When you’ve been injured in an accident, getting a settlement offer from the insurance company can feel like a turning point, but what if the offer is unfair or far too low? Rejecting that first offer is more common than you might think, and it’s often the first real step toward securing the compensation you truly deserve. But what happens next? Knowing your rights, your options, and what to expect after saying "no" can make all the difference in the outcome of your case. And this is where our experienced personal injury attorneys come in.
Understanding Insurance Settlement Offers An insurance settlement offer represents the insurance company's proposal to resolve your personal injury claim without going to court. Insurance companies aim to minimize their financial liability, which often means their initial settlement offer may not reflect the full extent of your damages. In fact, New York City paid over $730 million in personal injury settlements in 2023 alone, highlighting how frequently these cases are resolved through negotiations rather than trials.
Insurance adjusters may intentionally present lowball offers, assuming many injured people, especially those without legal representation, will accept out of urgency or lack of knowledge. While the average payout can exceed $130,000, the median is much lower — just $15,000, reflecting how many claimants settle for less than their case may actually be worth.
The insurance adjuster assigned to your case will evaluate your medical bills, lost wages, and other expenses to determine what they consider an appropriate settlement amount. However, it's important to remember that the insurance company's first offer is rarely its final offer.
Tip: Never* accept a settlement before you’ve reached Maximum Medical Improvement (MMI) — the point at which your condition has stabilized and further recovery is unlikely. This ensures your compensation reflects the true cost of your injury. *There can be exceptions to this, for example, where there is very limited insurance coverage and the insurance company is willing to pay the full amount of the policy.
What Happens When You Reject an Insurance Settlement Offer Rejecting an initial insurance settlement offer is often just the first step in the negotiation process. It signals to the insurance company that you believe their offer is insufficient and that you are prepared to advocate for a fairer outcome.
Continued Settlement Negotiations When you reject an insurance settlement offer, the claims process doesn't end. Instead, it typically leads to further negotiations between you (or your personal injury lawyer) and the insurance company. The insurance adjuster may come back with a revised offer, or you may need to present additional evidence to support your demand for higher compensation.
During this negotiation process, your experienced personal injury attorney will work to demonstrate why the initial settlement offers were inadequate. This might involve:
Providing additional medical records that show the full extent of your injuries. Documenting ongoing medical expenses and future medical treatments you'll need. Calculating lost wages and potential future income losses. Gathering evidence to support claims for non-economic damages like pain and suffering. Extended Timeline One immediate consequence of rejecting a settlement offer is that your case will take longer to resolve. While accepting the initial offer might have closed your claim quickly, choosing to continue negotiating means the settlement negotiations could extend for weeks or months. However, this extended timeline often results in securing fair compensation that better reflects your actual damages.
Potential for Higher Compensation Many claimants who reject initial settlement offers ultimately receive significantly more compensation than what was originally proposed. Insurance companies often make conservative initial offers, expecting negotiations. When you reject an insurance settlement and present strong evidence supporting your claim, you create opportunities to reach a mutually acceptable agreement that better serves your interests.
Risk of No Settlement While rejecting a settlement offer can lead to better compensation, there's also a risk that negotiations may stall or fail entirely. If the insurance company refuses to make reasonable offers and negotiations fail, you may need to consider filing a personal injury lawsuit to pursue maximum compensation through the court system.
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When Insurance Companies Refuse to Negotiate Unfortunately, some insurance companies may become uncooperative after you reject their initial settlement offer. When this happens, you need to understand your legal options and how to proceed strategically.
Sometimes, after you reject an insurance settlement offer, the insurance company may become less cooperative or refuse to engage in meaningful negotiations. When this happens, you have several legal options available:
Filing a Personal Injury Lawsuit If settlement negotiations reach an impasse, filing a personal injury lawsuit may be necessary. A lawsuit demonstrates to the insurance company that you're serious about pursuing fair compensation and willing to take your case to court. Many cases that proceed to litigation still settle before trial, often for amounts higher than the original insurance settlement offer.
Alternative Dispute Resolution Methods Before proceeding to trial, you might consider alternative dispute resolution methods such as:
Mediation: A neutral third party helps facilitate discussions between you and the insurance company to reach a mutually acceptable agreement.Arbitration: A neutral arbitrator hears both sides and makes a binding decision about your compensation.These methods can be more cost-effective and faster than a full trial while still providing opportunities to secure fair compensation.
Financial Considerations When Rejecting Settlement Offers Before rejecting any settlement offer, you need to carefully weigh the financial implications of continuing negotiations or pursuing litigation. Several important factors can impact your decision.
Legal Fees and Costs Most experienced personal injury attorneys work on a contingency fee basis, meaning you don't pay legal fees unless you recover compensation. However, rejecting a settlement offer and pursuing litigation may involve additional costs such as:
Court filing fees Deposition costs Medical expert witness fees Investigative expenses Your personal injury lawyer should discuss these potential costs with you when evaluating whether to reject a settlement offer.
Time Value of Money While rejecting a settlement offer might lead to higher compensation, you should also consider the time value of receiving money now versus later. If you're struggling with financial losses due to lost wages and mounting medical expenses, the immediate relief of accepting a settlement might outweigh the potential for higher future compensation.
Insurance Coverage Limits In some cases, the insurance company's settlement offer might represent the maximum amount available under the defendant's insurance coverage. If this is the case, rejecting the offer and pursuing litigation might not result in additional compensation, even if you win at trial.
Strategies for Successful Negotiations Developing effective negotiation strategies is crucial when you've decided to reject an initial settlement offer. The right approach can significantly improve your chances of securing fair compensation.
Documenting Your Damages To successfully reject an insurance settlement offer and negotiate for better compensation, you need comprehensive documentation of your damages:
All medical records related to your injuries Bills for medical expenses, including ongoing medical expenses Documentation of lost wages and reduced earning capacity Evidence of pain and suffering Proof of other financial losses Presenting a Formal Demand Letter After rejecting an initial settlement offer, your attorney might prepare a formal demand letter that outlines:
The full extent of your injuries and their impact on your life All economic damages, including medical costs and lost income Non-economic damages such as pain and suffering Why the insurance company's offer is inadequate A specific demand for fair settlement Being Prepared to Walk Away One of the most powerful negotiation tactics is being prepared to walk away from inadequate offers. When insurance companies understand you're willing to take your case to trial, they're often more motivated to make reasonable settlement offers.
Common Mistakes to Avoid At Tomkiel & Tomkiel , we've seen many personal injury claimants make costly mistakes when dealing with settlement offers. Understanding these common pitfalls can help you make better decisions about your case.
Rejecting All Offers Without Careful Consideration While you have the right to reject settlement offers, each decision should involve careful consideration of the offer's adequacy, your financial situation, and the strength of your case. Automatically rejecting all offers without proper evaluation isn't strategic.
Failing to Understand Policy Limits Before rejecting a settlement offer, understand the available insurance coverage. If the offer represents the policy limits, rejecting it might not lead to higher compensation unless there are additional sources of recovery.
Waiting Too Long to Make Decisions While you shouldn't rush into accepting inadequate offers, waiting too long to respond to settlement offers or make decisions about litigation can work against you. Witnesses' memories fade, evidence can be lost, and statutes of limitations approach.
Protect Your Rights with Tomkiel & Tomkiel Rejecting an insurance settlement offer is a significant decision that can impact your financial recovery and case timeline. While it involves risks, it can also lead to securing fair compensation that truly reflects your damages.
If you're facing a decision about whether to accept or reject an insurance settlement offer, contact us for a free consultation to discuss your case and ensure any settlement agreement truly serves your interests.
