Should I Accept the First Insurance Settlement?

July 3, 2024 |
Should I Accept the First Insurance Settlement?
lawyer offering pen for client to put signature on agreement,

You may have the opportunity to pursue fair compensation when an accident injures you. Depending on the circumstances, you might file a third-party insurance claim with the at-fault party’s insurance or a first-party claim through your own insurer.

Dealing with insurance companies can be tricky, so knowing what to expect is important. After filing your claim, the insurance company may send you a quick first settlement offer.

Although accepting the first settlement offer may tempt you, hold off and let a Tampa car accident lawyer review it to determine how to proceed.

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Filing an Insurance Claim After an Accident

Following an accident, you may have the option to file an insurance claim to seek proper compensation for your injuries and losses. Insurance claims are often available for car, truck, and premises accidents.

After an accident, when you file your claim, the insurance company assigns an adjuster. The adjuster investigates your accident, gathering information and details to determine the collision's severity and the extent of your losses. They will either approve or deny your claim based on their findings.

During the claims process, the insurance company may come back with a quick first settlement offer. It may seem too good to be true, and in most cases, it is.

Understanding Insurance Company Strategies to Undervalue Claims 

Among the many essential things to know about dealing with insurance companies, one of the most important is this: the insurance company is not on your side. Even if you’re dealing with your own insurer, always remember that insurers are not looking out for your best interests - they’re looking out for their own.

Insurance companies are in the business of making money. Not only do they want to make money, but they want to keep their money, too. For this reason, insurers aren’t running to pay claims right away.

Instead, they’ll employ several tactics to undervalue your claim, limit their liability, and avoid paying out what your claim is truly worth.

Some of the more notable insurance company strategies you should look out for include:

  • Requesting recorded statements: The insurance company may ask for a recorded statement, allowing you to provide your side of the story. While it may seem innocent, they’re actually trying to see if you say something they can eventually use against you to harm your claim. 
  • Downplaying your crash injuries: The adjuster can assert your accident-related injuries are not as serious as you claim. If they get ahold of your medical records, they might try to claim your injuries are related to existing medical conditions to try to avoid paying you for your collision injuries. 
  • Delaying your claim: It’s common for insurers to delay your claim, hoping you’ll tire and settle for any offer they present to you. 

Additionally, one of the most-used tactics is the quick first settlement offer. Many accident victims fall for this tactic, thinking the insurance company is looking out for them and being “nice” by offering to settle quickly when that’s not the case at all.

The First Settlement Offer from the Insurance Company

First and foremost, it’s helpful to know what an insurance settlement offer is. A settlement offer from the insurance company represents the amount of money the insurer will pay you to settle your claim. Once you agree to settle, your claim is over and resolved.

Insurance companies often make their first settlement offer after they’ve assessed the claim. Still, they try to investigate and provide an offer as quickly as possible. Insurers hope that accident victims won’t want to engage in a lengthy process and just want to settle hastily. In many cases, this tactic is successful, especially for victims that go unrepresented.

Why It’s Not Usually a Good Idea to Accept a First Settlement

After suffering injuries in an accident, the last thing you likely want to do is handle an insurance claim, as they can be stressful and confusing. Even so, never rush through the process. The insurance company’s first settlement may seem great, but accepting it without fully evaluating the offer can have detrimental consequences.

First Settlements are Typically Low

Your first settlement offer might not be nearly as much as your case is actually worth. Insurance companies usually take the first settlement offer to test the waters. 

And, when an accident victim doesn’t know anything better, they believe they need to accept the offer; otherwise, they won’t get anything out of their claim. In reality, a skilled personal injury attorney can try to negotiate for a better offer.

You Don’t Know How Much Your Claim Is Worth

Insurance companies usually send the first offer very early on in the claims process. This is not by accident.

Very soon after your accident, while your claim is still new, you haven’t gotten to the point where you know how much your claim is worth. You may not know the full extent of your injuries, you might not have all your medical bills, it may be unclear how your injuries will affect your life, and so on.

Settling your claim too quickly can result in you receiving much less than you might have received had you negotiated and waited a bit longer.

Your Injuries May Be More Serious Than You Initially Believe

Sometimes, it takes a while to grasp the full extent of your injuries. Injuries may worsen or complications from your injuries can arise. When you settle your claim too fast, your settlement won’t account for this. Therefore, you may need to deal with the financial burdens of your injuries on your own.

Misconceptions Concerning First Settlement Offers from Insurers

You will likely believe some common misconceptions if you're unfamiliar with insurance claims and first settlement offers. These misbeliefs can lead you to accept your first settlement out of fear and concern.

