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

April 26, 2024 | By DJC Law Attorneys
Should I Take the First Offer of a Car Accident Settlement?

At some point, after you submit your claim to the other driver's insurance company, the insurance company will offer a settlement to resolve your case. This offer is not a dictation or a final determination of how much you may receive for your injuries. Instead, it is how insurance companies begin the settlement process and open negotiations.

Never accept the opening offer without consulting a car accident lawyer. You will get several multiples more if you hold out for what you deserve and continue to negotiate with the insurance companies. However, you may not have the heft and presence to persuade them to raise what may have been a paltry settlement offer.

Your best action is to hire an experienced car accident lawyer in Austin right after your crash. They will deal with the insurance company on your behalf, handling all the communications and negotiations.

Not only will your attorney know how much you are due in a settlement, but they will also understand how and when to fight for it. You will not have to pay your attorney any money upfront to get them to take your case.

Your attorney works with you on a contingency basis, meaning they only receive payment if you win your case. If you do not have legal help immediately, you are putting yourself in a dangerous situation.

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Most Often, You Reject the Initial Settlement Offer Because it Is Too Low

Should I Take the First Offer of a Car Accident Settlement

Generally, do not accept the insurance company's opening settlement offer.

Occasionally, you may want to take the first offer. If the insurance company has quickly offered the policy maximum, you may have a reason to accept the settlement because you may not get any more money.

However, insurance companies will only offer the policy maximum immediately when liability is clear-cut and your damages are worth far more than the policy limits. Their clients can sue them for bad faith when they fail to settle a case because this can cause the policyholder to pay far more money in a lawsuit.

The Insurance Company Wants to Save Money to Make Money

Insurance companies are for-profit entities that handle your claim like any other business. In business, one often has to negotiate to close a matter, where each party starts with its position and will try to persuade the other to move from its opening stance.

A car accident is no different; insurance companies are negotiators and want to save as much money as possible. Every dollar they pay you is one less one in their coffers. Thus, they will seek to minimize their tab at your expense. Everything is a zero-sum game. What goes to you comes directly from the insurance companies.

Both You and the Insurance Companies Have Negotiating Positions

Each party negotiating an agreement will start with their position. Your lawyer will have you begin with your demand, which you believe reflects the damages you suffered in the car accident.

Often, the number you start with will be higher than the amount for which you eventually settle your case.

At the same time, the insurance companies will begin with a low number. You may do a double-take when you see what they offer to settle your car accident claim

Hopefully, your lawyer has prepared you by telling you the offer will not reflect reality and they will work to get you more money through the legal process.

The insurance companies' opening offer is generally only good for one thing: it signals that they intend to reach a settlement agreement with you, and the offer is just a placeholder. Once you receive the initial settlement offer, it is time to start negotiations.

Do Not Settle for Less than You Deserve to Get Money

Negotiating Settlement

When the insurance company makes you a low settlement offer, you must choose what you do next.

As an accident victim, you have the legal right to total financial compensation if you can prove that someone else was to blame for what happened. Insurance companies step into the shoes of the responsible driver, and they must pay you compensation.

Thus, they are in no position to dictate any terms to you. They can make your life harder, but they do not have the final say over anything.

Like any negotiator, you can say no when an offer is for less than you were expecting and what you deserve. A negotiator can even walk away from the table when they are not getting a reasonable offer.

However, many will recognize that they are just at the beginning of the process and will remain at the negotiating table for at least some time.

You Can Also File a Lawsuit if the Insurance Company Won't Play Ball

Of course, your lawyer will advise you to reject a settlement offer that does not fairly pay you for your injuries. At that point, you will likely counter with your offer in the form of a demand letter.

You may choose to come down from your initial number in an attempt to continue negotiations. Either way, you need not accept whatever the insurance company offers.

You are choosing to deal with the insurance company in an attempt to settle the case in a quicker timeframe than if you went to trial. A settlement agreement resolves a legal matter without the need for a trial.

However, you always have the option to file a lawsuit against the responsible driver in court. You may have no other choice but to go to trial if the insurance company is not going to be reasonable. In the end, the jury is the one who renders the final decision in any personal injury case.

You will still be dealing with the insurance companies when you are in court. One of the things that they are paid for when they collect insurance premiums is to defend their policyholder from a lawsuit. They will pay their attorneys while negotiating the settlement agreement, even if you took the case to court.

