What Happens When You Reject an Insurance Settlement Offer?

An insurance settlement offer is a financial agreement between an insurance company and a claimant to resolve a claim for losses or damages. It is a lump sum of money that covers lost income, medical bills, and other costs.

More often than not, these companies try their best to reduce costs and liabilities. They will give a lowball settlement offer that doesn’t cover all your losses and damages. The insurance company’s first offer is often a starting point for negotiations and is not mandatory to accept. The amount will not always be in your best interest. You may be thinking what happens when you reject an insurance settlement offer? Read on to know more.

Definition of an Insurance Settlement Offer

An insurance settlement offer is a proposed payment from an insurance company to an individual to cover injury-related expenses and financial losses. Essentially, it is the insurance company’s way of proposing a payment to resolve a claim and close the matter. The offer is usually made after the insurance company has assessed the damages and determined the amount they are willing to pay to settle the claim. This settlement offer aims to provide a financial resolution to the claim, allowing both parties to avoid prolonged negotiations or litigation.

Purpose of an Insurance Settlement Offer

The primary purpose of an insurance settlement offer is to provide a financial resolution to a personal injury claim. The insurance company aims to settle the claim quickly and efficiently, while also minimizing their financial liability. By making a settlement offer, the insurance company is attempting to resolve the claim without the need for further negotiation or litigation. This approach benefits the insurance company by reducing legal costs and the time spent on each claim, while also providing the claimant with a quicker resolution to their financial needs.

Importance of Carefully Reviewing The Offer

Insurance adjusters tend to take advantage of an accident victim with an insurance company’s settlement offer. Be careful not to immediately give in to these bad faith tactics from the insurance company’s adjusters. Remember that you’ll lose the right to receive additional compensation from the at-fault party.

Always carefully review the settlement offer to make sure it covers all your losses and expenses. Don’t rush through the negotiation process. A personal injury lawyer can help you evaluate the offer and negotiate a fair settlement.

Reasons to Reject an Insurance Settlement Offer

You can’t simply say that the initial settlement offer is insufficient and request for any amount. You need to have a valid reason and provide evidence to achieve a reasonable settlement. Here are the main reasons why you should reject the initial settlement offer.

Inadequate Compensation For Damages.

An accident victim must check if the insurance offer covers all accident-related losses, including lost wages, medical bills, and future medical costs.

Insufficient Coverage For Medical Expenses.

There are cases wherein accident victims suffer from grave and possibly catastrophic injuries. Furthermore, they haven’t reached maximum medical improvement. With this kind of personal injury claim, accepting the initial insurance settlement offer isn’t advisable. The amount will not adequately cover anticipated future medical expenses. Non-economic damages such as pain and suffering may also not be addressed.

Unclear or Unfair Terms

When reviewing an insurance settlement offer, it is essential to carefully examine the terms and conditions. If the terms are unclear or unfair, it may be necessary to reject the offer and negotiate for a better deal. Unclear terms can include ambiguous language or a lack of specificity regarding the amount of compensation or the scope of coverage. Unfair terms can include lowball offers that do not adequately compensate for medical expenses, lost income, or other damages. Ensuring clarity and fairness in the settlement offer is crucial to avoid being shortchanged.

There Is Pressure To Take The Insurance Company’s Offer.

Accident victims may be swayed by the kind voice of insurance adjusters on the phone. They may attempt to give immediate relief by expediting forms for signature. This may seem a lifesaver to pay for injury-related expenses. Unfortunately, this is just one of the tactics insurance companies use to accept an unfair insurance settlement offer. If the insurance company refuses to meet your expectations, it is crucial to persist in negotiations or prepare for potential legal action.

Factors To Consider When Deciding Whether To Accept or Reject An Offer

There are several factors to consider when deciding whether to reject an insurance offer or not.

Fairness of The Insurance Settlement Offer

Knowing the full extent of your damages is key to determining if you’re getting a fair settlement.

Fair compensation isn’t just about your current losses, such as lost wages. You also need to consider future expenses and non-economic damages like pain to avoid being shortchanged in your personal injury claim.

Timing of the Settlement Negotiations

Timing matters. This can either increase or reduce your insurance claim. Rushing to accept a settlement offer may seem like an easy fix, but this can cause an undervaluation of your injuries.

Patience is important for you to truly understand the full extent of your injuries and their long term effects. This is known as your maximum medical improvement.

Long-Term Needs and Goals

Your goal during the settlement negotiations is to receive fair compensation that allows you to reach maximum medical improvement. This is a stage wherein recovery becomes stable and medical prognosis is definite. Accepting the insurance company’s offer before you reach this point is like purchasing a house without prior inspection.

Negotiating With The Insurance Company

Negotiating with the insurance company is a critical step in the settlement process. If you reject an insurance settlement offer, you can expect the insurance company to continue negotiating with you to reach a mutually agreeable resolution.

Continuation of Negotiations After Rejecting an Offer

After rejecting an insurance settlement offer, the insurance company may return with a counteroffer or continue negotiating with you to reach a fair settlement. This back-and-forth negotiation process can continue until an agreement is reached. It is essential to remain calm and patient during this process, as it may take several rounds of negotiation to reach a satisfactory resolution. An experienced personal injury lawyer can help guide you through this process and ensure that your rights are protected.

It’s also important to note that the insurance company may use various tactics to try to settle the claim quickly and cheaply. They may try to make you feel like you need to accept their offer immediately, or that you will not get a better deal if you wait. However, it’s essential to remember that you have the right to reject an offer and negotiate for a fair settlement.

In some cases, the insurance company may refuse to negotiate further, and you may need to consider filing a personal injury lawsuit to seek fair compensation. An experienced personal injury lawyer can help you determine the best course of action and represent you in court if necessary.

Remember, rejecting an insurance settlement offer is not the end of the process. It’s a critical step in seeking fair compensation for your injuries and losses. By understanding your rights and options, you can make informed decisions and ensure that you receive the maximum compensation you deserve.

The Role of an Experienced Personal Injury Lawyer

How a Lawyer Can Help With The Negotiation Process

An experienced personal injury lawyer serves as your compass in navigating the technicalities of a personal injury lawsuit. They take on the following tasks:

A lawyer possesses extensive knowledge and willingness to take legal action. This increases your chances of getting a fair and just resolution of your claim.

Next Steps After Rejecting an Insurance Settlement Offer

Take note that once you reject an insurance company’s settlement offer, it’s already off the table. Your personal injury lawyer will advise you of the following alternative dispute resolution methods:

Prepare For Further Negotiations With The Insurance Company

The insurance company will try to come up with another offer. You can then make a counteroffer, which the claims adjuster may refuse or accept. Having experienced personal injury attorneys on your legal team increases their willingness to give a fair offer. They are fully aware that you will not settle unless you receive an amount that can adequately cover your losses and damages.

Mediation and Arbitration

Mediation or arbitration may be needed. In mediation, an impartial 3rd party facilitates the discussion between the victim and the insurance company. If mediation fails, arbitration is done wherein a neutral arbitrator reviews the case and gives a binding decision.

File a Personal Injury Lawsuit and Go to Trial

Car accident victims are afraid to file a lawsuit because they feel that this will only complicate matters. However, this is an appropriate legal step you can take if your personal injury claim is being downplayed.

Contact the Clark Law Office Today.

Are you a car accident victim trying to decide whether to reject an insurance company’s first offer? The Clark Law Office has a team of personal injury lawyers that can give you advice on your dilemma. We will review your case and help you make informed decisions throughout the negotiation process. Book a free consultation with us today.