If you have recently been involved in an accident, one of the first calls you’ll receive is from the insurance company. They will most likely give you a settlement offer in an effort to close your claim as quickly as possible and with as little payout as possible. They will also save bundles of money by keeping your claim out of court and minimizing attorney fees by getting you to settle fast.
Do you have to take the settlement offer that is given to you right off the bat? How do you know if the settlement offer that they give you is fair or if you should be demanding more? If you don’t know much about how insurance companies work especially in the case of accidents, you will be at a considerable disadvantage. So let’s talk more about insurance settlement offers and why it would be in your best interest to hire legal representation sooner than later.
Insurance Settlement Offers Explained
You will receive a settlement offer soon after your accident because the insurance company is hoping that you are desperate. Knowing the medical bills are adding up, the amount of work you miss resulting in lost income, and more puts you on a time crunch. They’re hoping that you will take their lowball offer and move on. But should you?
How Does the Insurance Company Know What to Offer?
Depending on the type of claim you make, insurance companies have all kinds of formulas and computer computations that are made to predict how much your claim is worth. These amounts that are calculated are based on averages from others that have been in similar situations. For example, insurance companies consider things like the average cost of medical bills, the average time it takes someone to recover from specific injuries, etc.
It’s important to know that accident details are not individualized at all when a settlement offer is made. For example, a 90-year-old elderly person can be treated like a 20-year-old when comparing recovery time from an accident. As you know, 20-year-old would bounce back much quicker than a 90-year-old from an accident. This is just one example that is not considered when a settlement offer is made.
Do Your Own Calculations
When you receive an insurance settlement offer, an explanation of reimbursement costs will be included. As you read through these explanations, you may think at first that the insurance company really did its homework, and maybe you should just accept it. In reality, they have no idea how much you have spent on medical bills, damages to your vehicle or other property, and the pain and suffering you are experiencing.
Besides that, the offer usually comes in far too soon for them (or you) to know the extent of damages and costs. In many ways, this is why they offer it so early. They hope that you will simply accept the offer and close the door to any help on future costs that will come up. However, once you accept that settlement check and sign the release, you give up any additional compensation, even if more charges are incurred down the road.
Most people don’t truly understand what their claim is worth and how insurance companies handle such claims. It is rarely a good idea to simply accept the first settlement offer you receive. Take some time to do a rough estimate of the costs that you have incurred so far, as well as what you believe you will still have to pay in the future because of the accident.
After you have made calculations on costs that you know you have already incurred as well as a rough estimate of the future, an experienced attorney can step in and add their expertise. They will advise you on possible future expenses, costs you may have missed, and expenses you may not have known could be included and help calculate pain and suffering. Once these calculations are made with the help of an attorney, you can compare your settlement offer to what should be given to you. The difference may be staggering, and you will quickly see why an initial settlement offer is not something you should settle for at all.
What Happens After an Initial Settlement Offer?
After a first settlement offer is made and you have determined that you are not going to accept it, a counteroffer and demand letter should be sent. Don’t be afraid of not accepting the insurance company’s initial offer. This doesn’t mean that negotiations are over. Really, it means that they are just beginning.
A demand letter is most often written by your attorney, and it outlines your side of the story. Details like how the accident occurred, who was at fault, costs you’ve incurred in the form of medical treatment and other losses, and the projection of future medical costs will be included. Your attorney will also show ways that your injuries have impacted your life on a day-to-day basis. Among all this information, a dollar amount will be included, stating an amount you are willing to accept to settle the case.
It’s obvious why you want legal help writing your demand letter and determining an amount that you’re willing to accept. In fact, your whole claim and the amount you can recover depends on it. Suppose a demand letter does not come from an attorney. In that case, it is often viewed as a claim lacking legal representation, experience, and knowledge, and the amount you may be offered could suffer as a result.
Get Help Now
Don’t put your financial future at risk by accepting the first settlement offer you receive. The insurance company you’re dealing with will feel professionalism when they’re negotiating with a knowledgeable attorney team. Instead of being in negotiations with the victim that doesn’t know much about the legal system, you will probably be surprised how quickly a reasonable and fair settlement offer is made. Call Wormington & Bollinger today for more information on how we can help you receive the compensation you deserve for your family’s future.