You May Negotiate With the Insurance Company Until the Last Minute

You may continue negotiating with the insurance company even after filing a lawsuit because neither of you wants to go to trial. Unless the insurance companies truly believe they should not accept liability, they will continue to negotiate with you in some form or format until the last minutes of the trial.

If you cannot reach a settlement agreement, the jury will hear the evidence of the other driver's negligence, as presented by your car accident lawyer. They will determine whether the other driver should be responsible for what happened and then decide how much money you should get for your case.

You may get nothing if the jury does not find in your favor. Additionally, a personal injury trial will add considerable time to your case.

An Attorney Gives You Leverage and Credibility in Negotiations

You need an experienced car accident lawyer to put you in the best negotiating position. Insurance companies fear litigation because, in their view, paying their attorneys drives up their costs.

You need an attorney to force the insurance companies to do the right thing by holding the threat of litigation over them.

Insurance Companies Take Advantage of You When Given the Opportunity

Car Accident Settlement

If you do not have legal representation, insurance companies will present their settlement offer as a take it or leave it proposition. They want you to feel grateful that they offer anything and will pressure you to sign the settlement agreement before you know what your case is worth.

By that time, they will have purchased your legal rights from you for pennies on the dollar. The last thing insurance companies want to see is an experienced attorney across the table from them.

How Much You Should Get in a Car Accident Settlement

Your attorney lets you know how much you can expect financial compensation for your injuries.

Once you can prove fault in your case, you can expect:

  • Economic damages compensate you for the actual monetary costs of your injuries. These damages include medical expenses, property damage, and lost income.
  • Non-economic damages pay you for the subjective harm you have suffered due to your injuries. These damages include pain and suffering, emotional distress, and loss of enjoyment of life. 

The insurance companies will have a field day if you do not know how much you are due in a settlement. They may wink at you and say, "Trust us," while taking advantage of you in a big way. Your only safeguard is an experienced car accident lawyer who looks out for you and defends your interests.

Once You Sign a Settlement Agreement, You Cannot Unsign It

Your lawyer's skill and presence can get you more money in a settlement negotiation. If you unknowingly accept too little for your settlement, there is nothing you can do to fix your mistake.

The condition of getting a settlement check is your signature on the bottom line of a document where you release the insurance company from any further liability concerning your claim. Once you sign that release, you cannot do anything to get more if you settle your claim for too little.

You must get every dollar you are entitled to after a car accident. Otherwise, the insurance company will hold onto it, which is always the goal.

You have the legal right to compensation, so you should do everything you can to fight for it. The one step you can take is to hire an experienced car accident lawyer to handle your insurance claim.

How Car Accident Lawyers Negotiate Higher Settlements

When you decide to hire a car accident lawyer, they will advise you to reject an offer that is inadequate to cover your losses. Then, they will set to work negotiating the money you truly deserve. Car accident lawyers know how to secure higher settlements for their clients whenever possible.

One key advantage of hiring a car accident lawyer is their ability to accurately assess the value of your claim. They have an understanding of what affects the value of a settlement and all your damages. This gives you a jumping off point and something to measure settlement offers against.

Car accident lawyers can present evidence of your losses. They can get all your medical records and consult with experts if necessary. By presenting strong evidence that supports your claim, they can better convince the insurance company to offer a higher settlement amount.

Furthermore, car accident lawyers have honed their negotiation skills through years of practice. You probably have not spent a lot of time going back and forth with insurance adjusters. But your car accident attorney has.

They will certainly know the tactics adjusters use to minimize settlements and are ready to counteract them. By standing firm on your behalf, they can keep negotiating for the maximum settlement possible.

Sometimes, an insurance company will never offer enough. Your lawyer will let you know when it is time to move to the next step with your claim, which is litigation in civil court. An experienced attorney can handle this entire process for you, as well.

Do Not Accept a Settlement; Consult a Car Accident Attorney First

Personal Injury Lawyer, Dan Christensen
Dan Christensen, Austin Car Accident Attorney

You may be tempted to accept the settlement offer from the other driver's insurance company. Many people are. Before making any decisions, always consult a car accident attorney..

Remember, the insurance company is not on your side, and accepting a settlement without legal representation will usually result in you receiving far less than you need for financial support.

Don't make the mistake of settling for less than you deserve; consult a car accident attorney first. Case evaluations are free.