Should I Accept the First Insurance Settlement Offer?

March 29, 2024 | Jarrett Blakeley
Should I Accept the First Insurance Settlement Offer?
A distressed man sits by shattered glass and a car after an accident.

When you suffer a car accident, you’re immediately confronted with challenges you probably never expected, from damage to your vehicle to mounting medical bills, and more. In the midst of all this, you receive the first insurance settlement offer. The relief might be overwhelming. With medical bills piling up and regular income dwindling, it may seem only logical to accept immediately. However, it’s wise to stop and ask questions before doing so, chiefly: should you accept this initial insurance settlement offer?

At Blakeley Law Firm, our car accident attorneys have ample experience helping accident victims navigate the challenges of their personal injury claims, including knowing when to accept a settlement offer and when to pursue other options. To get the full picture of your specific case and how you can protect your rights while you recover from your injuries, consult an experienced attorney. Meanwhile, read on to learn more about how insurance settlements work and what you should do when you receive an offer from your insurer to settle a claim. 

How Does a Car Accident Settlement Work?

A car accident settlement is an alternative to going to trial. Most people do not settle their legal claims after a car accident inside a courtroom. Instead, an attorney negotiates to resolve the dispute and get them the compensation they need. In a settlement, the party at fault or responsible (the plaintiff) agrees to pay a certain amount to the wronged party (the defendant), and the defendant agrees to accept this amount and pursue no further legal action.

The concept of settlement is simple, but the process itself is far from it. It takes time and legal understanding to negotiate a successful settlement.

The parties involved in a car accident lawsuit can reach a settlement at nearly any point in the legal process. In some cases, a defendant can get compensation quickly. In other cases, the dispute may go on for months before the parties agree. When a case is particularly complex or multiple defendants are involved, the court may need to approve the final settlement.

The Settlement Process

After you report the accident to your insurance company, the process of working toward a settlement begins. The first step involves sending a demand letter. The demand letter, carefully written by your lawyer and drawing on your lawyer’s experience in the settlement process, explains the accident, your injuries, and what compensation the insurance company should provide. You and your lawyer will send this letter when it becomes clear that the insurance company does not intend to send you any compensation or the compensation they offer is insufficient to cover the damages you have suffered.

The insurance company will need a reasonable amount of time to receive and consider this letter. In some cases, the insurance company will ask you to see a doctor of their choosing to evaluate your injuries and long-term prognosis.

Always talk to your lawyer before agreeing to anything during the settlement process. Avoid speaking directly to the other party at any time. If the other driver or anyone from the insurance company calls you, always refer them to your lawyer and hang up. If they send you mail, send it to your lawyer.

Your lawyer will request a certain amount of money as compensation for your injuries, expenses, pain, and suffering in your demand letter. If the insurance company will pay the amount you and your lawyer have specified, you do not have to do anything else. Insurance companies, however, rarely pay the initial settlement offer and prefer to negotiate. Your attorney may also initially ask for more money than you need or expect; this is a negotiation tactic. A skilled attorney knows how these negotiations typically proceed and will ensure your demand letter gets the talks off to a good start, presenting your case in the strongest possible way.

Why Do Insurance Companies Offer Quick Settlements?

Quick settlement offers are just one of the tactics employed by insurance companies to reduce accident claims. This swift move may feel like sudden relief, but it can often lead to long-term loss. The moments after an accident are often emotionally wrenching and mentally exhausting, and it’s in these moments that insurance companies may extend their first settlement offer—a calculated ploy aimed at capitalizing on your vulnerable state. They know that a quick settlement can seem like a lifesaver in the turmoil following an accident.

However, this rush to settle is no noble gesture—it's a strategic move to close the claim before you can fully ascertain the extent of your injuries and related damages. The initial settlement offer is usually lower than what your claim is worth. If you accept this offer, you'll sign away your rights to pursue additional damages later, even if your injuries prove to require extended treatment or if any unexpected complications arise.

While the immediacy of an early offer can seem enticing, particularly in light of impending bills and medical costs, it's important to be patient. Consult a skilled attorney who can help map out the full extent of your injuries and losses. The wait for a comprehensive evaluation of your damages is well worth the difference it can make in your compensation.

How Do I Know How Much My Settlement Is Worth? 

No one can estimate how much money you can expect to receive in a car accident settlement without knowing the specifics of the incident and your injuries. Every situation is unique, but several factors will go into that final dollar amount. You will discuss all these factors with your attorney, who will also help you understand what evidence to gather.

A typical car accident settlement accounts for:

  • All medical bills for treatments related to the accident
  • An estimate of any future medical treatment costs
  • Wages already lost due to the accident
  • Any wages you may lose due to your injuries
  • Pain and suffering

Considering all these factors, you and your lawyer can calculate a reasonable dollar amount to compensate you for the accident and your damages.

