How to Handle a Low Insurance Settlement Offer
If you’ve recently been in an accident that caused you severe injuries, you might have already been asked for your statement of the incident from an insurance adjuster. After getting this information from you, the insurance company will decide on a settlement amount to offer you.
The goal for the insurance company is to settle as quickly as possible, but often the first offer is on the lower end of the spectrum.
Here are some things to consider when you believe the insurance settlement is too low:
Be Patient & Don’t Accept the First Offer
With medical bills piling up as you begin the recovery process, getting an immediate check from the insurance company can seem very appealing—no matter how low the offer.
Because the first settlement is usually offered quickly, you probably haven’t had the opportunity to contact a personal injury lawyer or have a complete understanding of the possible long terms effects of your injuries.
If your recovery lasts longer than expected, you could use the entirety of your settlement before being able to go back to work. In that case, money would start coming out of your own pocket for injuries you didn’t cause.
Many insurance companies would like you to think that by not accepting the first offer, your claim could take years to resolve or possibly not settle at all. Don’t let this tactic scare you into accepting a low offer.
It’s important to know that insurance companies intentionally offer a low number first, hoping you might take it, but knowing this number will most likely be the starting point for negotiations.
Be Realistic About the Amount You Expect From A Settlement Offer
While the first offer is most likely too low, and you deserve to receive fair compensation, it is important that you still keep a realistic number in mind.
Understanding the complexity of your case can help you know how large a sum you should expect. Most claims that receive large settlements involve multiple parties or permanent and life-altering injuries.
Keep in mind that two types of damages determine how personal injury claims are calculated— economic and non-economic damages. For economic damages, consider the medical expenses and lost wages resulting in quantifiable costs. This is why keeping a record of everything you spent or lost after the incident is vital–it proves you suffered economic damages and what that price entailed. Non-economic damages are mainly subjective, like pain and suffering, mental anguish, etc. Often a multiplier between one and five is applied to your overall economic damages. You can get a rough estimate of a fair settlement by adding up all your economic damages and then multiplying them by 1 and 5.
Be Prepared to Negotiate
If you decide to reject the first settlement offer, you will then need to begin negotiations with the insurance company. Using the rough estimate you calculated helps you keep a realistic range in mind during this step of the process.
A personal injury lawyer can be vital at this point in the claim, especially if you are dealing with an injury requiring treatment for an undetermined amount of time, such as physical therapy. Lawyer’s have years of experience and can help you determine a realistic number.
A beneficial negotiation tool is to have the insurance adjuster explain the reasons behind the settlement they offered. They will often cite a lack of evidence. If that is the case, you can use the evidence you gathered after the incident to boost your higher offer.
Most claims reach a fair settlement after negotiations, but your case may go to trial if the insurance company is unwilling to make a higher offer. If you haven’t already, it is important to hire an experienced personal injury lawyer who can help you in this process.
A personal injury lawyer is there to support you to ensure you every chance possible at receiving the compensation you deserve.