The consensus is never to accept the first compensation offer, irrespective of whether you’ve been involved in a car accident, a work-related accident, or other personal injury accidents. The injury lawyers at NPS Law office in Syracuse NY note that the first offer from insurance companies is often a feeler and often does not account for long-term accident or injury consequences.
So, what should you do? Find out everything you need to know about insurance company offers and how to determine when you’ve been presented with the right offer.
What You Should Know About the First Compensation Offer from Insurance Companies
Many personal injury accident victims often wonder why they are advised never to accept the first compensation offer presented by an insurance company. The answer is simple. Insurance companies are businesses that assess risks to determine whether they can profit from them.
An insurance company will not readily present you with a compensation offer if they aren’t sure they are liable to compensate you for your damages. So, why should you trust that they are offering the full worth of your damages on the first try?
In most cases, insurance companies use the first compensation offer as lowball bait. They often bait the accident victim into accepting the offer so they can write off other huge expenses associated with their injuries.
For example, an insurance company may immediately offer you $10,000 after a ghastly motor accident has hospitalized you. Accepting the amount means you’ve forfeited your rights to demand further compensation for your damages. You may later find that your medical costs amount to over $25,000, excluding other costs like lost income and earning potential, property damage, pain and suffering, etc.
In the scenario above, the accident victim had shortchanged themselves by accepting a lowball offer without fully assessing their losses. This could also be you if you accepted the first compensation offer.
An ideal way to approach such a situation is to understand that the insurance company will not offer you a deal if they don’t think your case is worth much more. With that in mind, you can calmly reject the initial compensation offer while thoroughly assessing your losses and the full worth of your injuries.
To recap, the most important facts about the first settlement offer from an insurance company are;
- It is most likely a lowball offer that doesn’t reflect the true worth of your damages.
- The offer will come very early in your case to rob you of a chance to critically assess your losses and demand the full worth of it.
- Your first compensation offer is almost certainly not the last offer you’ll get.
What Happens If You Reject a Settlement Offer?
Most accident victims have heard many horror stories about insurance companies not paying victims what they deserve in compensation. These stories may have created panic and may push them to consider taking the first compensation offer.
The truth is you can reject a compensation offer without consequences. In fact, the insurance adjuster will almost certainly contact you again with a revised offer or an invitation to negotiate your demands.
In some cases, the insurance adjuster may try to play mind games by presenting an even lower offer on the second try. This is mostly to get you to request the first offer. However, you must see beyond the mind games to get what you deserve.
What to Do After Rejecting the First Offer
Rejecting the first compensation offer means you know what you deserve. However, you should know that most insurance companies will not give in easily. An excellent way to level the playing field is to contact an experienced and reputable personal injury lawyer to discuss your case.
Most personal injury lawyers offer free initial consultation services, so you don’t have to worry about spending out-of-pocket costs to get legal advice. Once you’ve hired an attorney, your attorney will carefully analyze your case and the losses you’ve suffered.
The attorney will calculate your losses in monetary terms and send a demand letter to the insurance company. At this point, the insurance company can invite you to the negotiation table, where you can now negotiate your settlement based on the amount demanded by your lawyer.
Keep in mind that the amount demanded by your lawyer will be a lot higher than the initial offer, especially because your lawyer would have done their due diligence to compute all losses, including lost income, loss of earning potential, medical bills, property damages, as well as pain and suffering endured due to the accident.
You may reach a fair settlement based on the newly demanded amount, or your lawyer may advise taking the case to court.