This is Your Only Opportunity to Receive Compensation

Many accident victims believe the first settlement offer is the only one. This isn’t the case at all. Even if the first offer doesn’t suit your needs, you still have the chance to pursue a better settlement. In some cases, you may have the opportunity to seek financial recovery by filing a personal injury lawsuit.

You Can’t Get More than What’s Being Offered

It’s normal to worry that the dollar amount in your first settlement offer is the best the insurance company will do. In reality, you may receive multiple settlement offers from the insurer throughout the claims process.

If You Reject the Offer, Your Claim is Over

Often, accident victims rush to accept a first settlement, thinking rejection is not an option. You can surely reject an offer from the insurer and continue with your claim.

Rejecting the first offer doesn’t signify the end of your claim. Instead, your claim will proceed, and you’ll have more opportunities to pursue a settlement that better suits your financial needs.

The Issue With Accepting a Settlement Offer Too Soon

stressed woman with paper sheet at home.

Accepting a first settlement can create multiple issues. However, the biggest issue with settling your claim too quickly is surrendering your right to further compensation.

Accepting a settlement offer is meant to benefit you and the insurance company. You cannot receive your money without first signing some documents, including a waiver. By signing the waiver, you’re agreeing to give up your rights to seek more money for the same claim.

So what does this mean? If you settle your claim too early and later figure out you should have settled for much more, you’re left without any options. You’ve already received your settlement check in return for signing the waiver and resolving your claim.

It’s critical not to act so hastily. Take your time, consider what’s being offered, and allow a knowledgeable injury attorney to examine your offer and negotiate on your behalf.

Details to Consider Before Accepting Your First Settlement Offer

When you receive your initial settlement offer, you should always evaluate it thoroughly. Part of this involves asking certain questions. Based on the answers, you can better determine whether the offer is worth your attention.

When assessing your settlement offer, consider:

  • The severity of your injuries
  • Whether you’ve reached maximum medical improvement or are still in the process of recovering
  • Whether you’ve missed work and will continue to miss work due to your accident injuries
  • The total of your financial expenses and losses to date
  • Insurance policy limits

These and other details can give you a better idea of the fairness of the offer and whether it’s something you should consider. A personal injury attorney can determine how best to proceed with your settlement offer based on the circumstances and their qualified opinion.

Determining the Value of Your Claim

Before accepting any settlement offer, it’s key to understand your damages. Determining how much you can and should demand from the insurance company is essential in helping you obtain the fairest possible payout.

Your damages provide compensation for your accident-related injuries and losses, but monetary and non-monetary.

Damages you might receive include:

  • Present and future medical expenses
  • Rehabilitation and therapy costs
  • Property damage
  • Lost income due to time off from work
  • Diminished earning capacity if you’re unable to return to your previous occupation
  • Emotional distress
  • Pain and suffering
  • Loss of enjoyment of life
  • Scarring and disfigurement

Certain factors help assign a dollar amount to your case, including:

  • The severity of your injuries
  • The total cost of your medical treatment
  • Whether you’ll require medical care in the future
  • How your accident and injuries have affected you mentally and emotionally
  • How your injuries have impacted your life and lifestyle

Knowing the true value of your case is one of the best tools, helping ensure you don’t settle your claim for much less than it’s worth. An injury attorney can do everything necessary to assign a proper value to your case and pursue beneficial financial recovery.

What to Do if You Receive a First Settlement Offer from the Insurance Company

You may not know how to proceed if you receive a first settlement offer from the insurance company. The whole process can confuse anyone, and you don’t want to act too quickly and forfeit your right to better compensation. Approach the situation carefully and get the legal support you need.

Don’t Accept it Right Away

Seeing the dollar signs on your settlement offer may motivate you to want to sign on the dotted line and accept. However, you should never immediately accept the first offer without thinking about it. Accepting too quickly can negatively impact the success of your claim.

Consult a Personal Injury Attorney

Don’t do anything without first speaking with a personal injury lawyer. Sometimes, the insurance company sends you their initial settlement offer so quickly that you don’t even have legal representation yet.

While you shouldn’t sit on the offer for too long without responding, you also have enough time to consult a personal injury lawyer.

Negotiate for a Better Settlement

Depending on the offer, you may need to negotiate with the insurance company for a better settlement. When you have an experienced personal injury lawyer on your side, they can negotiate on your behalf to get you a just settlement.

lawyer or attorney shakes hands to agree on the client's offer to be hired to fight the parties in court

If an accident injures you and you file an insurance claim, the insurer may employ their well-known tactics, including the quick first settlement. When you receive a speedy initial settlement offer, do not accept it immediately. Instead, schedule an appointment with an experienced personal injury attorney.

A personal injury lawyer can provide much-needed guidance and advice and work diligently to get you the settlement you deserve, whether it is through your insurance claim or by filing a lawsuit. Having an attorney on your side can yield much better results.

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