In this article, you can learn:
- When an attorney might recommend that you accept an initial settlement.
- Two important reasons it may be better for you to decline an immediate settlement offer.
- How insurance companies use early settlement offers to their advantage.
Should I Accept An Initial Settlement Offer From The Insurance Company?
Our law firm does not recommend that you ever accept a settlement without first consulting an attorney. It is important to note that having a discussion with a lawyer does not automatically mean that you have an attorney-client relationship. Nor does it mean the attorney will take a fee from your settlement. The rules in Indiana are pretty clear that an attorney-client relationship where a fee is based on a percentage from a contingent outcome (i.e. an award of money), that fee agreement must be in writing. Attorneys who practice injury law understand this. Some attorneys only want to talk to you if your case is big enough to make it worth their time if you hire them in exchange for a percentage of the final damages award. This is entirely understandable, as most injury firms are very busy and spend a lot of time screening cases to determine which ones are likely to benefit the client and the attorney alike. If your case isn’t very big, there may be some firms willing to talk to you about your claim in the form of an initial consultation. In some cases, it may make sense for both you and the attorney to enter into something other than a typical contingency fee arrangement where the attorney’s role is limited to advising.
After reviewing the settlement and learning about your case, sometimes we do recommend taking the an early offer. (Note that the initial offer is almost never the highest amount they are willing to pay, but in really small cases, it may be – or at least really close). If the case is straightforward, the settlement seems fair, and it is clear that only minor injuries have been sustained, we often advise clients to accept the settlement offer. In this situation, we do not usually suggest hiring an attorney since it would be a minor claim, and paying our firm for representation pursuant to a contingency fee would only further decrease your already low net settlement. Paying us a limited consultation fee may well be worth it in those cases.
Why Should I Wait To Accept A Settlement Offer?
There are two main reasons that it might be better to decline an initial settlement offer. We recommend you speak with an attorney before accepting a quick settlement because:
- Insurance companies often intentionally make lowball offers. Insurance companies are for-profit institutions that seek to increase their profits by paying out as little as possible, and it is rare that their first settlement offer is the best they can provide.
- If the first settlement proposal arrives quickly, it will probably be too early in your treatment and recovery to understand the depth of the injuries and full extent of medical treatment that may be required. You probably will not have answers about whether your injuries are long-lasting, and what the limitations will be on your life. This information has a tremendous impact on the value of a case. When this data is not yet available because the facts have not developed enough, it is premature to consider accepting a settlement from the insurance company.
Some insurance companies use their quick response as a tactic to pay less settlement money. They show up with a checkbook a few days after an accident, hoping you will accept a low offer that will release their insured from any further liability. If you accept a settlement offer, sign a release, and then speak with an attorney, it will be too late to recover the full extent of the damages. At that point, you have already released the other side form any further liability, and there is nothing you can do about it.
Dealing with insurance companies can be confusing, especially when they are intentionally working against you. It helps to have someone on your side who understands the strategies insurance companies may use to try to manipulate you. We recommend always speaking with a personal injury lawyer and having them review your case before you consider accepting any offers.
With the guidance of a skilled attorney for Personal Injury Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy. For more information on Personal Injury Law in Indiana, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (812) 359-8007 today.