Rejecting an insurance settlement offer is a significant decision that can impact the outcome of your personal injury claim. When an insurance company offers a settlement, they are trying to resolve the case quickly, often for less than what you may be entitled to. If you refuse the offer, several things can happen, including further negotiations, mediation, arbitration, or even litigation.
Why You Might Reject an Insurance Settlement Offer
Many people reject settlement offers because they feel the amount is too low. Insurance companies often make initial offers that do not fully cover medical bills, lost wages, pain and suffering, or future expenses related to the injury. Some other common reasons for rejecting an offer include:
- Disputes Over Fault: If the insurance company tries to shift blame onto you, they may reduce their offer significantly.
- Underestimation of Medical Costs: Many settlement offers fail to consider long-term medical expenses, physical therapy, or future treatments.
- Lack of Compensation for Pain and Suffering: Insurance companies may exclude non-economic damages in their calculations.
- Pressure to Settle Quickly: Insurers often pressure victims into accepting a low settlement before they fully understand the extent of their injuries.
What Happens Next?
Continued Negotiations
Rejecting the first offer does not mean the process is over. It often opens the door for further discussions. You or your lawyer can present counter-evidence, such as medical reports, repair estimates, and proof of lost income, to justify a higher settlement. Many cases are resolved through multiple rounds of negotiations.
Submitting a Counteroffer
A counteroffer is your opportunity to propose a more appropriate settlement amount. When making a counteroffer, consider:
- The total cost of medical treatments, including future care
- The extent of lost wages and reduced earning capacity
- The severity of your injuries and long-term impact
- Pain and suffering, emotional distress, and reduced quality of life
Insurance companies may respond with another counteroffer, leading to further back-and-forth discussions.
Mediation or Arbitration
If negotiations stall, you may enter mediation or arbitration. These are alternative dispute resolution methods that avoid going to trial.
- Mediation: A neutral third party (mediator) helps both sides reach an agreement. The mediator does not make a final decision but guides discussions toward a resolution.
- Arbitration: A neutral arbitrator reviews the evidence and makes a legally binding decision. Unlike mediation, arbitration results in a final ruling that both parties must accept.
These options can save time and legal expenses while still providing an opportunity for fair compensation.
Involvement of a New Adjuster
Sometimes, rejecting an offer leads to the assignment of a new insurance adjuster. This can work in your favor if the new adjuster has a different perspective and is willing to offer a higher settlement. However, it can also be challenging if the new adjuster is more aggressive in disputing your claim.
Filing a Lawsuit
If negotiations, mediation, and arbitration fail, you may need to take legal action. Filing a lawsuit means your case will go to court, where a judge or jury will decide the outcome. While litigation can take time, it can also lead to a more favorable settlement if your case is strong.
Taking legal action also signals to the insurance company that you are serious about pursuing fair compensation. This may encourage them to offer a better settlement before the case goes to trial.
How to Reject an Insurance Settlement Offer the Right Way
If you decide to decline a settlement, do so carefully. Here are some steps to follow:
- Review the Offer Thoroughly: Understand what the insurance company is offering and why it may be insufficient.
- Consult an Attorney: A personal injury lawyer can help you determine whether rejecting the offer is in your best interest.
- Draft a Formal Rejection Letter: Clearly state your reasons for declining the offer and provide supporting evidence.
- Submit a Counteroffer: Present a reasonable amount that reflects your actual damages.
- Prepare for Further Negotiations: Be ready for additional discussions, mediation, or a potential lawsuit.
- Document Everything: Keep records of all correspondence and settlement discussions in case you need them later.
Need Help With Your Claim?
Rejecting an insurance settlement offer is a strategic decision that can lead to better compensation. If the initial offer does not cover your expenses, lost wages, and pain and suffering, it is often worth pushing for a fairer settlement. At Friedman Injury Law, we fight for injury victims to ensure they receive the compensation they deserve. If you need help with your claim, call us at (702) 970-4222 for a free consultation.
