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After a serious accident, you may automatically assume that the insurance company will offer a settlement that will help provide you with much-needed compensation for the losses related to that accident. You have medical bills to pay, other expenses to deal with, and a loss of your usual income while you recover from the accident. The insurance policy states that you deserve compensation for those losses.
Will you receive a settlement offer? What will it look like?
In many personal injury cases, victims will not receive the settlement offer they expect from the insurance company and when it does come, it may not reflect the compensation they initially expected.
Most often, insurance companies want to get you to accept a settlement offer quickly. Typically, insurance companies really want you to accept a settlement offer before you have a solid idea of what your long-term recovery (and therefore your long-term costs) will look like.
When the settlement offer arrives may depend on the type of injury you suffered, the cause of your accident, and even the insurance company that covers the liable party. However, many insurance companies will try to send out an initial settlement offer shortly after the initial accident: often within a matter of weeks.
In general, the insurance company will send out a settlement offer under these circumstances.
Many insurance companies will try to dispute liability after an accident. If another party bears liability for the accident, the insurance company may not have to pay. When possible, the insurance company will try to push some or all of the liability for the accident to another party, including the injured individual. If the insurance company has sent out a settlement offer, it generally indicates that the insurance company has accepted that the party it covers, from a property owner to a driver, caused the accident. The liable party may have fully accepted liability: for example, a driver that accepts responsibility for the accident at the scene and even calls their car insurance provider to offer notice about the accident.
To submit a settlement offer, the insurance company may need an idea of what financial losses you have suffered due to the accident. Many insurance companies now use AI to calculate the specific value of injuries, damage to personal property, and the other losses suffered by the injured party. They may issue a settlement based on that amount. Often, the AI will calculate a low percentage of those losses for the initial settlement, and the insurance adjuster may have little ability to change that first number.
Many insurance companies use those initial offers as part of a negotiating technique. Their AI, or perhaps company policy, will generate a number that the adjuster should offer you, usually based on a small percentage of the losses you experienced due to the accident.
Often, this initial settlement serves as a vital example of where the needs of the insurance company and the needs of the injured party differ. As the injured party, you need to maximize your compensation as much as possible, since you may have future medical bills coming in, further expenses piling up, and time remaining before you can go back to work because of your injuries.
The insurance company, on the other hand, wants to minimize the compensation that it has to pay out to you as much as possible and that low initial settlement offer highlights the fact that the insurance company generally prioritizes its finances, rather than the needs of people who may have sustained severe injuries in an accident caused by the negligence of the party insured by that company.
The insurance company may not present the settlement as something that you can negotiate. Instead, the adjuster may try to present the settlement to you in a way that suggests you have no choice but to accept it as-is. In reality, however, you have the right to continue to negotiate for the compensation you really deserve after an accident.
You have the first settlement offer from an insurance company in hand. Now what?
If you receive a verbal offer, you may want to ask for time to think before responding. The insurance adjuster may pressure you to issue an immediate acceptance. In some cases, the insurance adjuster can even transfer the funds to your account within hours of accepting a settlement offer. If you have bills piling up, you may feel a lot of pressure to accept that initial offer instead of trying to negotiate.
If you accept an offer that does not accurately reflect your financial losses from the accident, however, you may find yourself struggling in the future. Keep in mind that the cost of ambulance transport alone can cost over $1,000. If you sustained serious injuries in the accident and therefore will require ongoing treatment, your medical bills may total much more than that initial settlement offer.
Often, when people suffer severe injuries, insurance companies will try to issue a settlement offer before they have a chance to get a real idea of what their medical bills will look like. That can act in the insurance company’s favor, since you may accept a low offer without realizing how it has the potential to impact you in the future. However, slowing down and taking the time to consider an offer can help put you in a better position financially.
If you do not already have an attorney to help manage your personal injury claim, start by contacting one as soon as possible. An attorney can help you better understand how much compensation you really deserve for your injuries, which may make it easier for you to determine whether you should accept that settlement offer.
Your settlement offer should depend on several factors, including the limits of the policy that covers the liable party, the extent of your medical costs, and what other losses, including both financial and non-financial losses, you have faced as a result of the incident. An attorney can help you take a look at the real compensation you should expect from the insurance company, including how to claim compensation for non-financial elements like pain and suffering.
