How to Write a Response to a Settlement Offer that is Too Low

When you’re involved in an accident or other incident that results in your injury, and another party is at fault, the chances that you’ll be offered a settlement to compensate for your injuries or damaged property are high.

However, it’s not always as cut and dried as it seems. The amount of the settlement will often be decided by an insurance claims adjuster and they may offer you less money than you deserve — sometimes, not even enough to cover your hospital expenses, let alone therapy costs or lost wages. What are your options if this happens to you?

In this piece, we’ll explain how to write a response to a settlement offer that is too low.

Understanding a Settlement Offer

First, what exactly is settlement offer? When you’re the victim of an accident, or incident that directly leads to injury or the loss of property, you’re owed compensation for the damage caused by another party.

settlement offer is someone’s — the person responsible, their attorney, or the adjuster for an insurance company — proposal for the dollar amount that you’ll accept to consider the matter closed.

Sometimes a settlement offer will come as a result of an insurance provider needing to close a claim. In this case, an adjuster will start the negotiation with an offer that is intended to cover the costs you accrued during and in the aftermath of a loss that occurred.

In other cases, the process will start with you or your attorney writing a demand letter that lists out all the factors that contribute to your claim and a range of damages that need to be reflected in the settlement offer.

Responding to a Too-Low Settlement Offer

In the common case that your settlement offer comes from insurance adjuster, it’s likely that the amount will be lower than you feel you deserve. This is normal. Insurance companies use these tactics for a few reasons:

  1. They want to try and see if you’ll accept a low offer because you don’t understand the value of your claim.
  2. If they start the negotiations low, negotiations may not drive the final amount up to where it could or should be.

This is why you shouldn’t be surprised by a low initial settlement offer and it shouldn’t make you doubt your demands.

When you write your response, remember to be as professional as possible. Address it directly to the person(s) responsible for the settlement offer. Here are some tips to make sure your response clearly and accurately provides evidence for why you feel the offer was too low:

  • Make Your Points in Order
    A settlement offer, whether it’s a written letter or a phone conversation, will usually start with the dollar amount being offered before providing reason for the estimate. Your response should follow the same structure.

    First, make your refusal of the settlement amount clear. Reference the method of delivery — for example, “in your letter, you offered X dollars to settle my claim” — as well as the claim number or details specific to your claim.

    Then, you can move on to respond to each point of reasoning used to justify the offer, explaining why you think each reason is insufficient. Then, clearly restate your demands in the conclusion of your response.
  • Show Evidence Where Necessary
    At the point where an insurance adjuster would send you a settlement offer, they’ve already reviewed the evidence supplied to support your claim. With that in mind, you should reference specific pieces of evidence (hospital records, for example), plus any new evidence that you feel further supports your argument.

    This will not only support the points you’re making in your response, it shows the opposing party that you understand the factors at play in your case.
  • Understand the Nature of a Negotiation
    It’s important to understand that a negotiation is a two-sided event. You shouldn’t expect to receive a fair offer at the beginning — and you also shouldn’t feel like you should change your view of what you’re owed based on a low ball offer.

    Especially if the value of your claim is high, you may have to go through the process of receiving an offer and submitting a counteroffer multiple times before you feel satisfied with the outcome.
  • Avoid Common Insurance Tactics
    It’s also critical to remember that insurance adjusters are experienced at using tactics to cut down the amount of a settlement. Things like trying to confuse you with legal jargon or trying to get you to agree with a reclassification of your injuries are losses are all ways that experienced negotiators try to whittle down the value of their claim to save them money when it’s all said and done.

    Go into the negotiation with as much information as possible, and if you can, have someone experienced in handling a situation like yours review both the settlement offer and your response for opportunities to strengthen it.

How a Lawyer Can Help with Your Response to Settlement Offer That Is Too Low

There are many parts of the settlement negotiation process that can be confusing. That’s where an attorney can provide some much-needed assistance. A personal injury lawyer understands the tactics of opposing counsel and insurance companies when they try to get out of a fair settlement. They can use this experience to advise you in the settlement negotiation and help you avoid common pitfalls.

Our lawyers can provide the guidance needed to get fair compensation after an injury or loss. Request a free consultation and find out more.