How to Respond to a Low Settlement Offer

Dealing with insurance company antics is one of the most challenging parts of a personal injury claim. Insurance companies work hard to minimize the amount of money they pay on accident and injury claims. Every step of the process of your claim serves to increase or decrease the value of your case. Insurers start from the moment they learn of your claim to deny or devalue your personal injury case. If you succeed in proving a negligent driver is liable for your accident injuries and damages, you then face the challenges of negotiating your claim. The insurer may give you a lowball settlement offer, engage in bad faith tactics, or simply continue to deny paying anything on your claim. Learn how to appropriately respond to a low settlement offer for your injury claim for the best odds of success for your personal injury case.

If you sustained injuries in an accident in Colorado, contact the personal injury lawyers at Front Range Injury Attorneys today to schedule your free consultation. Our experienced legal team are knowledgeable and zealous advocates for our clients and their cases. We treat our clients as people, not case files. Learn more about how we can help you pursue compensation for your injuries and damages. Contact our Denver law firm to learn more.

One major mistake many people, even some attorneys, make when negotiating a personal injury settlement is to allow the insurance adjuster to maintain control of the process. By controlling the process the adjuster sets the terms for negotiation, manipulates you by frustrating you and forces you to work on their timetable. Adjusters are not evil geniuses who carefully plot out how to take advantage of you in settlement negotiations; however, most are experienced at working injury claims and work within the parameters of their employers who are definitely in the business of taking advantage of claimants. There are simple steps you can take to try to balance the negotiation so you can make fair decisions for yourself and your case.

Remain polite when talking to the adjuster

Stay polite, professional and calm when speaking to an adjuster over the phone or by email, no matter how frustrated you might be with their behavior or bad settlement offers. Venting negative emotions to the adjuster is more likely to hurt your negotiation position than help. Expressing anger and frustration lets the adjuster know they are in control. They are more likely to continue doing whatever bad faith tactics or irritating behaviors have set you off in hopes you will give up and accept a lowball offer. You may also anger or frustrate the adjuster which usually makes them dig in on a bad position or worse, become harder to reach because they don’t want to deal with you. You may say something out of frustration that could seriously hurt your case, especially if it is in writing or on a recorded call.

By remaining calm and professional you can still express disagreement and show the adjuster that you are making decisions out of facts and reason. The adjuster may not treat you fairly or professionally but you will protect yourself from unintentionally weakening your place at the bargaining table. If you know you cannot maintain a professional composure with the adjuster, consider hiring a personal injury attorney before you begin negotiating your claim.

Ask questions about any settlement offer

It is fair for you to ask the adjuster to explain the basis for any settlement offer, especially a low offer. If the adjuster cannot explain the low settlement offer, it is probably because there is not a strong factual basis. Most likely the adjuster is lowballing your claim because you do not have an attorney and they do not fear any alternative but settlement on their terms.

Ask the adjuster to break down the basis for an offer so you can understand the offer and what facts or legal issues are in dispute that might improve a future offer. By gathering this information you can focus future discussions on the disputed issues and advance negotiations more efficiently. Asking questions may also help you present a better claim. The adjuster may not have all of your medical records, lost wage documentation, or other helpful evidence of your claim. Answers to your inquiries may expose the missing pieces which you can fill in and ask the adjuster to consider in a new offer.

Present facts and evidence of your economic and non-economic damages

Adjusters will only consider evidence and facts in their possession when insurance companies calculate settlement offers. The more you can document facts of fault for the accident and your damages the stronger your claim and the clearer the value. For example, medical records are better evidence of your injuries than your personal written explanation. Evidence of your lost wages is stronger and clearer evidence than telling the adjuster an amount without proof. Economic damages like medical bills and lost wages almost always require documentation. Non-economic damages, like pain and suffering, are harder to document with objective records but you can present photos, videos and written statements to give the adjuster something tangible to consider.

