Before you reject an insurance claim offer, it’s important to know the consequences and when accepting an offer is in your best interest. Here, we’ll explore the reasons for rejecting an offer, what happens when you reject an insurance settlement offer, and the steps to take if you decide not to accept the agreement.
Reasons to Reject a Settlement Offer
Accepting a car insurance company’s initial settlement offer can be tempting. The bills may be piling up, and the money they offer may feel like a lifeline. However, in many instances, accepting this initial offer is not in your best interest. Insurance companies, having been through this countless times, may lowball the first offer in hopes you’ll settle and move on, saving them money in the process.
It’s essential to thoroughly evaluate the offer and ensure all your expenses are covered. These expenses include damages to your vehicle, medical costs, lost wages, and pain and suffering. You should also consider the future impact of your injuries. Could it lead to additional medical treatments and associated costs? Will it affect your long-term ability to perform the tasks related to your job and, therefore, your earning abilities?
If you’re not happy with the settlement offer or uncertain that it will cover all your expenses, it’s time to head to the negotiating table and stand up for your rights. If you feel that the insurance company is pressuring you and rushing you to settle, take a step back and request time to evaluate it.
The Process After Rejecting a Settlement Offer
If you decide to reject an insurance claim offer, you’ll need to do so in writing. This rejection letter should be professional and include a counteroffer. It states why you are not accepting the offer and provides evidence that the amount is insufficient to cover your costs. You may refer to the accident photos, statements from witnesses, medical bills, and employment records to support your rejection and counteroffer.
Include any emotional trauma you may have experienced as a result of your injuries and how it affects your daily activities. In the spirit of compromise, consider reducing your initial demand while ensuring it covers all your expenses
Risks and Benefits of Rejecting a Settlement Offer
So, what happens when you reject an insurance settlement offer? The benefits of rejecting a settlement offer are clear. You’re attempting to receive the most money possible, ensuring it covers all your costs.
However, demanding too high of an amount may result in the insurance adjuster completely rejecting your claim. If this occurs, your only course of action is a time-consuming and expensive lawsuit. It may also result in delays in receiving compensation or the discovery of new evidence by the insurance company that may hurt your case.
Before you reject an insurance claim offer, weigh the pros and cons. Rejecting it shows you’re serious and will not accept a lowball offer. Conversely, it results in an unresolved case and more time before you may obtain the funds you need to cover your losses.
Preparing for Negotiations
The negotiation stage is critical in your fight to obtain a fair settlement. As with your initial demand letter, it’s crucial to come prepared with documentation proving your case and the validity of your request.
Additional documentation may include ongoing medical care and costs, letters from your medical provider, and a statement from your employer demonstrating how the accident affects your ability to perform at work. You may include letters from family or friends discussing your behavioral or emotional changes. Keep a journal to document the effects of the car accident on your daily life.
Make sure you enter the negotiations knowing your bottom line. What do you consider a fair amount? When will you leave the negotiating table and potentially file a lawsuit?
When negotiating with an insurance adjuster, sticking to the facts and leaving your emotions out of the proceedings is important. Remember that insurance adjusters are trained to save the company money, reduce the amount of compensation, and deny liability. The best way to ensure you receive a fair and just settlement is to stick to the facts and go into the negotiations prepared.
Considering Legal Assistance
Consider legal assistance if you feel overwhelmed during this process or need help with how to proceed. Additionally, if the insurance adjuster seems overly anxious to settle or is pressuring you, it may be in your best interest to obtain the services of a professional.
Attorneys have extensive experience negotiating on their clients’ behalf and may, in many cases, know the insurance adjuster. They can help you calculate a full settlement amount that includes past, current, and future damages—the economic and noneconomic toll the accident has taken on your life.
Many personal injury lawyers offer no-cost case evaluations or free initial consultations. They can give you an idea of what your case is worth and how they would prove it. In many cases, they also offer a contingency agreement, which means they get paid only after you receive money from the insurance company.
Determine the cost versus the benefits when evaluating if hiring an attorney is right for you.
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Alternatives to Settling
If negotiations don’t result in a satisfactory settlement, there are other options:
- Mediation and Arbitration: Mediation and arbitration are two ways to reach an agreement without going to court. In mediation, a third party guides you and the insurance company through the process, hoping both parties can find common ground.
Arbitration is different in that the arbitrator listens to both sides and then makes a settlement decision regarding the case. Their ruling may be binding, which means it cannot be appealed. If it is non-binding, either party can refuse it and continue to litigate their claim in court.
- Filing a Lawsuit: If you and the insurance adjuster cannot agree, you can file a lawsuit. This is usually a last resort, with only about 5% of cases going to court. Filing a lawsuit is sometimes enough to bring the adjuster back to the negotiating table.
- Small Claims Court: Each state limits the maximum amount you can recover in small claims court. For instance, if your settlement demand is less than $20,000, you may attempt to settle the dispute in small claims court if you live in Texas. In Kentucky, the maximum amount is $2,500.
Conclusion: Making an Informed Decision
Deciding to reject an insurance claim offer should be undertaken with all the facts at hand. Know the physical and emotional costs, lost wages, and how it may affect you in the future. Should you reject it, be ready with a counteroffer and begin the negotiating process.
If you feel overwhelmed or unprepared, consider the services of an attorney. Look for someone who offers free consultations or complimentary case reviews. They may provide valuable insights, ensure you ask for the right amount of money, and help you secure the most compensation.
