Settlement Offer Too Low: What Usually Happens Next
You are never required to accept a first settlement offer. If the amount does not cover your documented losses, you can counter, negotiate, or explore legal action.
Informational purposes only. This article is for general informational purposes only and is not legal advice. Laws vary by jurisdiction. If you need advice about your specific situation, consider speaking with a licensed attorney.
## Short Answer
If an insurance company's settlement offer is too low, you can reject it and make a counteroffer. If negotiations fail, filing a lawsuit may be the next step. You are never required to accept any settlement offer.
Why First Offers Are Often Low
Insurance companies routinely make low initial offers for several reasons: injured parties may not know the full value of their claim, some people accept the first offer without negotiating, and every dollar saved is profit for the insurer.
Step 1: Evaluate the Offer Against Your Actual Damages
Before responding, calculate your actual documented losses: all current and anticipated future medical bills, lost wages including future earning capacity if applicable, and non-economic damages like pain and suffering. Compare this to the offer.
Step 2: Make a Written Counteroffer
Respond in writing with a specific counteroffer and supporting documentation. Explain why the offer is inadequate by referencing specific medical bills, projected future costs, or other documented losses. Keep the tone professional and factual.
Step 3: Continue Negotiating
Negotiation typically involves several rounds of offers and counteroffers. The adjuster may increase their offer after receiving your documentation. This process can take weeks or months.
Step 4: Consult or Hire an Attorney
If the insurer will not negotiate reasonably or continues to dispute liability, consulting a personal injury attorney changes the dynamic significantly. Insurers generally make higher offers when an attorney is involved, because they anticipate litigation costs.
Step 5: File a Lawsuit If Necessary
If negotiations fail and your claim is within the statute of limitations, your attorney may file a lawsuit. Most cases settle before trial, but filing a lawsuit often prompts more serious settlement negotiations.
What Not to Do
Do not accept an offer while your medical treatment is ongoing — you may have unknown future costs. Do not cash a settlement check that says "payment in full" unless you are satisfied with the amount, as this may release all further claims.
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*This article is for general informational purposes only and is not legal advice. Consult a licensed attorney for advice specific to your situation.*
Informational purposes only. This article is for general informational purposes only and is not legal advice. Laws vary by jurisdiction. If you need advice about your specific situation, consider speaking with a licensed attorney.