Being involved in a serious accident can be a traumatic experience. From coping with physical injuries to the emotional toll it takes, an accident can be a lot to deal with and recover from. On top of that, accident victims must navigate the insurance claims process to secure compensation for medical bills and other damages. When filing an insurance claim, you may wonder: “Should I take the first offer of a car accident settlement?” Below, our Los Angeles personal injury lawyers discuss whether you should accept an insurance company’s first settlement offer.
Should I Take the First Offer of a Car Accident Settlement?
The short answer to whether you should accept the first offer that comes your way is that more than likely, you should not take it. Why not? A few reasons include:
The Offer May Not Reflect the Full Value of Your Accident Claim
Insurance companies are for-profit businesses. Because of this, it is unfortunately common for an initial settlement offer to be much lower than what your claim is likely worth. It is not in the best interest of the insurance company to propose a fair settlement offer that accurately reflects the total value of your claim on the first go-round. Instead, minimizing insurance claim payouts is in the best interest of the insurance company.
The first offer from an insurance company is generally based on the lower end of a preliminary evaluation of damages and the insurance company policy limits. It will likely not account for future costs associated with the car crash, like future medical costs. In addition, the offer from the insurance company will likely not account for your non-monetary damages.
Unfortunately, a claimant may be unaware of the full extent of their rights or the value of their personal injury claim. They may accept a low settlement offer to move on from an accident. However, you do not have to take the first offer from the insurance company. The initial offer is typically a negotiation starting point rather than the final settlement value.
Your Injuries May Be More Serious Than They First Appear
Another critical point to remember is that the full extent of your injuries may not be immediately apparent. Specific accident injuries, such as whiplash, concussions, and internal bleeding, can take days to manifest. Additionally, complications later in your recovery journey could arise. For example, you may need more medical treatment than initially thought, infections could develop, or rehabilitation may take longer.
Accepting a settlement offer too soon may leave you paying out-of-pocket for medical expenses. Generally, we do not recommend accepting a settlement agreement from an insurance company until you know the full extent of your injuries. Ideally, you should reach a point known as maximum medical improvement (MMI) before settling.
Maximum medical improvement is when your condition stabilizes, and doctors can reasonably predict what future medical care you may need. Reaching MMI ensures your settlement includes adequate compensation for all medical costs.
What to Know Before Accepting a Personal Injury Settlement Offer
When faced with whether to accept a settlement offer from an insurance company, it is essential to understand a few critical points about insurance settlements and your case. These points include:
1. You Can Reject a Settlement Offer and Still Obtain Compensation for Your Damages
As an accident victim, you may be unaware that you have the right to reject a settlement offer from an insurance company. The misconception is that turning down the initial offer will leave you without recourse or compensation.
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However, rejecting the first offer does not mean you will get nothing for your damages. In most cases, the first offer is insufficient to cover your expenses. Because of this, you should be very wary about accepting a first offer from an insurance company. Instead, you should use it as the beginning point of settlement negotiations.
When you reject a settlement offer, you should explain why the amount offered is not acceptable. Explain your reasons clearly. For example, perhaps the offer does not cover all your lost wages, medical costs, or fails to acknowledge your pain and suffering. Detailing your reasons can establish a strong position for subsequent negotiations.
2. The Insurance Adjuster Has Authority to Offer More Money
Insurance adjusters usually have the authority to negotiate up to a certain limit for a claim. When they offer you a settlement, they may tell you that the amount is all they can pay. However, remember, the first offer is often well below this limit, giving them a buffer for negotiation.
Unfortunately, the insurance company will not tell you how much they can offer. However, you can expect negotiations to go back and forth for a while.
3. You Can Issue a Counteroffer
When you receive a settlement offer from the insurance company, remember that it is just the starting point for negotiations. You have the right to make a counteroffer that reflects your assessment of the value of your claim. A counteroffer can help you move closer to a fair settlement amount that compensates you for your losses.
We recommend working with a personal injury attorney to help you during the claims process and handle negotiations with insurance companies on your behalf. Your attorney can put together a compelling demand letter for you that includes justifications for the amount.
4. The Total Cost of an Accident Is More Than Out-Of-Pocket Expenses
Many accident victims focus solely on monetary losses after an accident, like medical bills, car repairs, and lost wages. However, the actual cost of an accident can be much higher, going beyond immediate financial impacts.
Non-economic damages are also common in personal injury cases. Non-economic damages include the non-monetary losses you have incurred due to the accident. Examples of non-monetary damages include, but are not limited to:
- Physical pain
- Emotional distress
- Post-traumatic stress disorder (PTSD)
- Disability Loss of quality of life
In most cases, the original offer from the insurance company will not include any financial compensation for non-economic damages. However, a fair offer should include compensation for both monetary and non-monetary losses incurred from the accident.
