If you've been in a car accident, the following days and weeks can be stressful and overwhelming. In addition to dealing with injuries and getting your damaged vehicle repaired, you also have to seek compensation from the at-fault party's insurance company.
One of the biggest questions people often have is whether they should accept the first settlement offer they receive. Usually, the answer is no, as you should always consult a California car accident lawyer before accepting anything in your case.
Table of contents
- What is a Settlement Offer?
- Why You Shouldn't Accept the First Offer
- Reasons Why the First Offer is Likely Too Low
- What to Do If You Receive a Settlement Offer
- When Accepting the First Offer May Be Okay
- Tactics Insurance Companies Use to Minimize Payouts
- The Risks of Settling Too Quickly
- Handling Pressure from the Insurance Company
- Getting Financial Relief While Your Claim is Pending
- The Possibility of Going to Court
- The Importance of Hiring an Experienced Attorney
- Contact a Reputable Car Accident Lawyer Today
What is a Settlement Offer?
First, it's important to understand what a settlement offer is. When you file a claim with the other driver's insurance company after an accident, the insurer will investigate what happened.
If they determine that their policyholder was indeed at fault, they will likely make you an offer to settle the claim. This is a set dollar amount that they are willing to pay you to resolve the case and cover your accident-related damages like medical bills, lost income, property damage, and pain and suffering.
Why You Shouldn't Accept the First Offer
The first offer is almost always a lowball amount. Insurance companies are businesses whose goal is to pay out as little as possible on claims to maximize their profits. They know that many accident victims are eager to get a check and put the whole ordeal behind them. The adjuster may pressure you to accept that first offer, saying it's the best they can do.
However, it's important not to let them take advantage of you. That initial offer is a starting point for negotiations, not a take-it-or-leave-it proposition.
With a few rare exceptions, you should not accept the first offer from the insurance company. Instead, you should work with an experienced car accident attorney who can assess the true value of your claim and fight for the full and fair compensation you deserve.
Reasons Why the First Offer is Likely Too Low
There are several key reasons why that first offer is likely much less than your case is actually worth:
They don't have all the facts yet.
When the insurance adjuster makes an initial offer soon after the accident, they probably don't have all the information to evaluate your claim's value accurately. Your medical treatment may be ongoing, with the full extent of your injuries not yet known.
They may not be aware of all your accident-related expenses or the amount of income you've lost from missing work. They also don't know how the crash has impacted your life regarding pain, suffering, and loss of enjoyment. Without all these details, they can't possibly offer you an appropriate settlement amount.
They're trying to limit their liability.
The insurance company hopes you'll accept a quick, lowball offer so they can close the case and avoid paying out a larger amount later on. If you accept their money and sign a release, you typically can't go back and ask for more if your expenses end up being higher than anticipated. That's why settling before you've reached maximum medical improvement and have a clear picture of your damages is risky.
They're not considering your non-economic damages.
A major component of any car accident settlement is compensation for the subjective, non-monetary ways the crash and resulting injuries have diminished your quality of life. This includes things like physical pain and suffering, emotional distress, disfigurement, and loss of enjoyment of activities.
The insurance company's first offer rarely considers these factors. You'll likely need to negotiate to get a fair amount for these "pain and suffering" damages.
They're hoping you don't know any better.
Insurance companies take advantage of the fact that the average person doesn't deal with car accident claims regularly and has little knowledge of how the process works or what their case is truly worth. They may try to get you to accept that first offer by acting like it's a great deal and the best you'll get. Unless you've handled injury claims before, you might not realize just how much more you can receive with the help of a skilled attorney.
What to Do If You Receive a Settlement Offer
So, what should you do if you receive a settlement offer from the insurance company after an accident? The first step is to consult a reputable car accident lawyer in your area.
Most injury attorneys offer free initial consultations where you can get advice specific to your situation. An attorney can review the details of your case, including the police report, your medical records and bills, and evidence of your other losses. Then, the attorney will give you an honest assessment of what your claim may be worth and how your offer compares.
If you hire a car accident lawyer, they will handle all communications and negotiations with the insurance company on your behalf. This not only relieves a lot of stress but also levels the playing field.
The insurer will know they can't get away with making unreasonably low offers now that you have professional representation. Your attorney will send a demand letter outlining your damages and requesting a fair settlement amount. If the insurer refuses to make an acceptable offer, your lawyer may advise filing a lawsuit.
When Accepting the First Offer May Be Okay
The only time you should consider accepting a first settlement offer is when you have reviewed it with your car accident attorney. Otherwise, doing so is too risky for your future.
