Once you receive a lowball settlement offer, politely reject it, remain calm, ask for a written explanation, and document everything. Low settlement offers are a common tactic insurance companies use to reduce the actual claim value after a Chicago car accident. The insurer exploits your vulnerability and limited legal knowledge to trick you into accepting a payout that does not cover the full scope of your damages or losses.
Retaining a Chicago car accident lawyer is another crucial step after receiving an unreasonable settlement offer. The lawyer can maximize your compensation by calculating the true value of your damages, sending a counteroffer, negotiating with the insurer, and going to court if necessary. So, do not take on the insurance company alone. Instead, call Lloyd Miller Law Group at 773-838-8100 to discuss your next steps with one of our seasoned car accident lawyers.
Table of Contents
Why are Insurance Companies Making Low Settlement Offers After a Chicago Car Accident?
Insurance companies make low settlement offers after a Chicago car accident because:
Increasing Profit Margins
Insurance companies are for-profit entities. Their primary source of revenue is the premiums they receive from clients in exchange for insurance coverage. Their profit is often the difference between premiums and total claim payouts. The lower the payout they convince you to take, the more money they retain.
Avoiding a Lawsuit
Insurance settlement offer letters include a release of claims clause. Consequently, immediately after you sign the letter, you will be ineligible to file a lawsuit against the insurer on that same claim. Signing the offer letter also bars you from requesting additional funds from the insurer.
Assuming You Won’t Contest the Offer
Your medical bills, lost wages or earnings, and other accident-related expenses may skyrocket after a car accident. These expenses and losses can put you under immense financial distress. You are likely to accept the first offer from the insurer under these circumstances. What’s more, many accident victims do not consider the full scope of their injuries and losses or seek legal support. They take the first offer with little to no pushback.
Generating Settlement Offers Using Software
Large insurance companies use software to manage and generate settlement offers for the many claims they receive daily. The software assesses your claim against related claims and calculates your claim value. The software-generated value is often lower than the actual worth of your claim because the software is built to safeguard the insurer’s best interest. The software also cannot consider the unique facts and circumstances in your claim when estimating its value.
What Does a Low Car Accident Settlement Offer Really Mean for Your Claim?
A low car accident settlement offer rarely reflects the true value of your claim. Instead, it is usually a negotiation tactic meant to check whether you will take less than a reasonable payout. Every dollar an insurance company deducts from your actual payout increases the money it makes. A low offer often indicates the insurer is focusing on raising its profit margins rather than paying your claim in full.
A low payout may also signal efforts to reduce the severity of your injuries. The insurer may, for instance, term some of your treatments as unnecessary or claim you received care longer than medically required. Insurance companies often raise such arguments when they want to avoid covering higher settlements for brain injuries, spinal cord damage, and other life-threatening injuries.
What Should You Do If You Receive a Low Settlement Offer After a Chicago Car Accident?
A low settlement offer after a Chicago car accident is often the first offer, not the best. It means the insurer sees an opportunity to negotiate. So, the steps you take immediately after receiving the lowball offer will impact the outcome. Actions you can take to protect your rights and maximize your compensation include:
Politely Rejecting the Offer
Nothing stops you from declining the first offer. So, politely tell the insurer that you are declining the offer because it does not account for all your damages. Do not counter the offer right away unless you have accurately valued your claim or consulted a lawyer. Rejecting the first offer does not jeopardize your claim. Instead, it allows negotiations to proceed.
Remaining Calm
It’s natural to feel irritated and insulted after receiving an unfair offer. Such an emotional response can, however, result in a quick acceptance or a costly blunder during negotiation. Staying calm and professional can help protect your claim.
Asking for a Written Explanation
Ask the insurer to explain in writing how it arrived at the settlement amount in the offer letter. The written explanation should clearly show how liability was determined and how damages were calculated.
Keeping all Relevant Records
Strong documentation can help increase your recoverable damages, especially in shared fault cases. So, be sure to keep records of treatment programs, medical bills, vehicle repair or replacement receipts, and communications between you and the insurer. You should also have a pain journal to document your pain levels and how the accident-related injuries have affected your quality of life.
Hiring a Chicago Car Accident Lawyer
Facing the insurance company with an experienced lawyer on your side can increase the chances of the company raising the offer. In fact, a 2017 survey found claimants working with a lawyer received settlements that were roughly four times as high as those awarded to unrepresented claimants. Seasoned lawyers know how to determine liability in cases where drivers blame each other, such as those involving intersection accidents. They can calculate the actual worth of your claim, take over communications with the insurer, and counter any attempts to downplay your injuries. They can also proceed to trial if the insurer declines to increase the payout or engages in delay tactics.
Don’t accept a lowball settlement. Instead, contact a car accident lawyer at Lloyd Miller Law Group to schedule a free consultation. Our lawyer will review your claim, determine the best legal option, and aggressively fight for a reasonable settlement.
FAQs About Lowball Settlement Offers
Why do insurance companies offer low settlements after a car accident in Chicago?
Low settlement offers are often an attempt by insurance companies to maximize their profits by reducing the amount of money spent on a claim. These offers are often a negotiation tactic. Insurance companies hope you will accept the offer without fighting back due to financial constraints, poor negotiation skills, and limited legal knowledge.
Should I accept a low settlement offer from the insurance company?
Never accept a low settlement offer without careful consideration and input from your lawyer. A low, first offer is often an invitation to the negotiation table. You will lose your right to recover compensation from the insurer through a lawsuit if you accept a settlement.
How can a Chicago car accident lawyer help if the settlement offer is too low?
The lawyer will start by reviewing the offer to determine if it captures all your damages and accident-related expenses. If not, the lawyer will counter the offer with a figure that accurately reflects your damages and move to court if negotiations are unsuccessful.
