If you suffered property damage in a car accident in the past, the claim process might have proceeded relatively smoothly. You took your vehicle to a service center or had it towed there, and the mechanics at the center reviewed the damage to your vehicle. The service center might even have directly submitted the repair cost to the liable driver’s insurance company.
On the other hand, an injury claim can prove much more complicated and leave you with many more questions. In such cases, it’s important to seek the help of a car accident lawyer who can guide you through the legal process, help you understand your rights and options, and work to ensure you receive fair compensation for your injuries.
Should I Take the First Offer of a Car Accident Settlement?
How An Insurance Company Arrives at an Initial Injury Settlement
Insurance companies use different methods to arrive at initial injury settlements. Many companies now automate settlement offers. They may look at your injuries and an initial glance at your medical bills or the damage to your vehicle. Then, based on that information, the system will calculate that offer.
Often, the system will automatically calculate just a percentage of the damages you sustained or the bills you will have to pay. It may fail to include compensation for the suffering you may have dealt with because of the injuries that went along with your accident.
Many accident victims accept that initial settlement offer because they do not know they have other options. They may assume that the insurance company has their best interests at heart or that the insurance agent will let them know every area where they can claim compensation after an accident.
However, the insurance agent often has little power to negotiate directly with an accident victim. As a result, it may prove difficult to get the compensation you deserve by dealing directly with the insurance company.
Why Shouldn’t You Accept an Initial Settlement From the Insurance Company?
If a settlement offer crops up soon after your initial accident, you may, at first, consider it a good thing. You may have medical bills already rolling in: the cost of treatment in the emergency room, for example, or bills from any procedures you may have had to help with your initial recovery. Even the cost of ambulance transport after an accident can set you back hundreds or thousands of dollars. Getting a quick offer from the insurance company may seem like a great way to start covering the cost of those expenses.
However, accepting an early settlement offer from the insurance company may do more harm than good.
You May Not Know, Immediately After the Accident, What Your Recovery and Long-term Expenses Will Look Like
Many injuries can lead to recoveries that vary substantially between one injured party and another. Some people will have a relatively straightforward recovery. Others will have complications and setbacks along the way.
Suppose, for example, that you suffered a traumatic brain injury in an accident. Some people with a moderate TBI may recover within a few weeks. Others may have lingering symptoms. Even mild TBI can lead to symptoms that last more than a year after the initial accident. In the meantime, you may have expenses that continue to mount.
Likewise, imagine that your car accident injuries included a spinal cord injury. It can take as many as six months after the initial accident for doctors to have a reasonable idea of your eventual recovery. You may recover mobility during that time, or you may find that you do not recover any mobility at all. However, it can prove difficult to predict that in the early days.
You may not know what medical equipment you will need to get around or what procedures to aid your recovery. Soon after the accident, you may not know how much time you will need in physical or occupational therapy or whether you will need in-home care to help you get around after you return home. If you do not know what those expenses will look like, the insurance company cannot know what they will look like either.
The First Offer Likely Will Not Include All The Areas in Which You Deserve Compensation
An early settlement offer from the insurance company may look good on the surface, especially if you compare it to your medical costs alone. However, in many cases, accident victims will have significantly more expenses related to the accident. You may, for example, have considerable lost wages related to your car accident, which can add to the compensation you may need to claim.
In addition, many initial car accident settlement offers will not include compensation for your pain and suffering. As the victim of devastating injuries, you likely deserve compensation for those losses: not just the physical pain associated with serious injuries but the emotional anguish you went through during your recovery.
That initial offer, however, may leave out compensation for pain and suffering altogether. Working with a lawyer gives you a better idea of what compensation you deserve in those areas, allowing you to include them as part of your claim.
If You Accept an Initial Offer, You Cannot Go Back and Ask for More Later
Once you sign the settlement agreement with the insurance company, you will enter into a binding contract that prevents you from going back and asking for further compensation for injuries related to that specific accident.
That means that even if you suffer immense complications during your recovery, you cannot ask for additional financial compensation from the insurance company. Furthermore, if you discover later that you might have deserved more compensation than your settlement offer included, you still cannot ask the insurance company for compensation in those areas.
