A series of events occur when you’re in a car accident. Among these, you may receive a settlement offer from the insurance company soon after your collision.
It’s fair to wonder whether you should agree to the amount offered, resolve your case, and move on.
In short, agreeing to the first offer is never a good idea without consulting a car accident attorney. A lawyer can provide skilled guidance and determine the best way to handle your claim.
What Is a Car Accident Settlement Offer?
If you’ve never experienced a car accident before, the world of car accident claims is likely new to you. A lawyer will understand the many important aspects of collision claims, including settlement offers.
A settlement offer is just that – an offer to settle your claim. When you’re in an accident with an insured at fault driver, the insurance company will likely contact you to make an offer, hoping you’ll accept it right away.
Offers to settle should cover all of your accident-related expenses, both in the present and the future. However, the initial offer may not cover everything.
Hire a car accident lawyer to review your collision to determine whether the settlement offer meets your needs.
What to Note About Settlement Offers
After a car accident, you likely want to get your money as soon as possible, and accepting the insurance company’s offer may quickly get you there.
The insurance company’s offer binds you once you accept it. This means if you realize later on that you settled for much less than your claim was worth, you have tied your hands and you cannot pursue additional monetary recovery.
Therefore, never act too swiftly. Allow some time for your car accident attorney to review the offer. You can accept it if your lawyer believes it’s fair and adequately covers your losses. Otherwise, following your attorney’s recommendations is best, as they can provide the best path to full and fair compensation.
How the Insurance Company Comes Up With Its First Settlement Offer
Everything begins when the insurance company receives notice of an accident. Once the insurer knows their insured was in a collision, they can assign an adjuster to the claim. Adjusters investigate the accident and determine how much the claim is worth, eventually leading to a settlement offer.
To figure out the value of a claim, adjusters investigate the accident. They’ll talk to their insured to better understand what happened, review police reports, and gather available evidence.
Based on the information they acquire, adjusters calculate the settlement offer. They want to work quickly, which often results in an early settlement.
Insurance companies often succeed in settling claims quickly when they make their initial offers early on in the claims process. For this reason, first offers don’t cover a victim’s damages entirely, as the value of your case may not be clear by the time you receive this offer.
How Quickly Can I Expect to Receive a Settlement Offer?
There is no average time you can expect to receive a first offer. It all depends on the details of your crash and the insurance company handling your claim, among other things.
You may receive a settlement offer within a few weeks after your accident. While this may seem fast, that’s the point many car insurance companies strive to work expeditiously. In other situations, getting a settlement offer from the insurer may take a month or two.
Regardless of how long it takes to get your first offer, review the offer with a lawyer to ensure it meets your needs before committing.
Should I Accept the First Offer the Insurance Company Provides?
You may feel tempted to accept the first offer, but hold off. The insurance company sends you an offer in hopes you’ll be desperate enough to say yes, which is a win for them. They know that once you agree, there’s no turning back.
Unless otherwise stated, there’s no rush to accept or reject a settlement offer. Take your time and have a car accident attorney review it to give their qualified opinion.
Does Rejecting an Offer Limit My Chances of Recovering Compensation?
Insurance companies get away with settling quickly because accident victims worry that if they reject the offer, they’re forfeiting their right to compensation.
Even though it seems scary and stressful to reject an offer, you’re allowed to do so. Just because the insurance company makes you an offer doesn’t mean you have to accept it. This is simply their initial offer. If you don’t accept, they won’t revoke it, meaning they won’t pull out from settling and refuse to make further negotiations.
On the contrary, in many situations, saying no to the first offer is a stepping stone toward better compensation.
Don’t let the insurance company intimidate you into thinking you have to say yes. You have rights and options, including the right to say no and demand a more favorable financial recovery.
Why You Should Refrain From Settling Your Claim Right Away
Perhaps you understand that you shouldn’t be so quick to say yes to the insurance company’s initial offer, but why? The following are just some reasons why you’ll benefit from holding off on accepting the first offer and waiting a bit longer for better compensation.
The Insurance Company’s First Offer is Usually Not Enough to Cover Your Losses
Every accident-related injury and damage has value.
The value of your claim depends on the losses that stem from your collision, including:
- Past and future medical expenses
- Rehabilitation and therapy costs
- Lost earnings
- Lost or diminished earning potential
These are just some common damages car accident victims can recover compensation for. The value of all of these details come together to determine the value of your case as a whole.
In most cases, it takes time to calculate your damages. For example, you may not know the full extent of your medical expenses until you visit doctors and specialists and begin your journey toward recovery.
