What Happens if I Reject a Settlement Offer?

You should be aware that it’s a routine tactic for an insurance company to lowball their first settlement offer. The problem with unreasonably low offers is that they may not even begin to cover your medical bills and other out-of-pocket expenses. And that doesn’t even include any pain and suffering you’ve endured through the thoughtless or reckless acts of another party.

Though it’s your right to reject the insurance company’s first offer, it would be best to seek legal advice before doing so. An expert personal injury lawyer will be able to review all the facts of your claim, review policies, and compare the offer with similar offers for claims just like yours. Furthermore, they can answer the question, “What happens if I reject a settlement offer?” in great detail and help you take the next steps to demand a more reasonable offer.

Why do insurance companies present you with lowball offers?

Generally speaking, insurance companies try to protect their bottom line. When they pay out large claims, there is less profit for the company, so it makes sense that they protect themselves. But there are some legitimate reasons why you may get a low offer at first.

The insurance company determined you were at fault in an accident: There are “at-fault” and “no-fault” states when it comes to car accidents. In a no-fault state, if the insurance company determines you were under the influence, intentionally caused an accident, or were doing other illegal activities such as drag racing, they could legitimately deny paying out your PIP coverage. The same goes for at-fault states, but since at-fault states can assign percentages of blame, they may lowball an offer if they feel you were partially to blame.

The insurance company under-calculated your losses: It’s common practice for insurance adjusters to use formulas or computer software to place a value on claims. These methods are not foolproof. Sometimes a legitimate mistake can be made, or you can provide more details of your losses to get a different offer. 

You’re dealing with an insurance company that is acting in bad faith: Acting in bad faith is not a legitimate reason to get a lowball offer. Bad faith insurance practices are more common than you think, and insurance companies acting in bad faith will lowball offers regardless of the facts presented to them. When you suspect an insurance company is being dishonest, it’s time to get a lawyer to represent you. Having a Morgan & Morgan personal injury at your side makes insurance companies take notice due to our legendary reputation of taking them on and winning for our clients.

What not to do if the insurance company is lowballing its offer

Don’t make the mistake of caving to the insurance companies. When you give up, they win, and you’re stuck with bills you shouldn’t have to pay!

Don’t accept partial payment: Most insurance companies do not offer partial payment, so don’t get tricked into signing anything with the hopes they’ll make good on the “rest” of the offer. Insurance companies require you to sign a release before paying anything out, and this release is a legal document that takes away your right to sue for more money later. If medical bills are piling up and you’re still getting treated, you’re probably worried about paying them. Instead of panicking and taking less than what your claim is worth, look at alternatives like your own health insurance or public services like Medicare and Medicaid.

Don’t give up: We are well aware of how frustrating it can be negotiating with insurance companies, especially when you’re recovering from an injury. However, it’s better to stand your ground so you can get the compensation you deserve. An expert personal injury lawyer can take a great deal of the load off your back and take over negotiations while you work at getting better.

How to respond to a low settlement offer

You have a few choices when deciding how to respond to a low settlement offer which are below.

Reject and negotiate: You should be aware that when you outright reject an offer from an insurance company, that offer is permanently taken off the table. You will be unable to change your mind later. When you reject an offer, the next step is to try to negotiate with a counteroffer. While you can do this by yourself, it’s far better to have a lawyer working for you. They will ensure the counteroffer is something that is reasonable. You don’t want to ask for more than what your claim is truly worth, and an experienced personal injury lawyer will have the background and claim knowledge to determine this. The insurance company can either accept your counteroffer or reject it just as you did theirs. 

A counteroffer is something that should be done in a professional manner and should include evidence as to why the initial offer was insufficient. This evidence can include documentation of your losses such as medical bills, damage to property, lost income, and other expenses. Additionally, you can include statements from your doctor detailing any permanent disabilities or statements from a mental health professional about how your injuries have caused anxiety, PTSD, or depression. Injuries like these should not be discounted just because they are noneconomic damages. 

If the insurance company is negotiating in good faith, they may accept this further evidence and come back with an offer that is more reasonable than the first.

Fight their “take it or leave it” tactic: Unfortunately, some insurance companies are calculating and depend on coercive tactics to frighten claimants into accepting insufficient offers. When they take a heavy-handed approach to negotiations, everything becomes more problematic. 

