The first settlement offer from an insurance company is rarely in your best interest. It’s designed to minimize the insurer’s payout, not fully compensate you. At this stage, you may not even know the full extent of your injuries and future expenses.
Before accepting any offer, consult with an experienced personal injury attorney. A lawyer can assess your damages, protect your rights, and negotiate for the compensation you truly deserve.
Why Insurance Companies Offer Low Initial Settlements
Insurance companies often start with low settlement offers to minimize payouts. These quick offers may seem tempting, especially if you’re facing financial strain, but they rarely reflect the full value of your claim.
Insurance Companies Prioritize Profits
Insurance companies are businesses, and their primary goal is to maximize profits. One way they do this is by settling claims quickly and for as little money as possible. By offering a low initial settlement, insurers hope claimants will accept it before fully understanding the extent of their damages.
Failing to Account for Long-Term Damages
A common tactic insurers use is to offer a settlement before the full scope of an injury is known. This means they may not include compensation for:
- Ongoing or future medical treatment
- Long-term rehabilitation costs
- Lost future earning potential
- Emotional distress or pain and suffering
By settling early, they avoid paying for costs that may arise later, leaving victims financially vulnerable.
Taking Advantage of Financial Pressure
Many personal injury victims experience financial strain due to medical expenses and lost income. Insurance companies exploit this by offering quick, low settlements, knowing that some claimants may accept just to cover immediate expenses, often at the cost of fair compensation.
Avoiding Lengthy Legal Battles
Litigation can be costly and time-consuming for insurance companies. By making an early, low settlement offer, they attempt to resolve claims before an attorney gets involved. When claimants have legal representation, settlements tend to be significantly higher because attorneys understand the true value of the claim and negotiate accordingly.
Capitalizing on Lack of Legal Knowledge
Most people are unfamiliar with personal injury law and the full extent of what they are entitled to. Insurance companies leverage this knowledge gap to push lower offers. They may:
- Downplay the severity of injuries
- Suggest that their offer is “fair” and unlikely to improve
- Use confusing language to make claimants believe they have limited options
The Risks of Accepting the First Injury Settlement Offer
Accepting the first settlement offer can severely limit your compensation. These offers typically include a release of liability, meaning you can’t seek additional funds later—even if your injuries turn out to be more serious than expected.
For example, if you suffer a back injury in a slip and fall, an insurer may offer a quick payout to cover immediate expenses. However, these injuries often require ongoing treatment, rehabilitation, or even surgery. You may struggle to cover these long-term costs if you’ve already accepted the offer.
Beyond medical expenses, initial offers rarely account for emotional trauma, such as PTSD or chronic pain, which can significantly impact your quality of life. Before settling, ensure you understand the full extent of your damages and consult an attorney to protect your rights.
What To Consider When Evaluating an Injury Settlement Offer
Insurance companies prioritize their bottom line, not your best interests. Before accepting an offer, consider whether it fully covers:
- Full medical and future treatment needs
- Lost wages and future earning potential
- Pain and suffering
- Property damage
- Insurance coverage limits
- Comparative negligence in your state
- How accepting an early offer may impact you in the future
- The timing of accepting an offer
While a quick settlement may seem appealing, it often falls short of covering your full losses. Prioritize your long-term well-being over short-term relief to ensure you receive the compensation you truly need.
What Happens if I Reject a Settlement Offer From an Insurance Company?
Don’t accept a low offer out of fear of what happens next. Insurance companies expect some negotiation and won’t walk away just because you reject their first offer—especially if their client is at fault.
If you decline, you can counter with your original claim amount or a revised figure if a resolution is close. Just ensure your counteroffer reflects the full extent of your damages. Negotiations may take multiple rounds, but patience can lead to a fairer outcome.
Having an experienced personal injury attorney on your side strengthens your position. Insurers recognize top lawyers in your area and may think twice about lowballing when they see a seasoned advocate handling your claim. While the final decision is yours, a skilled lawyer can help ensure any settlement truly covers your losses.
What Happens if We Cannot Agree on a Settlement?
Most personal injury cases settle out of court, but if yours doesn’t, you have the right to sue. Don’t wait until negotiations are seemingly over to file a legal claim. If you delay, you could lose your right to sue. For example, in Ohio, you have two years from the accident date to file a lawsuit.
Filing early pressures the insurance company to negotiate fairly instead of dragging out the process or sticking to a low offer. Partner with an experienced attorney to file a lawsuit and inform the insurance company that you will go to court if necessary. Never feel bad for filing a personal injury lawsuit.
Before trial, both sides exchange evidence in discovery, take depositions, and may file motions—such as the defendant seeking dismissal. Mediation is also an option. Even once a trial starts, insurers may still settle based on your evidence and attorney’s strategy.
How a Personal Injury Lawyer Can Help You Pursue a Fair Settlement
Even if you understand how to deal with insurance adjusters, that doesn’t mean they will offer you a fair settlement. Insurers look to take advantage of people who don’t have representation. They know that skilled attorneys can provide you with many advantages in negotiations:
- Experience in cases similar to yours
- Legal knowledge, including the laws around personal injury and those specific to your claim
- Understanding of complex insurance terms and conditions
- Evidence gathering, including things that you would have difficulty securing on your own
- Damages calculation
- Negotiation skills and knowledge of insurance company tactics
- Representation in court
You don’t have to get a lawyer, but you risk leaving potential compensation on the table if you don’t. Keep in mind that you can partner with one now even if you’ve already been offered an insurance settlement offer and are trying to decide whether to accept. A personal injury attorney can still assist you if you submitted your initial claim yourself.
Consult With an Award-Winning Personal Injury Lawyer Today
At Lawrence & Associates Accident and Injury Lawyers, LLC, we’ve spent two decades fighting for injury victims, securing hundreds of millions in compensation. We take your trust seriously and are committed to guiding you through every step of your case.
Our Client Bill of Rights lets you know exactly what to expect of us. See how our client-first approach delivers results by reading what others have to say about working with us.
With offices in Cincinnati and Northern Kentucky, our experienced attorneys are here to protect your rights and help you avoid costly mistakes. Call (513) 951-6723 in Ohio or (859) 251-3045 in Kentucky for a free consultation, or fill out our online form to get started. Let us fight for the compensation you deserve while you focus on healing.
