What Happens if You Don’t Accept a Settlement Offer from the Insurance Company?
It is much more common for personal injury cases to be settled through negotiations with insurance companies than go to court. The at-fault party’s liability insurance carrier investigates the claim to determine liability. Being liable means a party is legally responsible for the damages they cause to a person.
The party’s liability insurance provider investigates the claim. If it does not dispute liability, it might make a settlement offer.
Knowing whether to accept a settlement offer from the insurance company can be difficult. What happens when the settlement offer is unfair? Is there anything you can do?
Rejecting the Settlement Offer From the Insurance Company
The settlement offer is just an offer. You are not required to accept the settlement offer. If you do not think the offer is fair, you can reject the settlement offer.
The insurance company might request that you put your denial of the settlement offer in writing. If so, explain why you rejected the settlement offer in your letter. For example, your economic damages are more than the settlement amount.
Economic damages are your financial losses. They include expenses such as:
- Medical bills
- Lost wages
- Out-of-pocket expenses
- Physical therapy
- Decreases in earning capacity
- Personal care and household help
Another reason to decline a settlement offer is the company failed to include compensation for non-economic damages. Non-economic damages compensate you for your pain and suffering. They can include:
- Physical pain
- Disabilities and impairments
- Emotional distress
- Scarring and disfigurement
- Mental anguish
- Loss of enjoyment and quality of life
If you are unsure how much your personal injury claim is worth, you might consider meeting with an expert for a free consultation. An attorney can review the settlement offer to advise whether it is fair, given the facts of your case.
Make a Counteroffer to the Insurance Company to Settle Your Claim
You can make a counteroffer when you reject a settlement offer from the insurance company. A counteroffer should include the total of your financial expenses. Providing proof of the expenses increases the odds of settlement.
Also, the counteroffer should include a fair amount for pain and suffering. There is no standard formula used by the courts to calculate non-economic damages. However, many insurance companies use the multiplier method.
You choose a number between 1.5 and five (five being the most severe) and multiply that number by the economic damages. The result is the value of your pain and suffering damages.
Be prepared to provide evidence and legal reasons to justify your counteroffer amount. For example, if you claim three times the economic damages for pain and suffering, include details about your recovery that justify the amount, such as:
- Your injuries required surgery to repair
- You had to complete three months of physical therapy
- The injuries prevented you from caring for your children
- You could not participate in your favorite activities
- The injuries resulted in severe and chronic pain for months
- You experienced night terrors and panic attacks because of the trauma of the accident
The facts of your case significantly impact the value of your damages. For example, severe injuries can increase how much your case is worth. However, if you contributed to the cause of your injury, your compensation could be lower based on your percentage of fault.
Negotiating a Settlement with the Insurance Company
The insurance company might accept your counterclaim, or it could reject it. If the company rejects the offer, it might be willing to negotiate further. However, if the insurance company makes a final offer and refuses to budge, you may have to file a personal injury lawsuit to recover your losses.
What Happens if You Accept a Settlement Offer?
Understanding the significance of accepting a settlement offer from the insurance company is crucial. Before the company gives you a check, it will require you to sign a settlement agreement.
The settlement agreement waives your right to pursue any further legal action against all parties regarding this claim. If you discover you have a permanent disability or need additional surgery, you cannot file another claim or a lawsuit. You gave up that right when you signed the settlement agreement.
Do I Need a Personal Injury Lawyer to Reject or Accept a Settlement Offer?
Negotiating a personal injury settlement with an insurance company can be challenging. The insurance claims adjuster has years of experience handling claims. Furthermore, the insurance company has the resources to fight your claim.
The company is not required to tell you how much your claim is actually worth. Likewise, it does not have to tell you if you agree to accept a lower amount.
Before accepting a settlement offer, ensure that you understand your options and the correct value of your personal injury claim. You have the right to legal counsel. Talking to a personal injury attorney could prevent you from making a costly mistake.
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