Sally Morin Personal Injury Lawyers
Sally Morin Personal Injury Lawyers
Sally Morin Personal Injury Lawyers

​Will an Insurance Company Offer a Settlement?

It's almost always in the best interest of the insurance company to settle out of court.

If you've been injured in an accident due to a driver's negligence, you may be wondering whether their insurance company will offer you a monetary settlement to compensate you for your injuries and damages.


Insurance companies' primary function is to pay claims on behalf of policyholders. Unless the adjuster has reason to think that the policyholder does not bear sufficient responsibility for the accident to create financial liability, you can almost always expect a settlement offer after filing a claim with an insurer, in order for them to avoid the expense of going to court and the risk of having to pay a larger award.


As a claimant you likewise benefit from negotiating and ultimately accepting a settlement by avoiding court expenses and eliminating the risk of losing in court and receiving no compensation at all.


Before pursuing an insurance claim for compensation, it's good to understand just how insurance companies work, how they value settlement offers, and what you and your attorney can do to maximize your compensation and protect your rights.

Jeven U.

Motorcycle Accident Client

I was involved in a motorcycle accident last October which resulted in personal injury and property damage. I was sure I had a solid case against the insurance company and could resolve it myself, but was recommended by people close to me to seek a personal injury attorney. I found Sally Morin Personal Injury Lawyers here on Yelp and was connected with Rebecca Taylor.


Rebecca even went as far as negotiating my medical bill expenses, even after the personal injury claim with the insurance company was resolved. The caliber of professionalism and excellence they both demonstrated far exceeded my expectations, and I would recommend Sally Morin Personal Injury Lawyers to anyone.

Experience a serious traffic accident?

Visit our How it Works Page to learn more about how the personal injury process works.

How an Insurance Company Determines the Value of a Settlement Offer

An initial insurance company settlement offer is only a starting point toward successfully securing the compensation you deserve. The next question is how close the offer is to being fair compensation for your expenses and damages.


Let's take a look at how an insurance company actually arrives at the value of an insurance settlement they may offer you.

Step 1) Collect Statements from the Insured

While the insurance company is liable to compensate victims of their policyholder's negligence, they are a business motivated to minimize your award if possible, to maximize their profits. The premiums the  policyholder may have paid to the insurer for years represents their income stream, and any settlement or court judgment they pay out nullifies that income.


So an insurer can be expected to try to uncover evidence and statements about the accident that may jeopardize your claim.

Step 2) Investigate the Victim

Insurance company investigators will try to look into your personal history, find out if you've filed insurance claims in the past, and even sometimes direct questions to your friends, relatives, and employers. That's why personal injury attorneys often recommend that victims never deal directly with the adjusters assigned to the case by an at-fault party's insurance company, beyond delivering succinct factual data about the accident. So keep in mind that any information you volunteer could be used against you to try to lower your final settlement amount.

Step 3) Request Documented Proof of Injury/Loss

Proving need is squarely on the shoulders of the victim or their attorney in a personal injury case. An insurance company will require clear evidence of expenses and damages before agreeing to a settlement. This may take the form of medical documentation, statements from employers, financial records, etc.


There is also some information that they may request from you even though they are not necessarily entitled to it, but can use it if you voluntarily provide it - one reason the "discovery" process, as this step is called, is best overseen by your lawyer to protect your rights.

Step 4) Determine Settlement Value

The insurance adjuster will enter whatever information they are able to gather into their actuarial claims software, which uses formulas that include numerous factors including the type of injury, circumstances of the accident and non-injury expenses such as property damage, to generate a settlement offer.

The First Settlement Offered Is Almost Always a "Low-Ball"

Because insurance companies are in business to make money, they act to protect themselves financially, which means they try to pay as little as possible. So the initial settlement offer you receive is likely to be much lower than your demanded amount, and may not be close to covering all of your expenses and damages from the accident.


First offers are often much less than the predicted total value of your case. This gives insurance companies "wiggle room" in case you or your personal injury attorney decides to enter into negotiations rather than accept the first settlement.

How to Know if Your Insurance Settlement Offer is Too Low

The best way to understand the value of the insurance company's offer is for you and your attorney to accurately value the claim, which can be a complex undertaking when all types of compensation are considered, including the monetary value of personal losses associated with your accident.


Indeed, victims of accidents can often seek much more than simple compensation for hospital bills. The are often entitled to compensation for:

  • Long-term health care.
  • Damage to or loss of personal property (such as an automobile.)
  • Mental anguish associated with an accident ("pain and suffering".)
  • Wages lost due to days away from work or decreased productivity.
  • The financial impact on family members (especially dependents.)

