5 things to know before accepting a settlement amount

5 things to know before accepting a settlement amount

Accidents and injuries can be life-altering. When caused by someone else’s negligence or fault, individuals can sue the other party to recover compensation and damages. This is known as a personal injury or accident lawsuit. Since most of these cases are settled out of court, individuals often have questions regarding when to settle. Unfortunately, there is no right answer to this question – it entirely depends on the circumstances and how one would like to proceed.

Things to know before accepting a settlement amount
1. It is possible to reject an offer but still receive compensation
Often, insurance companies rush victims to accept a settlement offer, giving them the impression that they will receive nothing in return if they reject it. Do not fall for this, as it is not true.

Any experienced attorney will attest to the fact that a settlement offer is only the beginning of the process. Insurance companies push it as a now-or-never offer because they want to spend the least time and money on personal injury claims. However, going with this quick settlement often lies in the insurance company’s best interest and could lead to major losses for the victim.

Upon receiving a settlement offer, victims can make a counteroffer or reject the claim. If the company refuses to negotiate, an individual can also take this issue to court. Since these lawsuits are expensive for insurance companies, they are more likely to offer a fair settlement offering to settle the matter.

2. Any settlement agreement is final and binding
Every settlement agreement includes a release of liability. This means that the other party is no longer liable to pay any more money outside the settlement agreement, and the victim can no longer take them to court for a personal injury lawsuit.

This holds true even if the injuries are worse than imagined or if complications arise. That is why one must not be in a rush to accept a quick settlement offer. Insurance companies know that many individuals are not aware of these facets and try to use this to their advantage. Know that if one has accepted a settlement offer, it is final, legal, and binding.

3. Understand the total cost of injuries
In many cases, it is difficult to understand the full extent of the injuries until years later. This could be because of a myriad of reasons, such as wounds not healing as expected, the rise of complications, or even secondary infections. Instead of rushing to accept a settlement based on current expenses, victims must take some time to understand the full impact of the accident on their lives, including current and future employment opportunities, mobility, activity levels, and overall quality of life.

These things become clear when one reaches the Maximum Medical Improvement (MMI) stage. It is always a good idea to wait until this point before finalizing a settlement, as it will give one the best understanding of one’s overall healing, pain, and the impact of the injuries on the rest of their life.

4. Accident costs run deeper than mere out-of-pocket expenses
Insurance settlement offers usually cover immediate out-of-pocket expenses such as repairs and medical expenses. However, this is not indicative of the true cost of the accident. Any fair settlement offer should include all current and future expenses and damages such as vehicle repairs, cost of alternate transportation, replacement service for all household tasks performed by the victim (including taking care of themselves, cooking, cleaning, etc.), medical expenses, future treatments and therapies, lost income, future losses due to reduced earning capacity, mental health treatment for trauma, emotional distress, loss of enjoyment, property damage, pain, suffering, and loss of consortium.

5. Don’t feel rushed to settle
Lastly, some insurance companies may try to rush the settlement process by implying that the victim has been given the best possible offer. However, all they are trying to do here is protect the company’s vested interests. The victim (or their representative) alone can decide when to settle the claim. Some things that may help make this decision easier include:

Know the deadline for filing a claim
The first thing one needs to know is the deadline for filing a claim. This is called the statute of limitations and differs from state to state. Typically, victims have between one and six years from the day of the accident to file a claim. Missing this statute of limitations means that the victim loses any right to claim compensation for their injuries.

To protect their own interests, insurance companies do not generally talk about it. It is best to discuss these details with a personal injury lawyer or attorney to receive the right advice.

Check whether one is ready to settle
If the statute of limitations is still running, it is best to postpone negotiations until one hits MMI. However, if a victim would like to hurry the settlement process, they must consider the course of their current and future treatment, any lost income during the process, and whether their health insurance has any subrogation rights that allow them to recover the cost of the medical bills.

Set settlement goals
Lastly, one must work with a settlement goal in mind. Ask for a specific, appropriate amount, and put this information in the claim letter.