If an insurance company offers to settle your accident or injury claim, you have the option to refuse. While insurance companies and adjusters may try to make it seem like an offer is the best and only one you’ll get, that’s rarely true. A skilled attorney can often negotiate with an insurance company on your behalf to get you far more.
Insurers have a strong incentive to pay you less than you deserve. They make low offers to claimants like you hoping you’ll accept and save them money. They may even try to pressure you into taking their deal. Don’t fall for their tactics. Connect with an experienced car accident attorney who can advise you about accepting or rejecting settlement offers and who knows how to get you full compensation for your loss.
When Might an Insurance Company Offer You Money?
Insurance companies aren’t piggy banks. They don’t offer people money out of the goodness of their hearts. An insurance company will only ever offer to pay you money if they believe they have a legal and contractual obligation to do so.
In the aftermath of an accident, it’s pretty common to receive an offer from an insurance company in two distinct contexts.
To Settle a Claim Under a Policy Covering You
Your own insurance company may offer to settle a claim you’ve submitted under the terms of an insurance policy you purchased, or that someone purchased for your benefit, that covers you against a specific type of loss.
For example, suppose you carry auto collision insurance to cover the cost of repairing or replacing your car if it gets damaged in a crash. If you totaled the car in an accident, your insurance company might offer you a settlement for an amount it claims is the car’s fair market value.
To Settle a Claim Under a Policy Covering Someone Else’s Liability to You
Someone else’s insurance company may offer to settle a claim you’ve made or could make in the future, under an insurance policy that the company issued to cover its policyholder’s liability to you for accident-related damages.
For instance, suppose you got hurt in a car accident that was the other driver’s fault. The other driver carries auto liability insurance to cover the damages the driver caused. Whether or not you’ve yet submitted a claim against that insurance, the driver’s insurance company may offer you money as a settlement of the driver’s liability for your accident-related damages.
Offers Differ From Voluntary Payments
As mentioned, insurance companies aren’t in the business of handing out free money. They open their checkbooks only when they know they have an obligation to pay benefits under the terms of an insurance policy they’ve sold to a customer.
But it’s important to draw a distinction between an insurance company paying a claim outright on one hand and making an offer of payment on the other. It’s common for insurers to pay many relatively low-value claims in full without any discussion. They don’t make an offer to pay a specific amount and wait for the policyholder to accept or reject it, in other words, they just go ahead and pay the amount claimed because it’s indisputably covered or just not worth fighting over.
Offers, in contrast, occur in situations where there’s actual or potential uncertainty about whether or how much an insurer will pay. They’re most common in relatively high-dollar claim scenarios.
An offer amounts to an insurer saying to someone, in effect, “We’re willing to pay you $X for your claimed loss or damages, but only if you’re willing to let us off the hook for paying you anymore.”
Or to put it another way, an offer comes with an implied threat to put up a fight about your claim, depending on how you choose to respond.
Why You Need a Lawyer to Review Insurance Company Offers?
Insurance companies are expert negotiators. Their business revolves around placing a value on risk. They settle millions of claims per year and possess detailed data and analytics about accident costs and human behavior to help them make payment decisions.
It’s safe to assume, in other words, that any offer an insurer makes to you directly not through a lawyer, but straight to you reflects the insurer’s careful and deliberate calculation of the absolute minimum amount of money they believe they need to put on the table to make your claim go away. Offers aren’t acts of generosity. They don’t give you the benefit of the doubt or err on the side of overpayment. They’re precisely calibrated bets on how little an insurance company can get away with paying to resolve your claim.
Of course, insurance companies won’t tell you that. They’ll make it seem as if an offer to settle a claim or potential claim is the most you can hope to receive. An offer might come wrapped in friendly overtures to make it seem like a gift, or arrive in the form of a hostile letter that practically hisses “Take it or leave it.”
Anything to conceal the truth: that they’ve offered less (likely far less) than you deserve and have the right to receive, and that they’ll probably pay more if you know how to make them do it.
You Have the Right to Refuse or Better Yet Defer to Your Lawyer
An insurance company can’t force you to say yes to an offer to settle a claim or prospective claim. You have every right to turn it down.
But rather than giving a definitive answer, you might want to consider a more strategic response. You can refer the insurance company to the attorney you’ve hired to handle the claim, for example. If you don’t have a lawyer yet, you can defer giving an answer until you do.
Just don’t wait too long to get the legal help you need. Even when an offer falls short of what you deserve to receive, it’s usually best not to let it go stale. Having an attorney respond promptly to an offer on your behalf is typically the most productive way to kickstart negotiations that lead to a higher settlement.
Yes You Really Need a Lawyer
If you’ve read this far and wonder when you’re going to get advice about how to negotiate with an insurance company after refusing an offer, you’re out of luck. Because the fact is, the only realistic way to obtain maximum compensation from an insurance company that has offered you a settlement is to hire a lawyer to handle the claim on your behalf.
