenses you have faced because of your injuries.
How much time did you have to miss at work because of your injuries?
Dealing with serious injuries can also mean contending with serious time off work. Sometimes, that means your injuries completely prevent you from working: you need to remain in your hospital bed, focused on your recovery. Other times, you may have ongoing pain or limitations that prevent you from completing your usual responsibilities.
Your employer might want you to stay out of work until you can safely enter the floor. You might need to alter your job responsibilities so that you can spend less time at work while you recover. You might miss a lot of work for appointments, including therapy. The more time you have to miss at work, the more those lost wages may hit and the more financial struggles you may have because of that lost income.
As your lawyer puts together your demand package, he will take into consideration the wages you lost due to your injuries. A fair settlement package will also include compensation for your lost income, whether that means lost wage due to inability to work while you recovered or lost earning potential because you lost your ability to work in your industry or your current role due to your injuries.
What other suffering did you face because of your accident?
A fair settlement offer does not just take into account the direct financial losses you had to deal with because of your accident and your injuries. It also takes into consideration the suffering you had to face things that may not have a direct financial correlation, but which do have an immense impact on your life.
Talk to your lawyer about the full impact of your injuries. Have you had a hard time dealing with the emotional weight of your new limitations? Have you suffered substantial physical pain? Have you missed out on many of the activities you once enjoyed or even lost your enjoyment of life because of the limitations associated with your injuries?
A fair settlement offer will consider those elements. While a financial settlement offer cannot restore your enjoyment of life or give you back the things you have lost, it can provide you with the funds you need to rebuild and for many accident victims, that may make it easier to move forward with life.
What Should You Do if the Other Driver’s Insurance Company Offers a Settlement?
Settlement offers can vary. If you have not consulted a lawyer about your car accident, you may not know whether or not the insurance company has issued a fair offer. Not only that, you may not even know what a fair settlement offer really looks like.
If you have not contacted a lawyer before you receive a settlement offer, have a lawyer look over that offer before accepting. A car accident lawyer can help you determine whether the insurance company has issued a fair settlement offer and how that offer compares to the financial losses your accident has caused. Furthermore, if needed, a lawyer can help you negotiate with the insurance company for further compensation, based on your actual losses.