That settlement offer from the insurance company looks tempting, doesn’t it?
The adjuster contacts you quickly following a car accident and they seem nice on the phone. They offer you a number that sounds high with bills mounting and your paycheck missing. However…..the initial offer is rarely ever what your claim is worth.
Insurance companies rely on injured victims signing too soon. They rely on the pain, stress and mounting medical bills to negotiate for them.
Learn what goes into a settlement offer. Why does it look the way it does? And what should you look for before you sign.
In this breakdown:
- What A Settlement Offer Actually Is
- Why First Offers Are Almost Always Too Low
- The Key Pieces Inside Every Settlement Offer
- Red Flags You Should Never Ignore
- How A Traffic Accident Lawyer Changes The Outcome
What A Settlement Offer Actually Is
A settlement offer is a legal agreement — not a gift.
When the at-fault party’s insurance company writes you a check, they want something in exchange. What you’re trading is your right to sue. Forever. Even if your injuries become worse next month.
That’s a big deal.
Why? Because injuries from a traffic accident can take time to develop. That sore neck you have today can become a herniated disc one year from now. That minor headache could be evolving into a brain injury. The settlement amount should take into account every dollar you will ever pay related to that accident — not just what you’ve paid up until today.
This is where hiring an experienced Arkansas personal injury lawyer can help. A knowledgeable car accident attorney will know how to properly value a claim before any forms are ever signed. They see past the presented dollar amount and assess what those injuries are truly going to cost you for a lifetime.
Why First Offers Are Almost Always Too Low
Insurance companies are businesses. Their goal is simple — pay as little as possible.
Its not a conspiracy theory…. That’s just how they make money. The less they pay you, the more they pocket.
Statistics prove it. 73% of unrepresented claimants settle with the insurance company’s first offer. Studies have found those initial offers are typically only about 10-20% of the claim’s value.
Here’s why first offers come in so low:
- The adjuster wants to close the file fast
- They know most people don’t understand what the claim is worth
- Medical bills often keep growing after the offer is made
- Pain and suffering gets left out entirely
- Future lost wages are completely ignored
Jumping to sign fast is the trap. The numbers come down once medical slows and when you see the whole picture losses are normally much greater than that initial figure.
The Key Pieces Inside Every Settlement Offer
Every settlement offer has the same basic parts. Knowing them helps spot what’s missing.
Medical Expenses
This includes hospital bills, surgeries, prescriptions, physical therapy and any future treatment related to the accident. Many will only offer to pay for what you have paid already, not what you will need in the upcoming months.
Lost Wages
It encompasses income lost during recovery time. Lost earning capacity should be included if you are unable to return to similar work.
Pain and Suffering
This is the part insurance companies love to hate. It covers your physical pain, emotional suffering and loss of enjoyment of life. It can be substantial in severe cases… but often times is where the insurance companies cut the MOST.
Property Damage
The vehicle, personal items inside the car, and anything else damaged in the wreck.
Future Costs
Long-term care, ongoing therapy, mental health support, and any permanent disability accommodations.
If any of these pieces are missing or shrunk down, that’s a warning sign.
Red Flags You Should Never Ignore
Some settlement offers look fine on the surface but hide problems underneath.
Watch out for:
- One that is made prior to completion of treatment …you cannot value injuries that have not been fully diagnosed
- If you are told you must sign within a few days. Legitimate offers do not expire that quickly.
- Did NOT break down how they calculated the number —-> suspicious
- A full release clause. Once signed, you can never be claimed again.
- The adjuster needing a recorded statement first …… those statements are used to reduce their offer.
Approximately 95% of personal injury lawsuits are resolved prior to trial. The difference between a reasonable settlement and an unreasonable one can be significant. The injured party who settles without realizing these red flags may lose tens of thousands of dollars of recoverable money.
How A Traffic Accident Lawyer Changes The Outcome
Hiring a traffic accident lawyer changes the math.
Insurance companies handle claims made by represented claimants in a completely different manner than those made by claimants who are not represented by an attorney. Adjusters understand that if they try to strong arm a person without an attorney, they will likely get a lawyer. Once a lawyer gets involved, the case is headed to court. You can bet that offer will change quickly.
A good traffic accident lawyer will:
- Calculate the full value of the claim, including future losses
- Handle all communication with the insurance company
- Gather medical records, expert reports, and accident documentation
- Negotiate from a position of strength, not desperation
- Take the case to trial if the insurer won’t play fair
Over 5 million Americans suffer injuries from motor-vehicle accidents every year. The cost to the nation exceeds hundreds of billions of dollars. Your signature on a low settlement can become years of out-of-pocket expenses.
A traffic accident lawyer’s job is to make sure that doesn’t happen.
The Bottom Line
A settlement offer is not a gift from the insurance company.
It’s a very mathematical calculation to get you to settle this file for the lowest dollar amount possible. Every injured person needs to know this before signing anything:
- What the offer actually covers
- What it leaves out
- Whether the timing makes any sense
- What the long-term costs are really going to be
The injured party that takes their time, reads the fine print and consults a traffic accident lawyer WILL ALWAYS BE better off than the one who signs quickly.
Take the time. Ask questions. Get the offer reviewed by a professional.
After all, there is no arguing once that signature is on the paper.