Should I Take the First Offer of a Car Accident Settlement?

April 8, 2024 | By Steffens Law Accident Injury Lawyers
Should I Take the First Offer of a Car Accident Settlement?

Being in a car accident is stressful by itself. You likely have a damaged or totaled vehicle and injuries, and you can be out of work if your injuries are severe enough. Now, you have to deal with insurance negotiations on top of your injuries and other damages.

When the other driver’s insurance company makes a settlement offer, should you take it? It might seem like an easy way to take the insurance claim off your plate. You can receive a check and never have to deal with insurance adjusters regarding this accident again.

While a quick settlement might sound like the easy way out, never rush to accept the first offer. Doing so can put you in a dire financial situation for months or years to come. Instead, have a car accident lawyer review any settlement offers before you accept anything.

Schedule a Free Consultation

What Is a Car Accident Settlement? 

Car Accident Settlement

A car accident settlement is an agreement between the injured plaintiff and the person or entity defendant who caused the car accident. Most often, the settlement is made between the plaintiff and the defendant’s auto insurance company, as the insurer covers the at-fault driver’s liability.

In a car accident settlement, the defendant agrees to pay a sum for the plaintiff’s damages. These damages are usually property losses, medical bills, pain and suffering, and lost earnings. In exchange for the settlement, the plaintiff agrees to pursue the case no further and not file a lawsuit.

The parties in a car accident often agree to a legal settlement because it saves time, money, and hassles that usually accompany a lawsuit and trial. Car accident settlements are so preferable for both sides in most cases that most auto accident claims end in a settlement.

You may reach a car accident settlement before it goes to court or even during litigation. While most car accident claims end a settlement, talk to a lawyer to ascertain your claim’s full value before settling. The insurance company may offer a low initial settlement that does not consider the full value of your case.

Understanding The Insurance Company’s First Settlement Offer

After a car accident caused by another driver, their insurance company will be liable for your property damages, medical bills, and other losses.

An accident that totaled your car, broke your arm, and you can’t work for a month, might have resulted in $40,000 in short-term expenses—although you don’t fully understand your future medical needs yet.

Assuming that the driver has car insurance, a settlement offer for your damages will come eventually.

In such a situation, always retain an experienced car accident attorney. Your lawyer will protect you and ensure you receive maximum compensation for your substantial losses.

Perhaps the insurance company for the other driver accepts liability and offers you $40,000 on the dot. This might seem like an acceptable offer, given the bills in front of you. However, you may deserve much more.

Whether the insurance company offer comes to you or your attorney, remember several things about the initial settlement offer: 

  • The first offer may not offer the total value of your claim. The insurance company knows you don’t know the total value yet but probably wants to get you to take a settlement before you hire a lawyer.
  • The first offer will probably come early before you fully understand the severity of your injuries and future medical needs.
  • The first offer is rarely the last. It is merely the start of negotiations and a test of whether you know what you are doing.

If you have a car accident attorney, they will probably tell you to reject the initial offer as far too low. They will have an idea of what a fair counteroffer is. The negotiations can be a back-and-forth conversation over a few weeks, even months. Patience can get you the most money.

Why You Shouldn’t Take The First Settlement Offer

You should think of the first settlement offer from the insurance company as the beginning of the settlement negotiations. The usual tactic is to make an early settlement offer that doesn’t consider all of your potential damages and will not pay you the total case value.

The initial offer is usually low because the insurance adjuster handling the claim works for an insurance company whose goal is to pay as little as possible in claims. At every step of this process, the insurance company will try to reduce what they have to pay you.

This means the insurance adjuster will commit the smallest amount to make the claim disappear.

They may offer you a few thousand dollars the day after the accident, especially when they know their driver was at fault. Or they might offer to ‘cover your medical bills’ but make no mention of lost earnings or pain and suffering compensation. These are lowball offers that should never be accepted.

Never Settle Too Soon

Never Settle Too Soon

After a car accident, you may want to get money in your pocket. After all, the crash might have wrecked your car. You can have serious injuries and miss work. Insurance companies often dangle small amounts of money in front of injured people. They hope they will quickly take the token amount to close the case.

Don’t settle too soon. You probably have not completed your medical treatment plan yet, so you don’t know what your case is worth.

You will need to sign a release if you take a low initial settlement offer. This means that you give up your right to take legal action in the future. So, even if you find out later that your car accident injuries are far worse than you thought, you have no right to sue for more money.

What if you need surgery or rehabilitation you didn’t know about earlier?

If you signed a release for a token settlement, it’s too late. Even if you realize you accepted far less than you need to cover your losses, there are often no options to revisit the matter.

