Despite laws in place and efforts to raise awareness regarding roadway safety, car accidents are a part of life in today’s society, with many of these accidents resulting in injuries or fatalities. Among the most stressful aspects in the aftermath of a car accident is having to deal with insurance providers and considering the compensation insurance companies offer to settle the accident claim.
An insurance settlement should cover your losses, including all past and future medical expenses, lost income, pain and suffering, and other losses. Many claimants are surprised to receive an adequate offer as soon as they submit claim information, or even during their first communications with the insurance company.
In many cases, accident victims make the mistake of accepting the insurance provider’s first offer, often due to either falling prey to persuasive tactics by insurers or the belief that better offers may not be available if they turn down the initial offer.
With so much on the line and so many losses a settlement must cover, knowing how to handle these first offers is crucial. Simply put, you should never accept any settlement offer at all without having an experienced attorney review it.
Further, understanding the general car accident settlement process and an experienced car accident attorney’s role in your negotiations is in your best interest. Your first step before speaking with insurers should always be to consult a car accident lawyer near you.
Overview of Accident Settlements
Statistically, only a small number of car accident injury claims ever reach trial, with most cases getting settled through negotiations between the injured party and the insurance provider representing the responsible party. Insurance companies try to move through this settlement process quickly by attempting to get accident victims to accept the first offer submitted. Rather than accept the initial offer, however, you should carefully consider all your options.
Taking the insurance company’s initial offer without knowing the other potential factors in your situation can leave you with a less-than-optimal outcome. Knowing how to look at the offers and what aspects to consider can help you make more informed decisions.
Understanding How the Settlement Process Works
Parties generally engage in the car accident settlement process to avoid going to trial, which can require significant resources. Following the reporting of the accident, the insurance provider representing the responsible party will determine liability. The insurer will likely gather information and witness statements, and if the policyholder is at fault, the adjuster might submit an immediate settlement offer. The amount of the settlement offer varies depending on different factors.
Key Factors Influencing Settlement Amounts
Some of the important elements taken into account when estimating settlement amounts include:
- Liability determination — That party found to be at fault for the accident (and the extent to which they are at fault) factors heavily into the settlement amount.
- Damages incurred — The severity of damage (both in terms of physical injuries and property damage) is an important aspect of any settlement amount.
- Insurance coverage limits — The level of coverage the at-fault party carries on his or her policy can greatly affect the settlement offers the insurer can submit.
The insurer will consider all the above factors (and others) when formulating an initial settlement offer.
The First Settlement Offer: What to Expect
Once the car accident settlement process has begun, you need to know what to expect when the insurance company makes its first offer. A basic understanding of how insurance providers operate, the tactics used, and what mistakes to avoid will benefit you.
The Role of Insurance Companies in Settlement Offers
Insurance companies act as “middlemen” in the car accident claim settlement process. Part investigators, part negotiators, and part representatives, insurance providers are adept at portraying themselves as helpful to all parties, but in reality, they are looking to serve the best interests of their clients while protecting the company’s bottom line.
Common Tactics with First Offers
Whether you have any experience in dealing with insurance companies in the past or are new to the experience, it is important to be aware of the different tactics used to attempt to convince victims to take the first offer. Some of the more common tactics include:
- Lowball offers — Insurers often expect victims to snap up the first offer and intentionally offer a lower amount.
- Quick settlement pressure — Insurance companies may also pressure victims by urging them to accept an offer while it’s still available, implying a limited time to receive a settlement.
- Release agreements and potential consequences — Insurers sometimes attempt to convince an injured party to sign a release agreement (sometimes known as a liability waiver or other terms) that will legally clear the at-fault party of any liability, preventing the injured party from pursuing further compensation.
Once you know these tactics, they can be easy to detect, making it easier to avoid falling prey to them.
Pros & Cons of Accepting the First Offer
Though jumping at the first settlement offer from an insurance company is never advisable, every offer is still worth consideration. There are advantages and disadvantages to accepting an initial offer.
Advantages
- Quick resolution — Accepting an early offer can move the process along more quickly and get the entire situation behind you.
- Avoiding additional legal costs — As the process drags on, the potential for the matter going to court can increase, leading to a lengthy and more costly ordeal.
Disadvantages
- Underestimating your claim’s value — Accepting a low initial offer can result in being significantly short-changed concerning the true value of your injury claim.
- Long-term financial implications — Failing to take full advantage of your opportunity to receive the most compensation you can get can have a negative impact should you need ongoing medical treatment further down the line.
While accepting an initial offer can bring a swift resolution to your settlement negotiations, this must be weighed against the potential drawbacks of selling yourself short in the short term, potentially creating long-term issues.
Factors to Consider Before Accepting a First Offer
Before accepting an insurance provider’s first offer, there are several things you should take into consideration.
