When you’re involved in an accident or injured through someone else’s negligence, dealing with the aftermath can be overwhelming. One of the most stressful aspects of the recovery process can be handling the insurance claims, especially when the company offers you a settlement that seems insufficient or outright unfair. Insurance companies have a reputation for offering low settlements in an attempt to protect their bottom line. However, it’s important to understand why they do this and what you can do to ensure that you’re not left with less than you deserve.
Why Do Insurance Companies Offer Low Settlements? 
Insurance companies are for-profit businesses, and like any business, their primary goal is to maximize profits. For insurance companies, this often means reducing the amount they pay out on claims. There are several reasons why insurance companies push low settlements:
1. Minimizing Their Financial Exposure
Every claim is a cost to the insurance company. The larger the payout, the more it impacts their profitability. To prevent substantial losses, insurance companies work hard to offer the lowest possible settlement, hoping that the policyholder, especially those unfamiliar with the claims process, will accept the offer without questioning it.
2. Taking Advantage of the Claimant’s Uncertainty
After an accident, many individuals are in a state of confusion, stress, and sometimes desperation. They may be dealing with medical bills, lost wages, and the emotional strain of the injury. Insurance companies know this and often take advantage of the urgency by making an early, low settlement offer. This can be an attempt to settle the case quickly before you realize the full extent of your injuries and damages.
3. Assumption of Limited Knowledge of Personal Injury Law
Insurance adjusters often count on the fact that injured individuals may not be fully aware of the value of their claims. Many don’t know that their injuries might have long-term consequences, such as ongoing medical treatment, emotional suffering, and the potential for lost earning capacity. By offering a quick settlement, insurance companies aim to resolve the claim before you have a chance to fully evaluate your situation with the help of legal professionals.
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4. Burying the Claimant in Paperwork and Technicalities
Dealing with insurance claims often involves a mountain of paperwork, complex terms, and legal jargon that can be difficult to navigate. Insurance companies are skilled at making the claims process as complicated as possible, hoping that claimants will become frustrated and accept low offers to avoid further hassle. The sheer volume of communication from the insurance company can overwhelm you, making it difficult to see how the initial settlement offer doesn’t fully reflect the full scope of your losses.
5. Settling Quickly to Avoid Legal Costs
Insurance companies often try to avoid the expense and time involved in a lengthy legal battle. They are well aware that most personal injury cases that go to court cost significantly more in terms of legal fees, expert witnesses, and other resources. By offering a quick settlement, they hope to prevent you from hiring an attorney or taking them to court, where the costs and risks for them could escalate.
How to Recognize a Low Settlement Offer
Knowing when an insurance company’s settlement offer is too low is essential to ensuring that you don’t accept less than you deserve. Here are some signs that the offer might not be fair:
- It’s Lower Than Your Medical Bills: If the settlement offer is lower than your total medical expenses, it’s likely insufficient. Insurance companies may attempt to undervalue your medical treatments or fail to consider future medical costs. Be sure to assess both immediate and future medical needs.
- It Doesn’t Account for Lost Wages: Many people don’t realize that their insurance settlements should cover lost wages due to the injury, especially if your ability to work has been impacted long-term. If your offer doesn’t account for income loss, it’s not a fair settlement.
- The Pain and Suffering Is Underrepresented: Insurance companies may attempt to undervalue non-economic damages such as pain and suffering, emotional distress, and reduced quality of life. These are important aspects of your claim that should be factored into the final settlement.
- It’s Too Quick: If the insurance company is rushing you to accept the offer, there’s likely a reason. A rushed settlement might be an attempt to avoid a more thorough evaluation of your claim.
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What Steps Should You Take to Fight Back?
If you’ve received a low settlement offer, don’t panic. Here are steps you can take to fight back and secure a fair settlement.
1. Consult a Personal Injury Lawyer
One of the best decisions you can make when dealing with a low settlement offer is to consult with an experienced personal injury lawyer. A qualified attorney will have the knowledge and expertise to understand the full value of your case and will help you assess whether the settlement offer is reasonable. Insurance companies often offer low settlements because they know many people don’t have legal representation. By hiring a lawyer, you level the playing field and ensure that your rights are protected.
2. Request a Detailed Explanation
Ask the insurance company for a detailed breakdown of how they calculated their offer. This will help you understand whether they are accurately accounting for all of your damages. If they refuse or provide an inadequate explanation, it’s a red flag that their offer may be too low.
3. Document All Your Injuries and Expenses
To strengthen your case, keep thorough records of all injuries, treatments, and medical expenses. This includes not just hospital visits but also therapy sessions, medications, and even travel expenses related to your treatment. Don’t forget to document the emotional toll your injuries have taken on your life. These records will support your claim and help ensure that you’re fairly compensated.
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4. Don’t Settle Too Early
Take your time before accepting any offer. Settling too early may prevent you from recovering the full compensation you deserve. If the insurance company insists on a quick settlement, it may be in your best interest to seek legal counsel and delay accepting their offer.
5. Consider Future Costs
When reviewing a settlement offer, it’s essential to consider not only the current costs associated with your injury but also future expenses. This includes ongoing medical treatments, therapy, potential surgeries, and the impact the injury may have on your future earning potential. A good settlement should cover both current and future losses.
6. Prepare for Negotiation
Negotiating with insurance companies is an expected part of the process. They may start with a low offer, but it doesn’t mean you have to accept it. Be prepared to counter their offer with documentation and solid reasoning. An attorney can assist you in crafting a strong counteroffer that reflects the true value of your case.
Verdicts & Settlements
Why a Fair Settlement Matters
Accepting a low settlement offer can have lasting consequences. Injuries often have long-term effects that aren’t immediately apparent. What may seem like a fair amount today might not be enough to cover your medical bills or lost income down the road. A fair settlement ensures that you’re compensated for both your immediate needs and future expenses, helping to provide financial stability in the face of an unexpected injury.
Additionally, securing a fair settlement shows the insurance company that you are knowledgeable about your rights and not easily taken advantage of. It sends a message that you will stand up for yourself and will not settle for less than what you deserve.
If you’re facing a low settlement offer or feel that your insurance company isn’t offering you fair compensation, don’t hesitate to reach out to the experienced attorneys at Andrews, Bernstein & Maranto, PLLC. We understand the tactics used by insurance companies and know how to fight back. Our attorneys will work tirelessly to ensure that you receive the compensation you deserve for your injuries. Contact us today for a free consultation and let us help you navigate the claims process.