Things to know before accepting an insurance settlement
Most insurance companies send low initial settlement offers. Before accepting an insurance settlement, make sure it accounts for all your injuries and losses.
Doing due diligence is particularly important if you’ve suffered a major personal injury. These injuries often involve expenses that go far beyond the immediate hospital visit. As a result, many settlements are worth millions of dollars.
Why Are Initial Settlement Offers Usually Low?
Insurance companies tend to try to settle their claims as quickly as possible. There are several key reasons why this is the case:
- They’re protecting their bottom line
- They use the first offer as a weak negotiation baseline
- They want to avoid paying for long-term care
Some offers may appear reasonable, but the company will still try to pressure you into accepting them right away. Your best bet is to consult a reputable attorney, such as Eric Ramos Law, PLLC, to manage insurance negotiation for you.
What to Ask Before Accepting a Settlement?
Before accepting a settlement offer, you should have a full picture of your legal rights. Start by asking yourself the following five questions:
1. Does This Offer Cover All My Current Losses?
First, you’ll want to ensure the settlement accounts for all your current damages. This includes medical expenses and any other financial losses caused by the accident. Go through your bills carefully before accepting a settlement.
Make note of any out-of-pocket expenses arising from the accident. For example, you may have new prescription costs you forgot about.
2. Does the Settlement Account for Lost Earning Capacity?
When filing an accident claim, people often focus on the wages they’ve already lost. However, many injuries impact your ability to work in the future. Some common earning capacity losses include:
- Inability to perform specific tasks
- Reduction in working hours due to chronic pain
- Loss of career advancement opportunities
3. Have I Reached Maximum Medical Improvement?
Some people accept settlement offers while they’re still undergoing treatment. A smarter thing to do is to ask your doctor if you’ve reached maximum medical improvement (MMI). This means your condition isn’t expected to get worse.
Keep in mind that many injuries, like mobility limitations, take weeks or months to heal. If you settle before that point, it’s hard to account for future costs.
4. Am I Compensated for Pain and Suffering?
Emotional distress is harder to prove than physical pain, but they both affect your quality of life. Ask yourself if your insurance company has compensated you for the emotional effects of your injuries. These include:
- Fear and trauma
- Stress and anxiety
- Sleep loss
5. Have I Identified All Responsible Parties?
In a personal injury claim, there can be more than one liable party. For instance, a truck accident may involve both the driver and their company. Premises liability claims often include several property owners or businesses.
If you haven’t looked into all potentially responsible parties, you’re unlikely to know the full value of your claim. Before settling, do your research.
Fight For a Better Insurance Settlement!
Getting an insurance settlement offer after an accident can be a relief. More often than not, however, this offer won’t account for all your losses. If you accept it, you usually won’t be able to come back and ask for more money later.
Keep reading our legal-related content for more tips on protecting your rights!
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