The Role of Personal Injury Protection Insurance 

Florida is a no-fault state. That means that auto insurance companies must compensate a policyholder for injuries, up to a point, without regard to who caused an accident. In practical terms, accident victims do not need to prove fault against other drivers to get compensation. 

Under this system, every vehicle owner is required to carry at least $10,000 in PIP coverage. If unfortunately involved in an accident, policyholders own insurance will cover their medical bills and lost wages up to the policy's limit, irrespective of who was at fault for the accident.

Negotiating a Fair Settlement Offer

Individuals reviewing documents, negotiating terms for a fair settlement at a desk.

Once the insurance company receives your demand letter, they will evaluate your demands and the strength of your case. If you can show precisely how the accident has damaged your health and property, cost you money, hurt your life, or made it harder for you to work, your case may proceed more easily. Based on the evidence, your lawyer will help you build the best case for your demands.

Once the insurance company has reviewed your case, it may make a counteroffer for less than you requested. At that point, you and your lawyer will decide whether to accept the offer, counter with a higher number or take the matter to court. 

Going to Court

If you cannot agree with the insurance company, and you and your lawyer are ready to take the case to court, your lawyer will file a draft complaint and submit it to the court that has jurisdiction over your case. Your attorney will explain the process and file all the necessary paperwork on your behalf. 

The Statute of Limitations

Every state has a statute of limitations for filing a lawsuit after an accident. In Florida, this time limit is two years. However, the deadline could be much shorter in certain situations, such as if the party responsible for the accident was a government actor. Because of this deadline, contact a lawyer and explore your options immediately after a car accident. 

In most car accident cases, you may get a settlement out of court. Still, if you wait too long to begin settlement negotiations, you may not have enough time to pursue a lawsuit if negotiations go badly. Get started as soon as possible after an accident.

Waiting for Your Settlement

You may experience a delay in your settlement if you do not have all your paperwork together, if the insurance company takes longer than usual to respond, or if you have a particularly complicated case. Your lawyer knows all this and can talk to you about ways to avoid unnecessary delays.

Gathering Bills and Paperwork

If you want to settle your case quickly, you need all the medical records and bills related to the accident. You will also need to gather all paperwork pertaining to your job and salary. Depending on your job, you may need pay stubs, bank account statements, time cards, tax records, or company records. The insurance company may request additional information depending on what you send them.

Waiting for a Response

Most insurance companies are big businesses, so even if they do not deliberately delay, it can still take a few weeks to carefully review all your paperwork, ask any questions, and decide on a response to your demand letter. If your accident involves complications, it may take longer to settle. Your lawyer can give you an idea of what to expect based on the details of your case.

Why Not Go to Court Immediately?

Most car accident cases end in settlements because settlements have one key advantage over a court trial: predictability. Once a dispute goes before a judge and jury, it is impossible to guarantee the outcome. Jury verdicts are challenging to predict, and a settlement takes away much of this uncertainty.

Once You Accept a Settlement, You Can’t Ask for More Money

Once all parties accept a settlement and, if necessary, the court signs off on it, the result is final. Even if the money you get from a settlement is less than you hoped for, you may prefer getting something over taking the risk that a jury will award you nothing. However, before you accept any offer, you must consult an attorney who can help you evaluate the pros and cons of your potential decision.

While your lawyer can’t guarantee that you will receive a particular amount of money in a car accident settlement, a skilled attorney can tell you from the outset whether a settlement is possible in your case. If the insurance company has already made you an offer, your lawyer can tell you whether pursuing a settlement or accepting the offer is worth your time.

You can usually settle legal claims from a car accident out of court, but the process is complicated. An experienced car accident lawyer can help you get the best settlement as quickly and smoothly as possible.

Reach Out Today!

Don’t Take On the Insurance Company Alone

You don’t have to fight your legal battles by yourself. The experienced personal injury lawyers at Blakeley Law Firm has more than ample experience helping our clients get every penny that they deserve from their accident claims. We know how to fight back against insurance companies that would seek to offer you less than fair settlement amounts. Don’t wait a minute longer to contact our personal injury law firm today for a free consultation to discuss your options. Your recovery could depend on it.

Jarrett Blakeley

Firm founder Jarrett Blakeley fights to get maximum compensation for all of Blakeley Law Firm’s clients. He has been practicing law since 2006 and takes great pride in representing the rights of injured individuals against the insurance companies and the law firms that represent them. He has successfully represented thousands of clients and recovered tens of millions of dollars on their behalf. Mr. Blakeley strives to give all of his clients personal attention and maximum effort and seeks to instill a firm culture that prioritizes customer service and compassion for the injured over all else. Fighting for the injured is Jarrett Blakeley’s greatest passion and he looks forward to fighting for the injured for the rest of his career.

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