If you were injured in an accident and have received an offer from an insurance company, it’s normal to wonder what your options are if the offer isn’t sufficient to cover your damages. Insurance providers often give low settlement offers to save money and avoid paying for the true value of your claim. Having legal representation is the best way to avoid accepting an insufficient settlement offer, but knowing what happens if you decline an offer can help you prepare for the next steps.

You have the option to reject an insurance settlement offer that is too low, but does that mean you lose your chance to receive compensation for your damages? No, declining a lowball offer does not mean you cannot recover financial damages, but the next stages of the process are full of obstacles that can be challenging to navigate alone.

The New York City accident attorneys at Mark E. Seitelman Law Offices are here to help. We have been successfully representing clients in settlement negotiations with insurance companies for over 30 years.

Top Reasons for Turning Down an Insurance Settlement Offer

It’s a good idea to know what your claim is worth before accepting or declining a settlement offer. Factors like medical expenses, future medical needs, your ability to work, emotional distress, and numerous other damages must be considered to give you a full picture of the value of your claim. If the insurance company’s offer seems too low, it may be a good idea to decline it, but your attorney can provide personalized guidance during this step to ensure your interests are protected.

It’s incredibly common for injured claimants to turn down an insurer’s offer because the amount would not be sufficient to cover their losses. Why do insurance companies often start with low settlement offers? Insurance companies are for-profit businesses that prioritize making and saving money. Paying out substantial sums in accident settlements goes against their mission of increasing and protecting profits. When faced with a legitimate claim for damages, insurance companies will often provide low settlement offers in the hopes of avoiding larger payouts.

Some of the other common reasons that injured accident victims turn down settlement offers include:

  • They have not reached maximum medical improvement
  • They do not know the full extent of their losses
  • The offer only includes economic losses and leaves out non-economic losses

Rejecting an insurer’s initial offer can often show them that you are serious and serve as the first step toward fair negotiations. You and your attorney may decide to make a counteroffer to the insurance company that more closely represents the value of your losses. If the insurer declines your counteroffer, your attorney may respond with a demand letter, which includes details about your losses and a request for compensation.

Most accident cases settle before making it to court, so the chances are high that a fair settlement can be reached. However, if the insurance company refuses to agree to a reasonable amount, litigation may also be an option.

Common Mistakes to Avoid When Dealing with a Low Settlement Offer

If you accept the insurer’s low settlement offer, you may lose the opportunity to negotiate for a higher amount and to litigate your case in court. In many cases, you will be asked to sign a release form that states you give up your right to pursue additional compensation. Before agreeing to a low settlement offer or signing any forms given to you by the insurance company, speak with an experienced New York accident attorney to ensure your interests are protected.

Settling for less than your claim is worth is a common mistake people make, and this is understandable. When you are suffering from increasing medical expenses, lost wages, property damage, and growing stress levels, you likely want to reach a resolution sooner rather than later. However, agreeing to a lowball offer is rarely the solution that injured accident victims hope it will be.

Negotiating without legal representation is another common mistake people make. Insurance companies are not on your side when you file an accident claim, and you are unlikely to receive fair treatment that prioritizes your physical, emotional, and financial recovery. If you are unfamiliar with the negotiation and settlement processes and New York law surrounding accident claims, you may be taken advantage of and miss out on the money you are entitled to. The insurer has a team of attorneys fighting for them, and you deserve to have someone in your corner, as well.

Steps to Take If You Decide to Reject an Insurance Settlement Offer

You are not legally obligated to accept an offer just because the insurance company makes one, especially if it is insufficient to cover your losses. If you decide that declining the offer is the best option, consider taking the following steps:

  • Review your policy – Your insurance policy will include numerous terms and conditions that deal with accidents, what your obligations and rights are, and what the insurer is required to do. Being familiar with these will help you navigate the settlement process.
  • Ask the insurer to clarify – You can ask for clarification from the insurance adjuster regarding the details of their settlement offer. Having a breakdown of the damages included in the offer can help you determine how they calculated the value of your claim and see what they left out.
  • Collect evidence to support your claim – While you likely already gathered some evidence prior to filing your claim with the insurance company, having additional proof of the impact of the accident on your life will help strengthen your negotiation. Medical records, camera footage, police reports, and witness statements can be valuable evidence in your settlement proceedings.

Effective Ways to Respond to a Low Settlement Offer

If you want to decline a low settlement offer, you may choose to negotiate for a higher amount, proceed to mediation or arbitration with the insurance company, or file a lawsuit. The best first step after receiving a low settlement offer in New York is to hire a personal injury attorney if you don’t already have legal representation.

An accident lawyer will protect your interests and advocate for a fair settlement amount that represents the losses you’ve suffered. At Mark E. Seitelman Law Offices, we will fight tirelessly to ensure that you have the best possible chance of receiving maximum compensation for your injuries and damages. Contact us today to schedule a free consultation.