Why You Shouldn’t Take the First Settlement Offer

You may file a claim or a lawsuit if someone injures you in a car accident. Their insurance company may offer you a settlement to avoid going to court. Whether you should accept the first settlement offer depends on the situation. Learn more below, and speak to a car accident attorney in Tulsa if you have questions about your case.

How Do Car Accident Claims Work?

Suppose you are in a serious car accident when another driver hits you from behind at a stop sign. You have broken bones and cuts on your face, as well as a totaled vehicle. If the other driver was at fault, you will likely file a claim with the other driver’s insurance company.

If the insurance company knows its client is at fault, it may offer you a settlement. This sum may be well below what you might get from a jury in a court trial. The idea behind a settlement is you get a certain sum now instead of going through the time and expense of a trial with an uncertain outcome. If you win at trial, you may get more money but might also lose and walk away with nothing.

A settlement also benefits the insurance company. It pays you less than the full case value without going to court. The insurer also avoids the possibility of paying much more at trial. So, an insurance settlement can benefit both the plaintiff and defendant. That’s why most personal injury lawsuits end with a settlement. Only a few personal injury claims ever see a courtroom.

Don’t Accept The First Settlement Offer

First Offer The insurance company may offer you a low initial settlement as negotiations begin. The first settlement offer might be to pay your medical bills and provide a few thousand dollars for pain and suffering. Should you accept the first settlement offer? No. The initial offer is usually only a fraction of what you deserve.

The first offer is only the bare minimum the insurer is willing to provide to settle the case. The insurance company may want to see if you will take the smallest amount of money before speaking to an attorney. A car accident attorney knows how to identify and negotiate what the true value of your claim is.

Why Do They Always Lowball On The First Settlement Offer?

If the insurance company is lucky enough that you accept the first low offer, it’s better for them. The less money the insurance company gives you, the better their bottom line. The insurance company offers a low settlement on the chance that you may accept it and save them money. They bet you probably need money when you cannot work or pay bills, so you may jump at a check for a few thousand dollars.

Use The First Offer As A Basis For Negotiations

Instead of accepting the first settlement offer, use it to negotiate for more money. First, retain a car accident attorney and review any settlement offer you have received. They’ll probably tell you it’s a low offer and to negotiate for more. Your attorney will assess your claim’s proper value and negotiate for more. Usually, the insurance company will move its offer up slightly in subsequent offers.

You and your attorney may rely on the following information to assess the value of your claim:

Future medical and rehabilitation expenses. A serious injury may require months of medical treatment and rehabilitation. Taking the first settlement offer probably doesn’t fully consider these expenses.
Future lost income because of reductions in your earning capacity. You might be partially or totally disabled and unable to earn what you once did. The final settlement should consider how much future income you will lose.
Pain and suffering compensation: A serious injury may cause severe pain and suffering, including mental anguish. You may have pain from the injuries themselves as well as the treatments.

What To Do After Getting The First Settlement Offer

After you receive the first offer, it’s the right time for you and your car accident attorney to draft a detailed demand letter. The letter goes to the at-fault driver’s insurance company. If you believe the settlement offer is too low, you need to ask the adjuster to support their offer.

A demand letter is your opportunity to present your side of the accident, such as how it happened, who caused it, and the medical treatments you’ve had. The letter also describes your prognosis and how your injuries affect your daily life and work. The demand letter should include details on all of these parts of your case and have a dollar figure you will accept to resolve the case.

Is the settlement offer too low? That’s common, but if it’s so low that it doesn’t seem like a serious offer, you need to ask the adjuster to justify their low offer. Ask for a detailed response to each argument you make in your demand letter for compensation, including:

Your description of how the accident occurred, who caused the accident, and why.
The severity of your car accident injuries and damages, including your medical bills, prognosis, and doctor statements.
How the car accident and injuries have affected your life. For instance, you cannot play with your children like you used to or cannot work. The injuries also may cause you mental and emotional suffering.
The amount of money you want to end the claim and settle the matter.

How Much Is A Fair Settlement Offer?