Working with an attorney can also provide you with a vital buffer that makes it much easier to manage your personal injury claim and make sure that you take your needs and rights into consideration. An attorney can help give you confidence that you have made the right decision in determining to wait before accepting a settlement. You can also have your attorney take over communication with the insurance company for you, which may make it easier for you to stick to your guns and pursue the compensation you really deserve.
Before you jump to accepting a settlement offer, consider keeping your focus on your recovery for the time being. Right now, you may not even know what a reasonable settlement offer for your injuries will look like. Some injuries may leave you with a long road to recovery and you may not have a good idea of the full medical costs you will face along the way. Others may leave you with lifelong medical costs.
Spinal cord injuries, for example, could leave you with tens of thousands of dollars in medical costs each year after your accident, even once you have taken care of the initial cost of your medical care.
Your care team can give you an idea of what to expect as you recover from your injuries, but may not know exactly what challenges you may face along the way. You may face unexpected complications in your recovery, need more procedures, or need more help with certain elements of your regular life than another patient who has suffered very similar injuries. On the other hand, you might recover better than others in similar positions, which would leave you with fewer medical costs and lower overall limitations for the rest of your life.
An attorney cannot fully put together your personal injury claim, complete with all the costs you may have faced due to your injuries, until you have had a chance to recover from those injuries enough that your doctors can better predict your future prognosis. You have the right to wait until you know what that long-term recovery will look like before you start moving forward with your personal injury claim. Let your attorney deal with the insurance company in the meantime.
Your recovery from serious injuries can become extremely expensive. You may find yourself dealing with what feels like an ever-growing stack of medical bills, often higher than you initially anticipated. As your lost hours at work increase because you cannot yet return to work, you may notice that your lost wages grow higher. Unexpected setbacks may mean more costs, both in terms of your medical expenses and in terms of your lost wages.
Keep track of all of those costs, particularly in the case of serious injuries. You may later struggle to pull all of your medical costs together, especially if you have to undergo a long list of procedures. You may also quickly lose track of things like the copay for individual appointments, individual therapy visits, or the cost of durable medical equipment as you experiment with what works best for you. You may want to start a specific file where you can keep track of those bills, or turn the list over to your attorney to ensure accurate record-keeping.
Those bills and financial losses will serve as the foundation of your personal injury claim. Your actual financial losses show how much you deserve in compensation from the party that caused your accident or, most often, the insurance company that covers that entity. By carefully tracking those expenses, you can put together a clear, effective claim.
Many insurance companies will use a lot of pressure tactics to try to convince you to quickly accept a settlement offer, including one that does not seem to reflect your best interests. The adjuster may, for example, indicate that you have to accept an offer fast or the insurance company will take it off the table.
Most of the time, the insurance company will not take an offer off the table. If you sustained damages, including injuries and the associated medical bills and losses, due to the negligent actions of a party covered by that insurance company, you have the right to compensation.
Taking the time to think about the settlement offer does not mean that you will lose it. If you have doubts about the insurance company’s offer, or you feel the insurance company has used unethical or even illegal tactics to convince you to accept a low settlement offer, get in touch with a lawyer as soon as possible.
A lawyer can help make sure that you protect your right to compensation and, in many cases, help increase the compensation you can ultimately recover from the insurance company. You might never see that initial offer again, but usually, a lawyer will help you get one that better reflects your needs.
If you have suffered injuries in an accident due to someone else’s negligence, and you find yourself struggling with the insurance company, you still have time to contact a lawyer to intervene on your behalf. Get in touch with a personal injury lawyer as soon as possible to learn more about your rights and how to manage an insurance settlement offer.
John Gomez founded the firm alone in 2005. Today, John acts as President and Lead Trial Attorney. He has been voted by his peers as a top ten San Diego litigator in three separate fields: Personal Injury, Insurance and Corporate Litigation. Since 2000, he has recovered over $800 million in settlements and verdicts for his clients with more than 160 separate recoveries of one million dollars or more. A prolific trial lawyer, John has tried to jury verdict more than 60 separate cases.
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