If there’s one thing you need to remember when you get a settlement offer from an insurance company after you’ve suffered injuries in an accident, it’s this: insurance companies are in business to make a profit. This doesn’t necessarily mean that they’re out to take advantage of you when you’re already hurt, but it definitely means that, in most cases, they will offer you the lowest possible compensation amount. So, what happens when it’s so low that it’s not just unfair, it’s borderline insulting? Here are several answers regarding how accident settlements work, including what is realistic, what is unacceptable—and how to respond to an unfair settlement.
An average settlement is hard to determine because it depends on the specifics of your case. Generally, you are entitled to “economic” damages, meaning those on which a dollar amount can easily be placed – for instance, medical bills, lost income, and property damages. You may also claim “non-economic” damages. They are those things that are harder to quantify, such as emotional distress. In cases where the injury was caused by the at-fault’s egregious negligence or recklessness, punitive damages may also be assessed—for instance, where a drunk driver caused severe injuries.
A settlement is basically an agreement between you and the insurance company: they will pay you a certain amount to compensate for your losses in a car accident. The amount is determined by the insurance (or claims) adjuster, whose job it is to come up with a “fair” settlement by investigating the issue, assessing damage, speaking to you, and any witnesses and compiling information relevant to your case.
You can tally up your current costs and losses that resulted from your injury at the hands of a negligent or reckless driver, which is exactly what the insurance adjuster will do. But if you have suffered mental anguish beyond the quantifiable losses, how does that factor into the equation? Typically, the adjuster uses a calculation called a multiplier to figure compensation for “pain and suffering.” This can range anywhere from 1.5 to 5 times your medical costs, not counting the loss of income. It seldom includes the cost of any potential future medical needs. That’s why it’s important to work with an attorney who knows how to assess the full value of your claim and will negotiate with the insurance company to make sure you get the highest possible compensation.
If you have received a lowball offer from an insurance company, you (or your attorney) should speak to the adjuster to find out how the amount was determined. It may be that some important information was missed, in which case, you can provide the necessary documentation. Also remember that the initial settlement offer is usually a starting place for a negotiated settlement that takes into account all credible damages and potential issues down the road, as well as those non-economic losses. While it is ultimately your decision, your attorney can help by pointing out the pros and cons of accepting or rejecting any counteroffer the insurance company makes.
In order to resolve a personal injury claim, your lawyer will draft a demand letter. The letter includes all the facts and is written in a way that takes away any potential for the insurance company to point the finger of blame back on you. (This is important as Texas is a comparative negligence state, meaning that if you, as the plaintiff, contributed in any way to the car accident, your settlement compensation will be reduced by the percentage of any fault on your part.) The asking amount is what you would like to receive, but it cannot be so far out of line with what is likely to be offered as a settlement amount as to be immediately rejected by the insurance company.
We have helped clients throughout Galveston County, and surrounding areas get the best possible settlement when they have been injured in a car accident. To discuss your case with one of our experienced League City car accident attorneys, please call us at (281) 645-5000 or contact us online to schedule a free consultation.