These are strategies you and your lawyer can use to accurately value and successfully pursue your claim:

  • Add up all of your medical bills—not just the hospital fees. This includes any prescriptions, non-hospital expenses (such as physical therapy) regular doctor's follow-ups, and even travel expenses associated with these visits.
  • Are you left with any long-term effects? If so, don't forget to estimate the cost of those as well. For example, have your injuries left you less productive at work? Factor in that decrease and the resultant financial impact on your paycheck.
  • Know how your state views negligence. Do you live in a no-fault state? If so, you may have to seek a settlement from your own insurance. Do you live in a comparative negligence state? If so, the amount you are entitled to may be diminished by the percentage of liability assigned to you.

If the at-fault party's insurance company won't offer you what your losses are worth, and you don't want to pursue a lawsuit, you can also seek assistance from your own insurance company, so you should be aware of your policy limits.


Calculating an accurate dollar figure to assign to your insurance claim can be overwhelming, but you have to have at least an idea of what your losses are worth in order to ensure the insurance settlement you're offered is enough to mitigate the financial impact of your accident.

Can You Reject an Insurance Settlement Offer?

If the initial settlement figure the insurance company offers isn't enough to cover your expenses and damages, you can reject the offer and negotiate with the insurance company for a larger settlement, or file a lawsuit. Starting a negotiation is more complicated than simply accepting the first offer, but you will likely be able to demand a more adequate settlement.

What Happens if You Turn Down an Insurance Settlement Offer?

Negotiating for More Money

If you feel that the first offer was inadequate, it becomes your responsibility to negotiate for more. In order to do this, you'll need to demonstrate your need through strong evidence, which can include:

  • Police reports and eye witness accounts.
  • Doctor's diagnoses and prognoses.
  • Medical records.
  • Financial statements (including documentation from your employer.)
  • Repair estimates.

During this process, it's up to you and your personal injury attorney to demonstrate to the insurer that you have a strong claim to a larger settlement than you've been offered, and that the insurance company risks a larger loss if the case goes to trial.


If you can do that, the insurer will likely make another (larger) settlement offer.


The negotiation process may continue for some time with multiple offers and counteroffers. Be aware that the insurance company will not pay more than the coverage limits of the policy.

Taking Your Personal Injury Case to Court

If the negotiation ends without a successful resolution, or if the insurance company fails to offer an adjusted settlement at all, you and your lawyer may decide to take your case to court. Keep in mind that if your case does go to court, there is no guarantee that you'll win anything. It can also take months or longer for your case to proceed through the legal system, during which you will still have to survive on the funds available to you. An experienced injury attorney may be able to help you delay or finance your medical expenses during a trial.


Although you can take your case to court without the assistance of a lawyer, it is not recommended. Injured parties with legal representation win more often and typically receive higher awards.

5 Strategies for Negotiating with an Insurance Company

Negotiating with an insurance company can be stressful and challenging. These 5 strategies will help you and your attorney successfully negotiate with an insurance company to get the settlement you deserve.

1) Understand the Role of the Insurance Company

Insurance companies exists to pay claims on behalf of policyholders, but in settlement negotiations they do not work for the interests of claimants or the policyholder - their one goal is to minimize settlement amounts.


It's the adjuster's job to investigate the accident, investigate your claim, and calculate the smallest settlement offer that they think they can get away with paying you. It's up to you and your lawyer to prove your expenses and damages.

2)  Collect Your Own Evidence

You'll need a lot of hard evidence to prove that your claim is really worth what you think it should be. You can't rely completely on other parties (like the police) to collect all the evidence you need. That's why you should always collect as much of your own evidence as possible, including:

  • Police reports.
  • Eyewitness statements.
  • Photographic evidence from the accident scene.
  • Documented accident-related expenses.
  • Documented medical treatment and evaluations.
  • Documentation of the financial impact of the accident on your life (repair costs, lost wages, future impact on earnings.)

3)  Calculate All of Your Expenses

The financial losses associated with your accident may challenging to calculate in full. It's essential to take into account all of the tangible and intangible expenses associated with your accident, including hospital bills, travel expenses associated with medical treatment, associated time off from work and long term loss of earnings & decreased earning potential from your injuries.


4)  Craft a Compelling Demand Letter

The demand letter is probably the most important document your attorney will create in your claims process. This letter will contain a summary of the accident as well as detailed descriptions of all the evidence, documentation, and records to prove your case. Crafting a compelling demand letter is the quickest way to bypass that initial "low-ball" settlement offer and get something closer to the compensation you really need.

5)  Get Legal Help When You Need It

Although it is possible to secure an insurance settlement by yourself, it's important to understand that if you're seriously injured, hiring an experienced and caring personal injury lawyer is in your best interest.


Your case may be more complicated than it looks, or you may be entitled to substantially higher compensation than the insurer is willing to offer an inexperienced injured individual. Even if you're unsure, it's worth your time to have a free consultation with a qualified attorney.