What happens when you reject an insurance settlement offer?

What happens when you reject an insurance settlement offer?

Tarun Sridharan Legal Editor & Attorney Contributor Read Time: 6 minutes

What happens when you reject an insurance settlement offer?

When you reject an insurance settlement offer, what happens? That’s a real question on top-of-mind for a lot of injury plaintiffs, as they might be receiving lowball offers that have them concerned about what to do next. Well, not to worry — there are strategic options in the event that you’ve received a lowball offer that you’d rather reject than accept.

Let’s take a closer look at what happens when you reject an insurance settlement offer, and the context behind settlements in general. Read on to learn more!

Why do lawyers prefer to settle?

It’s not just lawyers that prefer to settle a case — the vast majority of clients prefer to settle disputes too. Why? Broadly speaking, trial litigation is expensive, demanding, exhausting, public, and uncertain. That’s a lot to deal with!

See, a business could go to trial and they’d find that all their dirty laundry gets aired out in public. It can be reported on, hurting their brand substantially. Further, they might lose their case, even if they thought that they stood a good chance of winning — there’s no guarantees in litigation.

That’s where settlement comes in. Rather than risk the uncertainty, cost, time, and publicity of trial, parties will go back-and-forth until they determine a fair and reasonable compromise compensation amount. This compensation has to account for the possibilities if the parties were to continue to trial.

By agreeing to a set compensation amount, the parties get to avoid all the hassle and uncertainty of trial litigation. That’s a positive outcome for most parties — which is why more than 95 percent of disputes are resolved through settlement!

Of course, if you don’t feel that you’re getting a fair offer, you’re entitled to reject an insurance settlement offer. So don’t fret!

What is a good settlement figure?

What constitutes an acceptable, “good” settlement will vary wildly from case-to-case. If you have a weak legal claim, for example, then the settlement offers may be substantially less robust. By contrast, if the defendant concedes liability (i.e., they admit fault), then the settlement offers are almost certainly going to be higher.

Depending on the offer, you may decide to reject an insurance settlement offer.

Settlement offers are not an exact science. That being said, they tend to track with 1) likelihood of liability at trial and 2) likelihood of compensation demand being met at trial. In other words, the stronger that your legal claim is, and the more supportive evidence you have regarding your damages claim, the higher the settlement offers are going to be.

Of course, other factors can disrupt this basic dynamic. For example, if the defendant is especially hostile, they might keep lowballing you even if you have a very strong legal argument backing your claim. That’s why it’s important to be amicable and professional throughout the process

What usually happens after settlement negotiations are unsuccessful?

In a litigation scenario, if settlement negotiations are unsuccessful, then the next step is for the case to continue to progress through various court hearings and processes, until finally there will be a trial — during this trial, the dispute will be resolved through formal argument. If you “win” your case, the court will award you damages based on the presented evidence. This will be the recovered compensation amount.

While this seems like a simple process, it’s worth noting that trial litigation is generally not desirable. Outside of very specific situations, it’s typically a better overall outcome to resolve the dispute through a settlement compromise. Trial litigation can be expensive, demanding, and uncertain, so just bear that in mind as you navigate the dispute with your attorney!

How long does it take to negotiate a settlement?

There is no one-size-fits-all answer here. Settlement negotiations can vary in terms of how long they take to resolve — and ultimately, even if you receive an early settlement offer, you may not feel that the offer is “reasonable” or “fair” and this could further extend negotiations as you and the other party continue to go back-and-forth.

Factors that can influence whether you receive a fair and acceptable settlement offer include, but are not limited to:

  • The hostility of the defendant/insurer
  • Your willingness to accept a lowball offer
  • The severity of the injuries/losses
  • How obvious the liability is in the case
  • How much supportive evidence there is for your compensation claims
  • And more

The more obvious that liability is, and the more supportive evidence you have to prove your damages, the higher the settlement offer is likely to be. That’s why it’s so important to have an attorney help you navigate this process — they can build up your case so that the defendant/insurer sees the issue more clearly and is therefore more willing to offer a reasonable settlement. In the event that you decide to reject an insurance settlement offer, you can work with your attorney to move ahead to trial.

Options after a lowball settlement offer from your insurer

If you’ve received a lowball settlement offer from your insurance company, there are essentially three main strategic options that you have:

  1. You can resubmit your claim with the insurance company (generally with the assistance of an attorney), ensuring that you include all the necessary, missing documentation, and ensuring you have structured the claim so that it is less likely to be rejected or underpaid.
  2. You can potentially bring a lawsuit against the insurance company if you feel that they have engaged in adverse behavior against you when evaluating the claim and making a settlement offer.
  3. You can identify liable defendants and sue them for damages, thus securing compensation beyond your own insurer’s ability or willingness to pay out a claim settlement.

If you’ve been injured in an accident, then you may be entitled to sue and recover damages as compensation. In many cases, compensation is provided in the form of a settlement — that being said, not all settlement offers are reasonable. You could be lowballed, which may force you to reject the offer in order to secure adequate compensation. An attorney can help you reject an insurance settlement offer and secure a better one, or go to trial, if necessary.

Contact 1-800-THE-LAW2 to connect to an experienced attorney in our network for a free legal consultation. During this initial consultation, you’ll get an opportunity to discuss your case in detail and obtain guidance on next steps. There is no obligation to continue if you decide against it, so there’s really no downside! Call in and get started.

We look forward to assisting you.

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