Full Assessment of Damages
A full assessment of the damages (medical and property) can allow you to determine if the insurance provider’s offer is sufficient. Your assessment of damages should include:
- Medical expenses
- Property damage
- Lost income due to being unable to work
Ensuring the initial settlement offer will be sufficient to cover all the above expenses is the priority as you consider the offer.
Long-Term Implications
In addition to a full assessment of your damages, it’s important to take into account any potential long-term financial considerations, including:
- Ongoing medical treatment
- Rehabilitation or physical therapy
- Other future expenses
There are obvious expenses up front following your accident, but these long-term financial obligations can lead to uncertainty regarding an initial settlement offer.
Consulting with a Car Accident Attorney
As with any type of car accident, you must consult an experienced car accident attorney. A skilled attorney can give you the insight and valuable advice you need to make informed decisions and avoid costly mistakes.
Negotiating a Fair Settlement
As mentioned above, immediately accepting the insurance company’s first offer is not in your best interest. Instead, negotiating with the insurer can lead to a more fair and favorable settlement offer. With the guidance of your attorney, you can follow a few basic steps through the negotiation process to put yourself in a position to reach a better resolution.
Steps to Take Before Countering an Offer
Before answering the insurance provider’s offer, it is important to do your due diligence and prepare for negotiations. Your legal representation can:
- Gather and document evidence that supports your claim
- Obtain medical records, police reports, and witness statements
Effective preparation can lay a strong foundation for a persuasive case. The more evidence you can gather, the more difficult it will be for the insurance company to deny your argument that you deserve a more substantial settlement offer.
Effective Negotiation Strategies
Understanding the negotiation process and familiarizing yourself with various strategies will work in your favor as you move through the sometimes frustrating negotiation phase. Some common (but effective) negotiation strategies include:
- Making reasonable counteroffers: Make sure your proposals are sound and aren’t aiming too high. By remaining reasonable, you build a better baseline with the other party.
- Emphasizing the strength of your case: This is where your effort in preparation pays off. Having compelling and comprehensive evidence and documentation to support your argument will put you in a better position to get the outcome you seek.
- Remaining patient and persistent: The negotiation process isn’t always quick and easy. Be prepared for a period of back-and-forth offers and counteroffers. If you remain calm and patient throughout the process, it can lead to a more favorable result.
Adhering to these reliable negotiation methods can improve your chances of receiving a better settlement offer that can provide you with the compensation you need to cover the expenses you have incurred following your car accident more effectively.
Seeking Legal Advice
With so much at stake and riding on the amount of money you can get in your settlement, working with a knowledgeable personal injury attorney is always your best option. Having the experience and insight of a legal professional in your corner starts your claim in the right direction toward full compensation.
The Importance of Working with an Attorney
There are critical decisions to make during the settlement process — particularly when negotiating with insurance companies. These choices can ultimately determine where your settlement ends. Attempting to either navigate this process on your own or with an inexperienced attorney can lead to a failure to make well-informed decisions.
Additionally, always consider the complicated nature of the insurance process. Dealing with insurance providers, negotiating, and facing the possibility of going to trial are not simple or straightforward feats. The complexities of these types of scenarios can often be confusing to individuals who do not have the same level of experience as the parties with whom you are trying to negotiate. With an effective attorney on your side, you can move through the process with confidence that there is a professional looking out for your best interests at every turn.
The Benefits of Legal Representation
While simply having an attorney as your legal representation in a settlement process is helpful, other benefits come along with having an effective advocate, such as:
- Maximizing the value of your settlement — The level of experience your car accident attorney has in these types of cases can be invaluable, leading to increased chances of obtaining a higher settlement amount than if you were to take the first offer or try to negotiate with the insurance company on your own.
- Protecting your rights — As much as everyone might like to think that settlement negotiations with an insurance company will happen in good faith, there are instances when an individual’s rights are not protected, and they become further victimized by unethical tactics. Having an attorney acting as your representative can give you the peace of mind and protection to ensure the other party does not take advantage of you.
- Negotiating on your behalf — Your attorney has experience negotiating with insurers and handling all of the complicated paperwork involved in these types of settlement offers. Your attorney can shoulder the load while you focus on your recovery and advise you on whether to accept settlement offers or not.
Don’t take the burden of dealing with the insurance company and considering settlement offers all on yourself. There is skilled legal assistance available. With the help of your attorney, you can follow the necessary steps to pursue a strong settlement amount that can give you the financial support you need.
Trust an Attorney to Provide the Guidance You Need
After suffering an injury in a car accident that was not your fault, the last thing you need is more stress and aggravation that comes from dealing with the responsible party’s insurance company. Let a trained professional lead the way. Seek the guidance you need by contacting a Fairfax personal injury attorney to handle the car accident settlement process.