Never risk this. Consult a car accident lawyer from the start. They can advise when an initial offer is too low and negotiate for the higher amount you deserve.

How a Car Accident Lawyer Negotiates a Fair Settlement

Car accident lawyers regularly handle insurance negotiations. They know how adjusters work at the negotiating table, and they bring their resources and skill to support your claim.

Your car accident lawyer will understand the true value of your losses and will calculate them accurately. They go beyond your immediate medical expenses and property damage, considering the long-term impact of the accident on your life.

They take into account factors such as lost income, future medical treatments, and emotional distress, presenting evidence to support all your past and future losses. This comprehensive evaluation of your damages ensures you know what your case is really worth, so you do not accept anything less.

In negotiations, your car accident lawyer will refuse to give in to lowball offers from insurance companies. They know the tactics used by insurance adjusters to minimize payouts and will fight to ensure you receive fair compensation.

With their knowledge of the law and negotiation skills, they can counter low offers and argue for a higher settlement amount that truly reflects the extent of your damages.

An experienced car accident lawyer is not afraid to bring your case to court if necessary. By making it clear that litigation is a real possibility if the insurance company fails to make a favorable offer, they demonstrate their commitment to fighting for your rights.

This willingness to pursue litigation serves as a powerful deterrent to insurance companies, often motivating them to negotiate more fairly. Having a car accident lawyer handling your negotiations ensures that you can explore all available options to secure the compensation you deserve.

Getting a fair settlement for a severe auto accident can be more difficult and time-consuming than you might like. However, being patient is worth getting all the financial recovery you need.

It is always better to have your case reviewed by an attorney. They can handle the insurance negotiations, and you can worry about your recovery.

You rarely pay out-of-pocket costs when hiring a car accident attorney. Their legal fees are taken from whatever settlement or jury award they obtain for you. If they don’t get compensation for you, there are no legal fees to pay.

Calculating Your Damages to Maximize Your Settlement

Calculating Your Damages to Maximize Your Settlement

If you have severe injuries and property damages, you are far better off having a car accident attorney handle insurance negotiations and settlement offers. Without a lawyer who understands negotiation tactics and the actual value of your case, you are an easy mark for greedy insurance companies.

On your own, you probably don’t know what your case is worth. Many injured parties think they are only entitled to vehicle repairs and current medical bills in a settlement. But you can be entitled to much more in a severe accident case with major injuries.

Calculating your damages is critical to getting total compensation, including:

  • Current and future medical expenses
  • Rehabilitation and physical therapy
  • Lost current and future income
  • If you are disabled from the accident, loss of the ability to earn a living
  • Pain and suffering
  • Mental and emotional anguish

Using the earlier example, you might think a $40,000 settlement is a lot of money. But that might just cover your current medical expenses and nothing else.

Once you pay your medical bills, you get nothing for your lost earnings or rehabilitation. If you accept that small first offer, you will not recover financially.

Retain a car accident lawyer early in the negotiation process. They know the rules to negotiate effectively with an insurance company. Car accident lawyers go to bat against stingy insurance companies every day.

You might never have to negotiate with an insurance company; it isn’t easy when much money is on the line. But your lawyer is familiar with insurance company tactics and how they will use low offers and stalling to pay you less.

Negotiating effectively with an insurance company requires being aggressive, clear-headed, and persistent, combined with extensive legal knowledge. When you suffer an injury and are unfamiliar with the law and insurance negotiations, you are at a disadvantage, and the insurance company knows it.

Your attorney will work only for you and is motivated to get you the best settlement possible. They are only paid if they obtain money for you in a settlement or lawsuit so that they will fight tirelessly for your best result.

Also, studies have shown that hiring a car accident lawyer can significantly increase a settlement amount.

Even when you consider the legal fees they charge at the end of a successful case, you will still usually come out ahead with an attorney fighting for you. The attorney will review your case for free at the beginning and let you know if hiring them is worth it.

Generally, car accidents that are minor fender benders without injuries can be handled without an attorney. However, if you have serious property damages making the car undrivable and have severe injuries requiring ongoing medical care, you should almost always retain an attorney.

Contact A Car Accident Attorney Today 

William V. Steffens, Car Accident Lawyer
William V. Steffens, Car Accident Attorney

If you suffered a severe injury after a car accident, it is almost always a grievous mistake to go against the insurance company alone. You can end up with a low settlement that doesn’t pay you nearly enough for your medical bills and other losses.

Let an experienced personal injury attorney handle the insurance negotiations so you can rest and heal. Contact a law firm in your area today for legal assistance.