By having a lawyer look over your claim, on the other hand, you can get a better idea of how much compensation you really deserve, which can help you get a fair settlement offer that will better cover your expenses.
That Initial Offer Likely Will Not Cover Your Long-term Expenses
When you have severe injuries from a car accident, you need to consider your long-term needs, not just your immediate ones. Often, an injury claim will need to include compensation for the long-term challenges you may face as you recover from your injuries. Not only do you have to consider your medical costs, but you may also have to consider the cost of the services you cannot perform for yourself while recovering from your injuries, from the cost of maintaining your yard to cleaning your home.
You may also have to think about future limitations. For example, some people may lose the ability to work at their former jobs after an accident. You may have the right to ask the insurance company for compensation for that lost earning potential. With those funds, you might go back to school or get an additional certification that could allow you to pursue gainful employment more easily. However, if you do not ensure that your settlement offer includes those key elements, you may end up without those much-needed funds.
What Should I Do if I Get an Early Car Accident Settlement Offer?
Ideally, you should get in touch with a personal injury lawyer as soon after your accident as possible. In many cases, that will mean working with a lawyer before the initial settlement offer comes in. However, if you have not yet contacted a lawyer, or if the insurance company tries to contact you directly about a settlement, you may need to take steps to protect yourself and your right to compensation.
Do Not Accept Any Offer Immediately
Sometimes, an insurance agent may put a lot of pressure on you to quickly accept a settlement offer. You may even hear that the insurance company will take the settlement off the table if you do not accept it and that you have only that limited time to decide how you want to proceed. However, the insurance company will need to provide you with a fair settlement offer based on the losses you have faced and the insurance policy’s limits. You do not have to accept any offer quickly.
Have a Lawyer Review the Settlement Offer
Before accepting a settlement offer, have an experienced car accident lawyer review the settlement to get a better idea of how it looks compared to the compensation you deserve. In some cases, your lawyer may recommend that you accept that offer.
In other cases, however, a lawyer may look at the offer and realize that it represents only a fraction of the damages you deserve. A lawyer can help you make vital decisions about how to proceed with your claim, including how you can best navigate the claim process.
Negotiate
You always have the right to negotiate with the insurance company. By having a lawyer negotiate on your behalf, you can often increase the compensation you can recover from the insurance company after a car accident.
Prepare to wait for the negotiation process. It can take time to negotiate a fair settlement agreement. Insurance companies often use victims’ urgency to get the compensation they deserve against them. If you rush, you may accept less compensation than you deserve for your accident and injuries. By settling in and acknowledging that the claim process will take time, on the other hand, you can often end up with the compensation you really deserve.
What Should a Fair Car Accident Settlement Include?
A fair car accident settlement will include compensation for the many losses you experienced as a direct result of your car accident. In general, you should expect compensation for financial and non-financial losses related to the accident. An injury claim will often progress separately from the damage claim related to the damage to your vehicle.
Talk to a lawyer about the specific elements your claim should include.
A car accident claim will generally include compensation for the most obvious damages you sustained.
- Your medical costs. Medical costs can rise substantially after a car accident, especially if you suffer injuries that will have long-term implications. You may want to consider the cost of likely future medical procedures and the procedures you have already needed to recover.
- Your income losses. Take a look at the time you have had to miss at work and what it has cost you during your recovery. Your lawyer may also help you calculate the value of the lost PTO used to help cover some of that time off.
- Your suffering. A fair car accident claim will include compensation for the non-financial losses you sustained because of the accident.
A lawyer can more carefully review the many expenses that went along with your car accident and the compensation you should expect for those losses. Talk to a personal injury attorney before accepting any settlement offer after an accident since an attorney can give you a better idea of what a fair offer will look like.
Jason Hutzler
Jason Hutzler is the founding partner of Phoenix personal injury law firm Hutzler Law, and represents individuals throughout Arizona. His practice is primarily dedicated to personal injury and car accident claims, leveraging his deep expertise as a former insurance adjustor to navigate the complexities of insurance negotiations.