5. Insurance Companies Want to Avoid Litigation
Insurance companies have a vested interest in resolving personal injury claims without going to court. In addition to avoiding a time-consuming and expensive process, settling a claim can help mitigate their risk exposure. By reaching a fair offer, insurance companies can close the case and move on without the risk of potentially larger jury verdicts.
Recognizing that the insurance company wants to avoid litigation places you in a position of power during settlement negotiations. By understanding its motivation to settle, you can confidently approach the negotiation process when considering whether to accept an offer.
6. The Statute of Limitations Can Affect Your Case
One of the most empowering aspects of an accident claim is that, to a large extent, you control the timing of when you settle. That being said, understanding how California’s accident statute of limitations affects your case is crucial to protecting your claim.
A statute of limitations is a time limit or deadline for filing a claim or lawsuit. In California, the statute of limitations for personal injury claims resulting from car accidents is generally two years from the date of the accident. In the event of wrongful death, it is two years from the date of death. There are rare exceptions to this deadline, but typically, it is two years.
If you fail to file a claim or lawsuit within this timeframe, you lose your right to pursue compensation. Therefore, it is vital to ensure you do not miss your window to file. Additionally, you want to give yourself plenty of time to file a lawsuit, if needed, if the insurance company does not offer you a fair settlement.
7. Anything You Say Can Be Used Against You During Negotiations
When engaging in negotiations with an insurance company, it is important to remember that anything you say can potentially be used against you. Insurance adjusters are trained to gather information that may be used to minimize your claim’s value.
Therefore, it is crucial to be cautious about what you say and how you say it throughout the negotiation process with the insurance company. Stick to the facts, avoid speculating, and avoid admitting fault. Even something as seemingly innocent as “I am fine” could be used by insurance companies to minimize your injuries. Remember that you are not obligated to provide detailed information beyond what is required to evaluate your claim.
You should also avoid discussing your case online or posting content that may be misinterpreted and used against you during negotiations. In today’s digital age, an insurance company can and will use social media to gather information about claimants. The insurance company may scrutinize your posts, photos, and even comments from friends and family to search for any inconsistencies or evidence that could undermine your claim.
8. Settlement Agreements Are Final and Binding
Settlement agreements include a release of liability. What does this mean? When you sign a settlement agreement, you essentially waive your right to pursue any further legal action or compensation related to the accident from the at-fault party or their insurance company.
Even if your injuries result in complications or your damages are more extensive than previously thought, the agreement you sign is final. Therefore, you should ensure that the settlement covers all past and future costs associated with the accident. Once you sign, you cannot return later and request more money for medical costs or take the case to court.
How Can a Personal Injury Attorney Help You With Your Claim?
Deciding whether to accept an accident settlement is a significant decision. Before accepting an offer, it is essential to have a clear understanding of your legal rights, the true cost of the accident, and your future needs.
For example, what are your financial needs due to the accident? How has the car crash impacted your quality of life? Will you have future medical costs? Have you faced physical or emotional trauma that needs to be acknowledged and compensated? Having clear goals can guide you in the negotiation process.
We recommend working with an experienced personal injury lawyer to ensure you obtain fair compensation for your damages. A personal injury lawyer can ensure you do not accept an offer that leaves you with out-of-pocket expenses. Your attorney can help you assess the true value of your claim. More so, your attorney can handle all communication with the insurance companies on your behalf and fight for a fair settlement.
As we have discussed, the first offer rarely reflects the true value of your claim. A fair settlement often comes much later in the negotiation process, sometimes only after multiple rounds of negotiation with the insurance company.
While most cases settle outside of court, sometimes insurance companies do not provide adequate settlements. In this case, your attorney can file a lawsuit against the insurance company, taking them to court. Your personal injury lawyer can litigate your case, fighting for your right to compensation.
Schedule a Free Consultation With Our Los Angeles Accident Lawyers
Has the insurance company offered you a quick settlement after a serious car accident? Before signing any offer, we recommend consulting with a Los Angeles personal injury lawyer from our firm. We can review your situation and help you understand whether the offer is fair for your case.
At the Law Offices of Steers & Associates, our personal injury lawyers help Los Angeles and Southern California accident victims obtain fair compensation for their injuries and damages. If you have suffered serious injuries in a California car accident, consider reaching out to us. We may be able to help you recover compensation for medical costs, lost income, and other damages.
During a free consultation, we can discuss your legal options and whether we can help you with your case. Call us at (800) 824-5416 or contact us online to get started with your case.
Allen Vaysberg practices personal injury law and works tirelessly to defeat the tactics of insurance companies and large corporations who try to deny justice and fair compensation to injured people.