After a personal injury—whether it's the result of a motor vehicle accident, a slip and fall, or any other incident—the injured party may receive a settlement offer. The at-fault party's insurance company typically makes this offer, and its purpose is to compensate victims for their injuries and other damages.
The real challenge lies in determining whether the offer is a good one. A good settlement offer should adequately cover all your current and future expenses relating to the injury, well beyond your immediate medical bills. This can be complex to ascertain, however. A skilled car accident lawyer can provide a valuable perspective on the path to making an informed decision.
What Contributes to a Settlement Offer?
According to Black's Law Dictionary, around 95 percent of all personal injury claims resolve through an out-of-court settlement. Understanding what factors contribute to a settlement offer can often feel like trying to solve a puzzle with many pieces.
It's more than just the immediate financial cost of your medical care. Other elements are significant in shaping the offer, including those that may not be apparent at first glance. All these intricacies can make it challenging to determine what a fair settlement should look like.
Past and Future Medical Expenses
Medical costs arising from a personal injury often include hospital bills, doctor's fees, and costs of medicines and rehabilitation. However, consider the potential for ongoing and future medical expenses, including the need for long-term care or rehabilitation, follow-up medical visits, or future surgical procedures or treatments.
The Effects of Your Injury on Your Quality of Life
Non-economic damages involve compensation for the psychological impacts you incurred as a result of the incident. These commonly include pain and suffering, emotional trauma, loss of enjoyment of life, and the inconvenience of frequent medical appointments.
Unlike the economic portion of your claim, which combines your accident-related expenses and income loss, when your attorney establishes a value for non-economic damages, they don't benefit from receipts, bills, or pay stubs. They must consider other factors relating to your claim instead.
Available Insurance Coverage
It often comes as a surprise to claimants that one of the most significant factors in their claim's value is the availability of insurance. The insurance company, Allstate, explains that insurance policies come with coverage limits, which people commonly refer to as policy limits, and which are the maximum amount that the policy has available for claims.
If your case has too high a value, it will exceed the policy limit. While you can seek the additional amount from the at-fault party directly, this is often very difficult, as most people cannot afford to pay accident expenses out-of-pocket. Your lawyer will consider the potential of other liable parties or insurance policies you have that can cover a portion of the costs to fully compensate your claim.
Beyond insurance coverage, your attorney will also consider the severity of your injuries and any permanent injuries resulting in future expenses, as well as the frequency of your medical appointments, length of treatment, and amount of pain you experienced during your recovery.
One common misstep in evaluating settlement offers is to overlook the importance of future costs relating to the injury. These can be significant, and your attorney will not underestimate them. The consequences of an injury can extend far into the future, requiring ongoing care, support, and adjustments. Any settlement should take these into account. All these issues will help them assign a fair value to the case.
How the Insurance Claims Adjuster Considers the Claim
Once your lawyer has established a value for your claim, they will submit it to the insurance provider who services the relevant policy. The insurance provider will assign a claims adjuster to evaluate the claim. The insurer, Progressive, explains that a claims adjuster is an employee of an insurance company whose job is to investigate claims and determine if the insurer should pay.
This evaluation can include reviewing the evidence and documentation, and interviewing the involved parties.
The claims adjuster wants to answer three main questions:
- Does the relevant insurance policy provide coverage for the harm the claimant suffered?
- Was the insured liable for causing the accident in which the claimant suffered harm?
- How much compensation should the claimant receive as a result of the insured's liability?
While this seems like a fairly straightforward evaluation, it is important to understand that insurance companies hire claims adjusters to protect their bottom line by paying as little as possible for a claim.
To do this, adjusters commonly use tactics such as getting the claimant to agree to a low settlement, pressuring them to accept a settlement quickly without the benefit of legal counsel, and attempting to shift the blame for the accident onto the claimant instead of the insured.
An experienced personal injury lawyer will advocate for your right to the most compensation available for your claim and will negotiate with the claims adjuster to garner a good settlement offer on your behalf.
A Lawyer Plays an Important Part of the Settlement Process
A personal injury lawyer engages with the at-fault party's insurance company with a strong understanding of your case and your needs. They aim to ensure you receive a fair settlement, factoring in all the variables—medical bills, pain and suffering, future costs, and more.
They serve as your advocate throughout the negotiation process, handling communications, rebuttals, and offering adjustments. Meanwhile, your competent personal injury attorney and the insurance company know that if a good settlement offer does not arise, you still have the opportunity to seek the compensation you need through litigation.