Accepting an insurance settlement offer can be extremely appealing if you are fighting a difficult case in court that could last several years and cost you at least thousands of dollars in legal fees every single month.
However, there are a few things you should consider before settling that could help you get a much better outcome in court, especially if you want to avoid receiving less compensation from the insurance company.
Understanding the Basics of an Insurance Settlement
An insurance settlement is a process where a company tries to end a legal battle by offering the victim of an accident monetary compensation for all the damages they received, which can vary depending on the seriousness of this event.
However, most insurance settlement offers will only cover a small portion of the damages you suffered, which is not enough compensation for the destruction of personal property, severe injuries to your body, or financial losses you sustained.
That’s why almost everyone who accepts the first insurance settlement offer regrets their decision once they can’t pay for all their medical expenses and have trouble recovering everything they lost after the accident.
For this reason, most lawyers don’t recommend accepting the first insurance settlement offer from the other party since it is very likely that you can negotiate for higher compensation and get a better deal.
This is especially true if your lawyer can gather all the facts from the case and make a counteroffer to the insurance company with an accurate estimate of the damages you received in the accident.
Factors to Consider Before Accepting a Settlement Offer
There are also multiple factors that you should consider before accepting a settlement offer from any insurance company since they can influence the outcome of the deal and the amount of compensation you get.
In most cases, these factors allow you to gain more leverage during the negotiations and help you significantly increase the amount of compensation they are offering you in the first place.
Unfortunately, in some cases, the insurance company can use some of these factors to make things more difficult for you and prevent you from receiving compensation for all the damages.
These are the main factors you should pay attention to during the settlement process.
Have you completed medical treatment?
Completing your medical treatment is a major factor that could influence the compensation you can receive during the lawsuit, especially if your body needs continuous treatment to heal the following issues.
- Permanent impairment in your body
- Broken bones and internal wounds
- Mental or psychological disorders
- And more
If you made the mistake of agreeing to their first insurance settlement offer, you will be personally liable for all the future medical expenses related to the accident when receiving the money and won’t be able to negotiate a better deal later on.
That’s why your lawyers usually recommend that you wait until you have all the medical records, plus the receipts from the hospital bills, to demand fair compensation for the physical and psychological damages from the incident.
You could even include the cost of prescription medicine you must take during recovery or add the expenses from future therapy sessions to the amount you ask during the negotiations.
Are you partially liable for the cause of your injury?
You also need to consult with your lawyer and verify if you are personally liable for the injuries you received during the accident since that could significantly reduce the amount of money you can obtain from the insurance company.
In this case, the jury will look at the facts from both parties and determine if you were in any way responsible for causing the accident in the first place.
If you are found partially liable for the accident, the jury will decide the percentage of fault you had during this incident, which can reduce the total compensation you want to get, reaching a maximum of 50%.
However, if this amount reaches 51% or more, the court will immediately end the case, and you will lose the only chance to win against the insurance company, which means you will have to pay for everything yourself.
Does the settlement offer compensate you for all damages?
Most insurance companies will offer the minimum amount of compensation they need in their settlement to end the case quickly and avoid losing a lot of money in a lawsuit.
Unfortunately, the compensation they tend to offer the victims is almost always insufficient to cover all the damages caused during the accident, only helping you take care of a small portion of your losses.
One example is if a company tries to pay for the initial medical expenses and the destruction of your property but doesn’t include the following:
- The income or wages you have lost
- Future medical bills from the hospital
- Non-economic damages from the accident
That’s why you must analyze each settlement offer in detail and ensure that the compensation they offer is no less than the total cost related to the damages you received during this incident.
Is the statute of limitations about to expire?
Additionally, you must verify the statute limitations of your case and see how much time you have left before you can submit your lawsuit against the insurance company in the state where you live.
In general, the time limit to file a formal lawsuit will be around two years, which is more than enough to file all the documents you need and proceed with your case without any issues.
However, some states will have a shorter deadline, giving you less time to act on your case and putting you in a difficult spot if you don’t have enough time to move forward with the lawsuit.
If you find yourself in a situation where the statute limitations on your case are about to expire, you should seriously consider settling with the insurance company quickly before you lose your final chance to receive compensation.
Negotiating with Insurance Companies
The next step in the settlement process is to negotiate with the insurance company until you can reach a favorable outcome that compensates you for all the damages you suffered in the aftermath of the accident.
In general, this process may take several weeks or months depending on the type of accident you were involved in and other factors like the seriousness of the injuries you received and their long-term effect on your daily life.
During this time, your lawyer will explain to you what is a reasonable settlement offer for your specific case and provide different strategies that you can use in court to get a better deal from the insurance company.
He will also give you new updates on the case after each negotiation and tell you when to accept a settlement offer to get the best compensation in your case.
Do Insurance Companies Want To Settle Quickly
From the very beginning, the insurance company will try to convince you to take their settlement offer as soon as possible without giving you the chance to analyze all your losses and determine how much compensation you will need.
Only a tiny percentage of settlement offers provided at the beginning by the insurance companies will give you decent compensation for all the damages you suffered from the accident.
Because of this reason, your lawyer will most likely have to go back and forth during the negotiations with the other party to ensure they don’t take advantage of you and trick you into signing an unfair settlement deal.
That’s why you should avoid accepting any settlement offer from the insurance company during the first weeks and get a clear overview of the total losses before settling your case.
What Happens if You Don’t Accept a Settlement?
If you don’t accept the settlement offer from the insurance company, you will not have any problems, but they will try to bluff you into believing they are giving you an all-or-nothing deal.on
Thankfully, you won’t have to worry about them revoking the initial settlement offer or lowering the amount of compensation they are trying to give you at the beginning of the negotiations.
You will always be able to demand more money from them after your lawyer presents more evidence from the accident and proves you are a victim who suffered financial and non-financial losses from this incident.
Problems During the Settlement Process
Once you reject their offer, the insurance company will most likely try different strategies to frustrate you during the negotiations and get you to take the current settlement offer, which has the lowest compensation.
Some might even try to stall for time to destroy evidence from the accident, making it more difficult for you to fight for a fair deal and get a favorable result against them.
If this happens, your lawyer must take action immediately to gain more leverage against the insurance company and protect your case by making copies of the evidence, mentioning their tactics in the hearing, writing formal complaints, etc.
Consult a Personal Injury Attorney Before You Settle
Insurance companies try their hardest to get people to settle for as little possible. That’s why you need an experienced personal injury lawyer on your side. The Legal Help in Colorado team helps people injured in Colorado fight insurance companies so they can obtain the necessary financial means to get better and move on with their lives even in the face of tragedy. Regardless of your circumstances, our team can help. Contact us today and take the first step towards earning justice.