Respond in writing to any offer

Similarly, written evidence of negotiation efforts can help if you need to file an insurance complaint with the state insurance regulator or a bad faith insurance lawsuit. Adjusters often prefer phone calls because they can write a summary of the phone call into the claim file based upon whatever they choose to include. Any email or letter received must be included in the claim file. Failure to include correspondence in the file may help prove a complaint or bad faith lawsuit. If you talk to the adjuster by phone about an offer or demand, you should follow up with an email to the adjuster or insurance company outlining the discussion and any settlement terms discussed. Keeping written correspondence will also help you organize your thoughts and the timeline of events in your claim.

Avoid falling for common insurance company settlement tactics

Most insurance adjusters at large auto insurance companies handle hundreds of claims files at any given time. They may have 300+ claims assigned at any given time. Adjusters are highly experienced at claims procedures, especially those that close claims with as little work as possible. By negotiating claims aggressively with simple tricks, they close many claims for pennies on the dollar. You are not obligated to accept any settlement offer or to accept an offer right away on a phone call. You have the right to have any legally valid claim heard by a jury and have the jury determine the value of your claim if you choose not to settle your case.

Bad faith tactics

Insurance companies often engage in bad faith tactics like delaying responding to your claim or a demand to settle, denying benefits under an insurance policy without a valid explanation, or offering unreasonably low settlement offers. In Colorado another party’s insurance company does not owe you a duty of negotiation in good faith so they will use these tactics to frustrate you into giving up and accepting a low offer. Sometimes a delay in response is due to an overworked or uncaring adjuster; however, sometimes delayed responses are intentional tactics to frustrate you.

If you experience these tactics by your own insurance company for a medpay claim or uninsured/underinsured motorist claim, you may have a separate bad faith claim to pursue against your insurance company. Under Colorado law, your insurer has a duty of good faith towards you as an insured. If this occurs, you should talk to a personal injury attorney about a potential bad faith insurance lawsuit.

Settlement authority

Insurance adjusters can only settle an injury claim within the settlement authority given by their employer. Some adjusters have automatic authority up to a low amount (such as $5,000) and they can independently evaluate a claim for settlement value. If the claim is evaluated above their authority, they must get additional authority from a supervisor. Other insurance companies require adjusters to gain authority for each claim based upon its evaluation. The adjuster must return to management to obtain higher authority if necessary. It is difficult for adjusters to obtain additional authority if there is not new evidence to change the evaluation or some other important detail that entices them to rethink your claim.

Adjusters often negotiate to the point that they say they are at their highest authority or top offer on your claim. Sometimes that is true but the adjuster can seek additional authority. Whether the adjuster will ask for more or can get more depends on the reason and whether the adjuster wants to try to get you more money. (That is a good reason to remain polite with the adjuster.) Sometimes it is not true. Adjusters sometimes claim to be at their top offer although they are not but they think they can settle the claim for less.

Whether an adjuster is at the top of their authority does not automatically determine the fair value of your case. Unless the top offer is the policy limits available, the insurance company could pay more money on the claim. Whether you choose to accept the adjuster’s highest offer or file a personal injury lawsuit involves many strategic and financial considerations.

Settling quickly without fair consideration of your claim

At most insurance companies claims are treated differently whether you hired an attorney to represent you. Some insurance companies even have separate adjusters who exclusively handle claims for people without attorneys. If the insurance company knows you are on your own, they will work quickly and aggressively to defeat your claim. They will attempt to settle your claim as early as they can for as little as they can.

There are two important reasons why they do this. First, if you accept a settlement offer before you complete treatment, you are stuck with the agreement even if you end up needing a lot more treatment, miss more time at work, or accrue other damages. So they can pay a lot less on your case. Second, they want to settle your case before you decide to hire an attorney. That way the adjuster remains in control of negotiating your claim. They know one of the first things your attorney will do is evaluate your claim and determine if it is an appropriate time to try to negotiate. Insurance industry research admits they pay on average more than three times as much to people who hire attorneys.

Contact a personal injury attorney

You deserve to understand your legal rights and the fair value of your case before deciding to settle your claim. Contact Front Range Injury Attorneys to talk to a lawyer about your rights and help you get the compensation you deserve. Our experienced personal injury lawyers have worked thousands of accident claims and helped clients recover maximum compensation for their injuries.