So you’ve been in an accident and suffered severe injuries. Chances are that — sooner than later — you’ll be contacted by an insurance adjuster to obtain a statement about what happened. The insurance company will use this statement to determine how much your settlement offer should be.
Then, they’ll come back to you with an offer to settle quickly — but it might not be what you have in mind.
We outline what to do when your insurance settlement offer is too low.
Why You Shouldn’t Accept the First Offer
Being offered a check not long after your accident can be incredibly tempting — you know it’ll cover your immediate medical expenses and tide you over until you’re able to return to work — and that shouldn’t take long at all, should it?
The problem is, at this point, you likely haven’t had a chance to speak to a personal injury lawyer, and you don’t even know how long it’s going to take for you to recover, what medical treatment you may need, and whether the accident caused you permanent injury.
What may seem a tempting offer at first could be much less than what you deserve, and over the long term, it may end up being substantially less than what you need to cover your lost wages and medical expenses.
What you think is just a sprain could end up needing surgery and months of expensive physical therapy. Suddenly, what was initially a tidy sum is nowhere near what you need to cover your bills, and because you’ve already accepted the offer, you have to fund the rest of your expenses out of pocket.
You may feel pressured to accept the first settlement offer, especially if the insurance adjuster starts telling horror stories about claims taking years to settle — or not settling at all. When you’re out of work and need to pay emergency room fees, medication costs, and more, you might think you can’t afford to wait years and end up going to court only to potentially not receive any money at the end of it.
The crucial thing to remember is that you don’t need to accept the first offer — and while an insurance adjuster will hope you do, they don’t expect you to. Insurance companies are notorious for offering insurance settlements that are too low so that they can offer a fairer sum during negotiations.
Is the Insurance Settlement Too Low… Or Just Less Than You Want?
This is a crucial question to ask yourself. If you’re still in the early stages of negotiating a settlement, chances are that the settlement offer is too low and you’re entitled to much more, but there may be a big difference between what you’re entitled to and what you want.
After an accident, it’s natural to want the maximum possible settlement, but you still need to be realistic.
In reality, massive settlements do happen, and we’ve secured million-dollar payouts for our clients. But larger settlements tend to occur in complex cases involving multiple parties or when an individual has sustained permanent injuries that impact their independence and quality of life.
For example, if you sustain a spinal cord injury that leaves you needing to use a wheelchair for the rest of your life, you’ll be entitled to substantially more than if you’re in a minor fender bender and walk away with a few bumps and bruises.
To know if your insurance settlement offer is too low, it’s helpful to understand how personal injury settlements are calculated.
In a personal injury claim, you’re entitled to recover two main types of damages. These are economic damages and non-economic damages.
Economic damages are hard, quantifiable costs, such as past and future medical expenses (including fees for scans, tests, and other immediate treatment, surgery, medication, and travel to and from the hospital) and past and future lost income.
Evidence is critical to getting a fair settlement offer, which is why you should keep receipts and records of the costs and losses you’ve incurred after your accident.
Non-economic damages compensate you for pain and suffering, loss of enjoyment, and mental anguish. These are harder to quantify, as it’s not easy to put a price on something so subjective. Non-economic damages are typically calculated by applying a multiplier between one and five to your total economic damages.
If you’ve sustained minor injuries, the multiplier might only be 1.5 or two, whereas if your injuries are life-changing and prevent you from ever working again, the multiplier might be four or even five.
To illustrate this with an example, if your total economic damages are $10,000, you will be entitled to anywhere between $15,000 and $50,000, depending on the impact of your injuries on your life.
The formulas insurance companies use to determine which multiplier to add vary, but having a rough idea of how much your economic damages total can help you figure out if an insurance settlement offer is too low.
Negotiating a Fair Settlement
If your insurance settlement is too low, you can negotiate. As stated, insurance adjusters fully expect negotiations to occur — it’s a typical part of the process.
Before negotiating a new settlement offer, it’s helpful to have a rough idea of how much you’d be happy to accept. Again, this should be realistic based on the expenses you’ve incurred and the overall impact of your injuries.
If you have a permanent or long-term injury that needs ongoing treatment — such as physical therapy — you’re entitled to recover future losses, but you might not know how much it will cost. Your personal injury attorney will consult experts to predict the cost, which can then form part of your settlement negotiations. If you’re ever not sure what a fair offer looks like, ask your lawyer. They’ll be able to give you a realistic figure based on the strength of your case and their experience handling similar claims.
When negotiating with an adjuster, you can use this ballpark figure to gauge whether you’re on the right track. If the initial offers are very close to your ballpark, you can be fairly certain that the insurance settlement offer is too low, and you can adjust your target.
It can also be helpful to ask an adjuster to explain their offer, especially if it’s too low. For example, if they highlight a lack of evidence, saying that there are no witnesses to the accident, but you have a witness statement that supports your account, you can leverage this to negotiate a better offer.
Going to Trial
Most claims settle way in advance of any consideration of going to trial. But sometimes, insurance companies are stubborn and won’t deviate from an insurance settlement that is far too low. Going to court is a lengthy process, and even after getting a court date, it takes months or years to gather evidence and prepare for a trial.
There’s also no guarantee of success — for either party — which is why additional negotiations and mediation often occur. It’s not uncommon for cases to settle at the eleventh hour as a fair settlement is finally reached.
Only a tiny percentage of personal injury cases end up in court, but if it’s a step you want to take, your attorney can advise you on what to expect and your likelihood of success.
Consult Your Personal Injury Lawyer
If there’s one thing to remember when handling a personal injury claim, it’s that your attorney is there to support you.
Our personal injury attorneys are skilled negotiators who know when an insurance settlement offer is too low and will fight to secure you fair compensation.
If negotiations are unsuccessful and your insurance settlement is still less than you deserve, we can assess the strength of your claim and prepare your case for trial.
However your case plays out, we’ll be with you every step of the way, taking the stress off your plate and fighting to get you the compensation you deserve so that you can focus on your recovery.
Our personal injury lawyers in South Carolina are dedicated and determined to get you the compensation you’re entitled to so that you never have to worry that your insurance settlement offer is too low.
