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How to Respond to a Low Car Accident Settlement Offer

Posted on June 13, 2022 in

Auto insurance carriers are difficult to deal with, and it is not uncommon for them to send settlement offers significantly below what individuals should receive after a crash occurs. The reality is that many individuals simply agree to whatever settlement offer is extended by the insurance carrier, usually because they need the money or they are worried that they will not be able to recover any higher amount of compensation. Here, we wanted to discuss how you should respond to a settlement offer that is low.

Why Low Settlement Offers Are Made

Insurance carriers really only have one goal in mind – to limit how much money they payout in a settlement. Insurance carriers want to make money, and the more they pay claimants, the less padding they have for their bottom line.

Chances are, any first settlement offer made by an insurance carrier is going to be far below what a claimant should actually receive. This is expected, though insurance carriers could be guilty of bad faith insurance practices if they offer an unreasonably low settlement to an individual. If an insurance carrier operates in bad faith, they are breaking the law, and they could be on the line for paying the original claim as well as additional punitive compensation to an individual.

The vast majority of low settlement offers made by insurance carriers are not considered bad faith. They should, however, be considered the starting point for negotiating a higher settlement.

Negotiating Higher Settlements From Insurance Carriers

It is important to work with a skilled Colorado vehicle accident lawyer who has experience handling these claims. An attorney can investigate every aspect of the situation and gather the evidence needed to prove liability. When an attorney goes armed with this information, they will be ready to counter any low settlement offer made by the insurance carrier. The first step in this process will be crafting a demand letter that details the facts of the case, compiles a list of all of the expenses the victim has experienced, and “demands” a reasonable amount of compensation.

An insurance carrier can respond in various ways to a demand letter. This can include accepting the demand and paying the requested amount, submitting a counter offer for a lower amount than the demand, or denying the claim altogether. Typically, insurance carriers will engage in negotiation with the crash victim and their attorney until a reasonable dollar figure is settled on.

However, in the event the insurance carrier refuses to offer a fair settlement, the crash victim and their attorney may need to file a civil personal injury lawsuit against the at-fault party in order to put the case into the court system and move towards a trial.

Types of Compensation Available

There may be various types of compensation available to car accident victims in Denver. This includes both economic and non-economic damages, such as coverage of all medical bills, last income, property damage expenses, out-of-pocket expenses, physical and emotional pain suffering losses, loss of quality of life damages, and more. The total amount of compensation available to crash victims will vary depending on factors related to a particular claim.