Following an automobile accident, the insurance company representing the at-fault party would most likely make you a settlement offer. This offer might be much lower than the amount of compensation your car accident attorney has told you to expect. Keep reading to learn goes into a settlement offer and then contact The Law Offices of Larry H. Parker at 800-333-0000 if you require a free legal consultation.
The reason for low offers
Because in a vehicle accident injury lawsuit, there is no one method for determining damages. Instead, insurance firms use their own proprietary algorithms for assessing losses, which are designed to pay out as little money as possible in any given situation. Because insurance firms do not reveal their formulae, it is impossible to know why they choose a specific amount to give. However, by analyzing the following elements, we may gain a fair sense of their cognitive process.
Damages that are taken into account
After an automobile accident, you may be entitled to a number of various sorts of compensation, including:
- Medical expenses
- Lost wages
- Lost earning potential
- Damage to property
- Suffering and pain
All of these sorts of damages will be taken into account by the insurance company when making a settlement offer. They may, however, have a different notion than you about how much it should cost to fix your automobile or how much you should be compensated for pain and suffering. Many first compensation offers, in fact, do not account for pain and suffering.
Setting the reserve
Your insurance company will try to estimate the amount they will have to pay out on your claim as soon as you report an accident to them. The reserve is the name given to this estimate. The insurance company benefits from setting the reserve early in the case because it allows them to value the case before you know how much your entire medical treatment will cost, whether you will be left with chronic pain or other lingering symptoms, and how much pain and suffering you will experience.
Once the reserve has been established, convincing the insurance carrier to consider further damages that might raise the reserve is extremely difficult.
An insurance company will not pay out more than the policy limit, no matter how expensive your medical costs are or how much compensation you receive. So, if your losses total $100,000 but the at-fault party’s policy only covers $50,000, your settlement offer will be capped at $50,000.
What should you do if your settlement offer is insufficient?
If you feel a settlement offer is too low, you should contact an experienced car accident lawyer like The Law Offices of Larry H. Parker as soon as possible. We can work with the insurance carrier to persuade them to make a more reasonable and appropriate offer to cover your present and future damages. We can bring a lawsuit against them if discussions fail. If your damages exceed the policy limitations, we can investigate the potential of suing the at-fault party for further damages directly.