Tactics Insurance Companies Use to Minimize Payouts
However, these situations are the exception rather than the rule. In most cases, that first offer will be much lower than you deserve for what you've been through. Insurance companies use all sorts of tactics to try to minimize payouts, including:
- Disputing who was at fault for the crash, even if their driver was clearly to blame
- Arguing that your injuries were pre-existing and not caused by the accident
- Claiming you failed to mitigate your damages by not getting prompt or sufficient medical care
- Downplaying the seriousness of your injuries and losses
A good car accident lawyer will know how to counter these arguments and present strong evidence of the other driver's liability and the extent of your damages.
Through aggressive negotiation, your attorney will work to get you a settlement that actually reflects what you've lost and what you'll need to move forward with your life.
The Risks of Settling Too Quickly
Another factor to consider is that settling a car accident claim too quickly can backfire down the road. Some injuries take time to fully develop, and it may be weeks or months before you experience the full impact of the crash.
For instance, you might think you only suffered a minor muscle strain at first but then experience debilitating pain that requires extensive physical therapy, injections, or even surgery. If you've already accepted a settlement and signed a release, you likely cannot get any additional money from the insurance company for these unanticipated medical needs.
That's why it's generally advisable to wait until you've reached maximum medical improvement (MMI) before settling your injury claim. MMI means that you've recovered as fully as possible, and your doctor doesn't expect your condition to significantly improve with further treatment.
At this point, you'll have a much clearer picture of your total medical expenses, any permanent disabilities or restrictions, and your long-term prognosis. You can then factor all this information into your settlement negotiations.
Handling Pressure from the Insurance Company
In some cases, the insurance company may make a settlement offer very quickly after the accident, before you've even had a chance to get necessary medical care. They may pressure you to accept the money immediately, warning that the offer is only good for a limited time.
However, you're under no obligation to accept an offer on their timeline. It's perfectly reasonable to tell the adjuster that you need to complete your medical treatment before you are ready to discuss settlement. If they keep contacting you, simply let them know you've retained an attorney and direct them to communicate with your lawyer moving forward.
Getting Financial Relief While Your Claim is Pending
If you're worried about how you'll pay for medical care and make ends meet while you negotiate a fair settlement, options are available. Your health insurance should cover any accident-related medical treatment, although you'll likely have to reimburse them out of your final settlement or verdict.
If you have medical payments (Med Pay) or personal injury protection (PIP) coverage on your own car insurance policy, you can also use these benefits to pay your initial bills up to the coverage limits.
If your injuries have caused you to miss significant work, you may get some immediate relief through disability insurance benefits. This can include short-term disability coverage through your employer or a private insurer.
In more serious cases, you might qualify for Social Security Disability Insurance (SSDI) benefits. An experienced car accident attorney can advise you on all the potential sources of compensation and help you access the benefits you need while your claim is pending.
The Possibility of Going to Court
It's also worth noting that the vast majority of car accident cases settle out of court without the need for a trial. However, filing a lawsuit may be necessary if the insurance company refuses to make a fair offer despite your attorney's best efforts.
This does not necessarily mean your car accident case will go all the way to trial, as many claims are settled at some point after a lawsuit is filed. But it does give you additional leverage and sends a message that you're serious about getting the compensation you deserve.
If you do end up in litigation, be prepared for the process to take much longer than an out-of-court settlement. It can take a year or more for a case to get to trial and even longer if there are appeals.
During this time, your attorney will be gathering additional evidence, interviewing witnesses, and potentially hiring expert witnesses to help prove your case. It's important to stay patient and focus on your recovery while your lawyer handles the legal legwork.
The Importance of Hiring an Experienced Attorney
No matter what stage your car accident claim is in, it's best to have an experienced personal injury attorney on your side. Insurance companies have teams of adjusters, lawyers, and other professionals working hard to pay out as little as possible on every claim. You need your own advocate who can level the playing field and fight for the full compensation you deserve.
Look for a lawyer with specific experience handling car accident cases and a track record of success. Read reviews from past clients and look for an attorney with positive testimonials.
Many car accident lawyers operate on a contingency fee basis. This means they only get compensated if they recover money for you. You shouldn't have to pay any upfront fees for quality legal representation.
Contact a Reputable Car Accident Lawyer Today
If you've been in a car accident and received a settlement offer from the insurance company, don't accept it without first speaking to a knowledgeable attorney. A good lawyer will review your case for free and honestly assess whether the offer is fair. If it's not, they'll work to negotiate a better settlement or take your case to trial if necessary.
Remember, once you accept an offer and sign a release, you typically can't go back and ask for more money later. It's important to get it right the first time and ensure you have the resources you need to cover all your accident-related losses, both now and in the future. With an experienced car accident attorney on your side, you can feel confident that your rights are protected and that you're getting the best possible outcome for your case.
If you've suffered an injury in a car accident, contact a reputable California personal injury lawyer in your area today for a free consultation. An attorney can review the details of your case, advise you on your legal options, and fight for the full and fair compensation you deserve.
