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What Happens When You Reject an Insurance Settlement Offer?

What Are Compensatory Damages?

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Following an accident or injury, you might find yourself grappling with physical discomfort, emotional turmoil, and financial burdens. You’ll likely have urgent concerns regarding your legal rights and the next steps in maneuvering through such a difficult phase of life. Insurance companies come into play here as essential actors that will hopefully facilitate the compensation process for these unexpected events.

When presented with a settlement offer from an insurance company, you might find yourself dissatisfied with the amount they’re willing to pay. If so, it’s important for you — or normally a lawyer on your behalf — to know that you can reject their offer.

Here’s what you need to know if you’re wondering what happens when you reject an insurance settlement offer.

What Happens if I Reject a Settlement Offer? Presenting a Counteroffer

Upon rejecting an initial settlement offer, the next step involves drafting and presenting a counteroffer. Your counteroffer likely demands a higher sum to sufficiently cover your injury or accident-related losses. It marks the commencement of intense negotiations aimed at reaching a compensation agreement.

Critical to this negotiation is bolstering your claim with solid evidence sent to the insurance company after their initial proposal. Medical records chronicling relevant hospital visits, treatments received, and prognosis will make up part of this package.

You should include in these documents any expenses directly linked to your medical care, such as the costs of medications, hospital admissions, physical therapy sessions, and any other ancillary charges you have incurred due to your circumstances.

You should also provide proof of any income lost directly due to your injury or accident. This is essential to show how much you’ve lost from being unable to work after the accident.

The Potential for Litigation

If a suitable settlement is not reached during the negotiation process, you may consider filing a personal injury lawsuit.

After filing a lawsuit, there will be an intricate process involving several stages, such as discovery (exchange of information related to the case between parties), more negotiations for settlement during trial preparation, and potential court proceedings if these further negotiations don’t result in agreement.

It’s important to weigh both the risks and benefits of filing a lawsuit and facing litigation.

Advantages and Disadvantages of Going to Trial

Progressing to the litigation phase can present certain benefits, including the potential opportunity to obtain more financial compensation than what was initially proposed by your insurance company. If successful, this could cover any income loss or medical care required due to your accident.

However, alongside these benefits lie certain challenges that need consideration:

  • Uncertain outcome. No matter how strong you might think your case is and how strong your evidence is, lawsuit outcomes are unpredictable by nature.
  • Lengthy process. Trials can inevitably take a lot longer than settling out of court, extending the emotional and financial strain associated with your accident.
  • Higher costs. Most attorneys operate on a contingency basis when it comes to personal injury claims—which means they get paid if they win compensation for you. However, it’s common for attorneys to charge a higher percentage if the case goes to trial than if it settles. This means your lawyer takes a bigger chunk out of your payment if it goes to trial.
  • Emotional stress. Going to trial also comes with increased stress levels from uncertainty surrounding the outcome, compounded by possible cross-examination and public exposure of personal details linked to your claim.

The decision on whether going through with a trial is worth it ultimately rests with you and should be made after having a conversation about the potential risks and benefits with your attorney.


How do you respond to a low insurance settlement offer?

When you receive a low settlement offer and are being urged to respond, the critical thing is not to accept it immediately. Remember, you have rights and options available. Here’s what you should do:

  • Evaluate the offer carefully. Determine if the amount offered can realistically cover your medical bills, damaged property costs, and any lost income due to time off work caused by your injuries.
  • Consult with an attorney. It is always in your best interest to talk with legal counsel experienced in personal injury law to determine if it is a good offer or not.
  • Submit a counteroffer. Reject the initial offer by writing a formal demand letter presenting your counteroffer. Here, you describe the accident and injury details, why you believe the other party is at fault, and how their negligence has affected your life detrimentally.
  • Support your demand. You should provide as much factual information supporting this new amount requested. That includes evidence of damages incurred such as medical bills or loss of earnings records substantiating your claims.

Always keep in mind the importance of patience throughout this process, avoiding a rushed decision into less satisfying settlements due to financial constraints or emotional distress following an accident.

When should you reject a settlement offer?

It’s important to know when and how to decline a settlement offer. There are several instances in which rejecting a settlement offer from an insurance company becomes not only advisable but also crucial:

  • Insufficient offer. If the amount proposed does not adequately cover your expenses incurred, such as medical costs and lost income, you should consider rejecting the offer.
  • Not including future costs of injuries. Injuries often require long-term treatment and might affect your future earning capacity and overall well-being. If these elements aren’t considered within the settlement, that’s a red flag and you should consider rejecting it.
  • Undervaluation of pain and suffering. While it can be challenging to put a dollar figure on pain and suffering, you may want to reject an offer if it does not take the severity of your physical pain, emotional trauma, or diminished quality of life into account.
  • Poor investigation. If there hasn’t been a thorough investigation by the insurance company or if they disregard certain crucial aspects leading to an unfair amount being offered, this may also warrant a rejection.

Ultimately, it’s always up to you whether you accept an offer. Always speak with a lawyer first to help you make this decision.

How long do you have to accept a settlement offer?

In California, the insurance company handling a claim may set forth a specific deadline by which you must accept their settlement offer; it’s always prudent to confirm this with them directly.

On matters of broader legal timing, though, beware of the two-year statute of limitations for personal injury cases in California. Essentially, should you wish to file a lawsuit against an at-fault party after an accident causing personal injury, you must file your claim within two years.

Make sure your insurance claim is handled well before then if you’re going to reject the offer, so you still have time to file a lawsuit if you wish.

What happens after you accept a settlement offer?

Upon accepting a settlement offer, you will be generally asked to sign a Release form. This legally binding document prevents you from seeking additional compensation for the same incident in the future.

Next comes waiting for your settlement check, which can range from several weeks up to a few months depending on company policies and necessary procedures involved.

Certain deductions will be made before your money is paid out to you, which will include attorney fees and other legal expenses like expert witness fees if applicable. Any medical liens will also be deducted before you receive your check.

Once this is all taken care of, your attorney should send you your settlement check and you can try to move forward with your life and your recovery.

Contact Gomez Trial Attorneys for Help With Your Settlement Offer

Navigating the intricacies of insurance settlement offers is a legal task that requires meticulous evaluation and negotiation. The path can appear complex when you face it alone; fortunately, our skilled team possesses the necessary expertise to handle these situations effectively, advocating relentlessly to ensure you receive just compensation for your injuries.

Please don’t hesitate to get in touch with us if you need help with any type of personal injury claim. Contact Gomez Trial Attorneys at 619-237-3490 or by contacting us online to set up a no-cost initial consultation.

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