These are unethical tactics, but they know they work, especially when you’re dealing with mounting healthcare costs and dealing with the emotional toll of the accident. Don’t let them pressure you with a “take it or leave it” approach. 

When you know they’re fighting dirty, the best way to counter is to maintain meticulous notes on all communication. Even better is to have a lawyer do this for you. Bad faith tactics are a serious matter, and insurance companies held accountable can pay big through punitive damages in a lawsuit.

File a lawsuit: A lawsuit is the last resort after all negotiations have failed. In fact, the courts expect parties in a dispute will have taken every step possible to negotiate out of court. However, filing a lawsuit doesn’t necessarily mean it will make it all the way to court. Your lawyer will put together a solid case to show the insurance company that they’re likely to lose. Typically, when the insurance company sees that you’re also playing hardball, they may come back to the table for further negotiations because when insurance companies lose in court, it ends up being far more costly than just paying what is fair.

How long do you have to accept a settlement offer?

An offer will usually have an expiration date included in the offer. However, it’s up to the insurance company’s discretion to revoke the offer, too. The timeline in a settlement will depend on the number of offers and counteroffers. Generally, an insurance company takes a few weeks to respond to an initial demand letter to pay on a claim. From there, it may take weeks or months to negotiate to a point where both parties feel that the settlement is fair.

It’s important to note here that every state has a statute of limitations which means there is a time limit on bringing injury cases to court. If you wait too long, the door is closed from getting compensation after an accident. Furthermore, when you wait to make a claim for any accident, it gets harder for all parties involved, and you’re more likely to have your claim rejected.

Never think an insurance company is on your side

Many big insurance companies spend tons of money on advertising campaigns to make customers feel like they can be trusted. However, don’t be fooled. The insurance industry pays its CEOs more than any other industry. It’s a for-profit business, and its bottom line is the most important thing. 

Some of the most well-known names in the industry engage in tactics to deny, refuse, delay, and confuse in an effort to reap even more profits. Here are some of the most egregious examples:

A 60-year old woman from Seattle who held a 2 million dollar policy with Farmer’s was denied coverage for her accident because the other driver that caused the accident did it in a moment of road rage. The insurance company said it wasn’t technically an “accident” because of the road rage, and therefore, she wasn’t covered. 

Farmer’s insurance company had an employee incentive program that offered prizes to adjusters who met low payment goals.

A 77-year-old woman from Montana purchased long-term care insurance from Conseco. Still, when it came time for her to collect, they used tactics like deliberately mailing the wrong forms and denying claims when the “incorrect” paperwork was returned. This trick was used in the hopes she would either give up or simply die.

A police lieutenant in Mississippi was denied coverage for his homeowner’s policy after Hurricane Katrina even though he had hurricane insurance with Nationwide Insurance. Their reasoning was the confusing “anti-concurrent” language in the policy, which meant his hurricane insurance was negated because his home had also been flooded, even though his insurance agent told him he didn’t need flood insurance.

Why hire Morgan & Morgan to help me with an insurance settlement?

Make no mistake; insurance companies are counting on you to give up. Now is the time to fight. You shouldn’t be alone asking yourself the difficult question, “what happens if I reject a settlement offer.” Our personal injury lawyers are here to help and make sure you get the best possible settlement for your injuries. 

When you go up against big names like Nationwide, Farmer’s, and Allstate, you can bet your last dime they’ve got a slew of lawyers on their side ready to do just about anything to convince a jury they shouldn’t have to pay. That’s why we have hundreds of trial-ready lawyers with a load of battle experience behind them. Not only are our lawyers some of the best, but they also have an exceptional support system consisting of thousands of legal staff.

At Morgan & Morgan, we learned a long time ago how dirty insurance companies can be when it comes time to pay out on legitimate claims. Don’t go it alone, and don’t worry about coming up with the money to pay for one of our lawyers. We take payment on a contingency fee basis, meaning we don’t make anything unless you do. Contact us today for a free case evaluation and let us review your settlement offer to make sure you’re getting the best possible compensation.

What happens after you accept a settlement offer?

Getting the actual settlement can take weeks or more. The actual timeline for a payout should be part of the negotiating process. When the check is sent, your lawyer will put it in a trust fund until it clears the bank. Finally, your lawyer takes their fees and assists in paying your medical creditors and any other outstanding liens from your injuries.