You need to know several things before understanding how much you should get in a settlement. Some things you and your car accident attorney need to know are: Settlement Counter Offer

You are no longer receiving medical care related to your car accident injuries. You have completely healed or have reached maximum medical improvement or MMI. Accepting a settlement offer before reaching MMI is risky; otherwise, you might need more money later for additional treatments. After you sign a settlement offer, the case is closed.
You have a complete understanding of all of the damages related to your injuries. These include lost earnings, lost future income, and mental and physical pain and suffering. Taking a settlement without fully understanding your losses may result in lower compensation than you deserve.
You fully understand the insurance coverage available to pay for your losses. For example, you and the at-fault driver’s auto insurance policy may pay for your losses for a severe injury. The coverage for one policy may be insufficient to compensate you adequately. Or, a truck driver injured you, and both the driver’s and employer’s policies may be available to pay damages.
You and your car accident lawyer calculated your claim and the amount you will take to settle it. A settlement is often less than the full potential value you might receive in a jury verdict. However, there is no guarantee that you’ll win at trial or receive what you expect. The benefit of taking a settlement is you know for sure that you will get that amount of money in less time than a trial.
The insurance company’s offer is fairly close to the thresholds above. If it is far below your minimum demand offer, consider taking the case to court.

Listen closely to what your car accident attorney says about the insurance company’s final offer. They’ll tell you if they think you can get substantially more money at trial and what your chances are of winning. However, you must balance the potential greater payout with the risk of getting nothing at all. Also, getting more compensation in a trial will take longer than a settlement. Can you wait for the money?

How To Make A Settlement Counter offer

You can respond with a counteroffer after you get the adjuster’s first settlement offer. You usually get the best results by putting a counteroffer in writing with supporting arguments, as we stated earlier.

Every case is different, but below is a typical process in a car accident settlement:

The at-fault party’s insurance adjuster makes the initial settlement offer. It is virtually always less than what your case is worth.
You and your car accident attorney respond with a lengthy, detailed demand letter. It should ask for substantially more than the insurance adjuster offered. It also should have a counteroffer and why the evidence justifies the amount.
The insurance company responds with a second offer that may be slightly above what they initially offered. However, it may be outside the range you and your attorney want.
You and the insurance company communicate a few more times. You try to raise the settlement amount, and the adjuster tries to lower it.
You and the insurance company have reached the final offer. The insurance company may say this is the final offer and take it to court if you don’t accept it. Your attorney will advise if it’s worth going through with a lawsuit.
If you settle on the final offer, you sign the liability release, and the insurance company sends a check to your attorney. After attorney fees and expenses are deducted, you receive the balance.
If you don’t settle, your attorney will file a lawsuit and await a court date from the appropriate court.

Your accident claim may not go through all this back-and-forth negotiation, but it’s possible. The claim may take less time to resolve if you have minor injuries that healed in a few weeks. The case may take months to resolve and settle if you have more serious injuries requiring hospitalization and rehabilitation.

Will They Revoke Their Settlement Offer?

If you don’t take their first offer, will they revoke it? Probably not. Rejecting the insurance company’s first offer rarely leads to a revoked offer. It also isn’t usually followed by a lower settlement offer. In most cases, saying no to the initial offer is the first step to ensure you get a fair settlement. Unless they see your claim as without merit, the adjuster probably assumes you’ll reject the initial offer. It’s part of the negotiation game.

The length and complexity of car accident settlement negotiations depend on how severe the injury is, whether the fault is clear, and the amount of available insurance. If you have a severe injury, the case is likely worth more and will take longer to settle. You might also incur many damages, but the available insurance isn’t enough. In this case, you may have to pay the rest out of pocket or file a lawsuit against the liable party for the rest.

A Car Accident Attorney Will Take On The Insurance Company

Contact A Car Accident Attorney Negotiating a fair car accident settlement with the insurance company is difficult without an attorney. Your car accident attorney has extensive negotiating experience and knows the value of your claim. They will anticipate damages you have not considered and know how to prove them. With a car accident attorney, the insurance company may pay a settlement that better reflects your losses.

Your attorney will also navigate the legal process while you heal mentally and physically. The attorney will also handle your case’s daily tasks, including paperwork and communicating with doctors and insurance companies. They are also familiar with insurance companies’ tactics to deny claims and will work to counteract those efforts. If the case doesn’t end in a fair settlement, your lawyer can represent you in court and fight for the best outcome in front of a jury.

Contact A Car Accident Attorney Today

It’s upsetting when you suffer an injury in a car accident and must face the fallout. You have injuries, medical bills, and may be out of work. If another person injured you, speak to a car accident attorney immediately. The attorney will review your case for free and determine if you can receive compensation through an insurance claim or lawsuit. Talk to a personal injury lawyer in Tulsa today at no cost. The lawyer will advise if you don’t have a strong enough case or if you do not require legal assistance. On the other hand, they will inform you if you have a good case and lay out your legal options, including a potential settlement.