When the insurance company jumps to make their settlement offer, it’s usually before you know how much your case is worth. When you’re unrepresented and handling your claim independently, the figure the insurer presents may seem fair enough, and the insurance company hopes you’ll say yes without thinking twice.
On the other hand, when you have a skilled lawyer handling your case, they can assign a figure to your claim. If the insurer’s offer doesn’t even come close to covering your losses, your attorney can make the knowledgeable recommendation to pass on the offer and continue pursuing more.
You May Not Know the Extent of Your Non-Economic Damages so Early On
Compensatory damages, or damages that directly compensate you for your losses, are separated into economic and non-economic categories. Your economic damages are those represented by evidence, including medical expenses and lost income. Alternatively, non-economic damages are harder to prove, as they represent intangible losses, such as pain and suffering and permanent disfigurement.
The extent of your non-economic damages is not usually known so early on after an accident. For example, you can recover from a permanent disability, but you may not know you have a disability until you reach maximum medical improvement.
When you settle too quickly, you may miss the opportunity to recover fair compensation for your non-economic damages.
You May Get More Money if You’re Patient
Patience is vital when it comes to collision claims and settlement negotiations.
Insurance companies want to protect their money and avoid paying accident victims what their claims are worth. However, when you stick to your guns and fight aggressively for fair recovery, you give yourself a better chance of receiving the most beneficial outcome.
What to Do After Receiving Your First Offer
If you’ve just received your first offer from the insurance company, consider this the beginning of your negotiations. Instead of responding to your offer, consider the following steps to protect your rights and put yourself in a more favorable position.
Hire a Car Accident Attorney
First and foremost, always start by hiring a car accident lawyer. Never make any decisions regarding a settlement offer without legal guidance.
After your collision, you should schedule a meeting with a local attorney focusing on collision cases as soon as possible. Even if you haven’t received an offer by the time you book your initial consultation, that’s okay – having your attorney ready by the time you receive your first offer can benefit you and save time.
If the insurance company sends its first settlement offer and you’ve yet to retain counsel, make that a priority.
A lawyer is the best ally throughout the life of your claim, from the initial offer and beyond.
Send the Insurance Company a Demand Letter
Unless you receive a fair offer from the insurance company, you may need to take it one step further and send them a demand letter.
A demand letter is a letter your lawyer can draft that includes details of your collision and how the insured is liable.
These details usually include:
- Specifics regarding your collision
- How the insured is at-fault for the accident
- The losses you’ve suffered and how much they’re worth
At the end of the letter, your attorney will demand full and fair recovery representing the value of your case. They’ll also mention that should the insurance company not settle for a fair amount, you have no hesitation in taking further action and filing a lawsuit in court.
When the insurance company’s attorneys receive the letter, they have options. They can either agree to the amount your lawyer has requested, refuse to settle, or deny the amount requested by a counteroffer with a different figure.
Based on the outcome of the demand letter, your accident attorney can determine how to proceed with your claim.
Take Further Legal Action, If Necessary
Sometimes, you must file a personal injury lawsuit to resolve your case and get the compensation you need. Fortunately, your car accident attorney can continue their representation and complete all the required steps.
Filing a lawsuit involves:
- Drafting and filing your petition with the proper civil court
- Serving the other party with copies of court documents to notify them of the pending case
- Waiting for the other party’s response to your claims
- Engaging in discovery, meaning both parties gather evidence to substantiate their claims
Discovery is typically the longest part of a lawsuit. It’s also one of the most important, as it allows both parties to get the evidence and testimony they need for their cases. After discovery has concluded is when most cases settle, if settlement is possible.
Most personal injury cases, like car accident claims, settle outside court. If your attorney feels going to trial is best for your case, they can continue their representation until a judge or jury resolves it.
Time Limits to Keep in Mind
At the onset of a car accident claim, you may not know whether filing a lawsuit will be necessary in the near future. Still, it’s important to plan for it.
A statute of limitations is a law that restricts the time you have to file your case in court. The time you have depends on state law. For car accident cases, states allow one to six years.
When you have the help of an attorney, they can ensure your case is filed and handled timely to avoid any potential issues on your road to compensation.
After a Collision, Discuss Your Case with a Qualified Car Accident Attorney Right Away
The claim and settlement process can be tricky to handle alone. A personal injury lawyer is skilled in handling claims and engaging in settlement negotiations to get the best possible results for their clients.
When you’re in a collision, do not hesitate to consult with an attorney as soon as possible.