Trying to negotiate a better offer from an insurance company on your own is a terrible idea. Don’t do it. You need a lawyer for that task, and here’s why.
Lawyers Level the Playing Field in Negotiations
Negotiating with an insurance company is a skill that requires the detailed legal knowledge, familiarity with the insurance industry, and lots of practice. Insurance companies negotiate settlements every day. You need a professional in your corner who knows those ropes as well as the insurers do.
Personal injury attorneys deal with insurance companies almost every day. They speak the language of insurance agreements. They know what motivates insurance adjusters. They understand the evidence and arguments that will capture an insurance company’s attention and move the needle on the size of the settlement an insurer will offer.
Lawyers Can Evaluate the Size of Your Claim
You may have the right to demand far more money from an insurance company than you realize. Accident victims, for example, often express surprise at the numerous types of damages they can claim from a party who is liable for their losses, and that party’s insurer.
You might have the ability to pursue payment for:
- Medical and other expenses related to your accident
- Lost earnings and job benefits, including the value of paid time off you, ’ve used
- The cost of repairing or replacing damaged property
- Your physical pain and emotional distress
- Your inconvenience
- Your diminished quality of life
- The at-fault party’s extreme or intentional misconduct
Hiring an experienced lawyer ensures that any claim you make seeks the maximum compensation to which the law entitles you. People who try to negotiate with an insurance company on their own frequently leave significant amounts of money on the table, simply because they don’t realize they can ask for it.
Lawyers Know How to Build a Strong Claim
An insurance company won’t pay you anything unless they believe you have a valid claim that you could prove in court, if necessary, using admissible evidence and convincing legal arguments. Lawyers know how to investigate, research, and construct solid claims that stand up to an insurance company’s (and a court’s) scrutiny.
They understand the steps required to lay the groundwork for a persuasive, coherent claim that leaves no wiggle room for the insurance company. That’s the kind of claim you need if you want top-dollar results.
Lawyers Get Your Claim Taken Seriously
Insurance companies make settlement offers directly to accident victims like you because it puts them at an advantage. They’re seasoned veterans when it comes to valuing and negotiating settlements, and you’re not. They hope to exploit that mismatch.
By hiring a lawyer, you send a signal that your claim deserves serious attention. It communicates that they won’t be able to brush you aside by offering to pay a fraction of their true financial liability. And, if your claim ends up in litigation, the presence of a lawyer on your side sends the same message to a judge and jury.
Lawyers Work for You on Contingency
Hiring a lawyer to handle your claim usually won’t cost you a dime upfront. Personal injury lawyers almost always work on contingency. That means their fee consists of a portion of any of the money they secure on your behalf. You don’t have to pay them if they don’t get you results.
How Do You Know if an Insurer Makes an Offer in Bad Faith?
Insurance companies make low offers for a host of reasons. Some reflect legitimate disagreements or doubts on the part of the insurer about the validity or size of your claim. But others constitute bad faith tactics to try to escape their liability for less than they owe.
Bad faith tactics often violate state insurance laws. If an insurance company acts in bad faith in handling your claim, you may have the right to take legal action seeking damages for that violation, in addition to demanding payment of your claim.
Signs of bad faith on the part of an insurance company can include:
- Failure to communicate about your claim leaves you in the dark about its status or timing.
- Undue delay in processing your claim, which may violate deadlines set by statute for them to take action on it.
- Denying or reducing a claim for an invalid reason, such as a deliberate misreading of the terms of an insurance policy or ignoring critical facts.
- Inadequate investigation of a claim that fails to consider known, relevant evidence.
- Misrepresentations about your rights, such as falsely claiming you must accept an offer or mischaracterizing the basis for their claim decision.
These are just some examples of potential insurance companies’ bad faith. Contact an experienced lawyer immediately if your gut tells you that an insurance company has dealt with you unfairly in connection with processing or offering to settle your claim.
Contact a Lawyer After Receiving any Offer from an Insurance Company
If an insurance company made an offer to settle your claim or potential claim, don’t try to evaluate or negotiate it on your own. That would be exactly what the insurance company wants you to do. Going toe to toe with an insurer on your own gives them a huge advantage. It almost always results in claimants like you receiving far less money than they deserve.
Experienced Finkelstein & Partners, LLP’s personal injury attorneys in New York want to help you negotiate and evaluate insurance settlements. They know how to convince, and (when necessary) force, an insurance company to pay the full amount you have the right to receive by law. To learn more about what an attorney can do for you after you receive an offer from an insurance company, contact one in your area today for a free consultation.
Mr. Finkelstein is the Managing Partner of Finkelstein & Partners, LLP. He has become a noted consumer activist through his representation of injured individuals against corporate wrongdoers and irresponsible parties.
An accomplished litigator, Mr. Finkelstein has represented Plaintiffs in wrongful death and catastrophic personal injury cases. He has successfully handled dozens of multi-million dollar cases.