If you’ve been injured in an accident that wasn’t your fault, you’re legally entitled to compensation to cover expenses related to your medical bills, lost income, and pain & suffering.

You’ve done your part. Collected and documented evidence relating to the accident. Filed an insurance claim within the statute of limitations. Now it’s up to your insurer to provide you with a settlement offer.

Not happy with the settlement offer? What happens when you reject an insurance settlement offer that doesn’t adequately cover out-of-pocket expenses related to your accident?

If you’ve been asking yourself these questions, this guide is here to help you understand the risks and benefits of rejecting settlement offers. Our goal is to help you understand when to accept a settlement offer so that you can receive the most compensation possible and successfully recover from your injuries.

Table of Contents

What Is a Settlement Offer?

A settlement offer is a formal proposal from an insurance company to resolve your injury claim by paying a specific amount of money. In exchange, you give up your right to pursue further legal action. Settlement offers are typically extended after you’ve filed a personal injury claim and the insurance company has investigated the incident.

When you file a claim, an insurance adjuster will be assigned to your case. They’ll conduct a thorough review of all available evidence, including police reports, medical documentation, proof of lost wages, and other relevant information. Based on their evaluation, they’ll calculate what they believe your claim is worth and present an initial settlement offer.

Settlement offers are common in various personal injury scenarios, particularly:

Car accident cases where injuries have been sustained
Slip and fall incidents on commercial or private property
Workplace injury claims
Medical malpractice situations
Product liability cases

Why Are Settlement Offers Often Low?

Insurance companies are for-profit businesses. Their primary goal is to maximize profits by minimizing payouts on claims. This fundamental business model often results in initial settlement offers that undervalue the worth of your claim.

Insurance adjusters employ several strategies to justify lower settlement offers:

Lowball Offers

They may question the severity of your injuries or suggest that some of your medical treatment was unnecessary. This tactic allows them to reduce the value they assign to your medical expenses and ongoing care needs.

Use of Fault Determination

Adjusters often dispute liability by suggesting you were partially at fault for the incident. By arguing shared responsibility, they can justify reducing the settlement amount proportionally to your alleged contribution to the accident.

Underestimating Losses

They might minimize the impact of your injuries on your daily life and work capacity, leading to lower valuations for pain and suffering and lost wages. They may argue that your injuries aren’t as debilitating as you claim or that you could return to work sooner than your doctor recommends.

These settlement tactics are particularly concerning because they often come when you’re most vulnerable—facing mounting medical bills and potentially unable to work. Insurance companies know this and act accordingly. They hope that financial pressure will motivate you to accept a quick but inadequate settlement.

What Happens If You Reject a Settlement Offer?

Rejecting a settlement offer initiates a more complex phase of the claims process, with potential benefits and risks to consider. Understanding what happens next can help you make an informed decision about your case.

Immediate Next Steps

When you reject a settlement offer, you must next present a counteroffer to the insurance company. This counteroffer should be based on a detailed analysis of your damages, including:

Current and future medical expenses
Lost wages and diminished earning capacity
Property damage costs
Pain and suffering
Other accident-related expenses

The negotiation process that follows often involves several rounds of offers and counteroffers. Your attorney will submit a demand letter outlining your counteroffer, supported by comprehensive evidence. The insurance company will review this information and respond, usually within a few weeks.

Risks of Rejecting a Settlement Offer

While rejecting an initially low offer is often the right choice, it’s important to understand the potential risks:

Risk of Losing the Offer Permanently

The most significant risk is that the insurance company might withdraw its offer entirely. While this is statistically rare, it can happen if new evidence emerges that weakens your claim or if the insurance company believes you’re being unreasonable in your demands.

Longer Settlement Timeline

Additionally, pursuing negotiations or litigation will extend the timeline of your case. This means a longer wait for compensation, which can be challenging if you’re facing immediate financial pressures from medical bills or lost income.

Benefits of Rejecting a Settlement Offer

Despite the risks, refusing a low settlement offer often leads to better outcomes. The primary benefits include:

The Opportunity for Higher Compensation

The most obvious advantage is the potential for significantly higher compensation. Initial offers are typically well below the true value of your claim, and negotiation often leads to substantially better settlements.

Indicates That You Know Your Rights

Rejecting a low offer also sends a clear message to the insurance company that you understand your rights and the true value of your claim. This can lead to more serious negotiations and better treatment throughout the process.

How to Respond to a Low Settlement Offer

Evaluate the Offer

If you’re not happy with the settlement offer you’ve been given, conduct a thorough evaluation to determine if it’s fair before you respond. Consider factors such as:

The full extent of your current and future medical needs.
Your complete lost income, including future earning capacity.
The strength of your evidence.
Similar settlements in comparable cases.
The policy limits involved.

An experienced personal injury attorney can help you assess whether an offer is reasonable based on these factors and their experience with similar cases.

Making a Counteroffer

When preparing your counteroffer, take these essential steps:

Collect Evidence

First, compile comprehensive documentation of all your damages. This includes complete medical records, expert opinions about future care needs, detailed lost wage calculations, and evidence of any other accident-related expenses.

Write a Formal Demand Letter

Second, prepare a detailed demand letter that clearly explains why the initial offer is insufficient and justifies your higher counteroffer. Your demand should be higher than your minimum acceptable settlement to leave room for negotiation, but not so high that it appears unreasonable.

Handling “Take It or Leave It” Tactics

Insurance adjusters sometimes use aggressive tactics to pressure claimants into accepting low offers.

Common pressure tactics include:

Setting arbitrary deadlines for acceptance.
Claiming this is their “final offer”.
Suggesting you won’t get a better offer elsewhere.
Implying your claim is weak.

The best response to these tactics is to remain calm and professional while standing firm. Hiring an attorney to handle these communications can safeguard you from these pressure tactics and ensure your rights are protected throughout the claims process.

Legal Options After Rejecting a Settlement Offer

Filing a Lawsuit

When settlement negotiations reach an impasse, the next step toward securing fair compensation is to file a personal injury lawsuit This decision escalates your claim from informal negotiations to a formal legal process within the court system.

First, your attorney files a formal complaint with the court, detailing your injuries, the defendant’s liability, and the compensation you’re seeking. The defendant then has some time to file their response.

Next comes the “discovery phase”, a crucial period where both sides exchange information and evidence. This process includes:

Written interrogatories (questions that must be answered under oath).
Document requests for medical records, accident reports, and other relevant evidence.
Depositions of witnesses, experts, and involved parties.
Physical examinations by medical experts.

Discovery often reveals new information that can strengthen your position or lead to more favorable settlement offers. Insurance companies frequently increase their settlement offers during this phase, as they better understand the strength of your case and their potential exposure to trial.

Mediation and Trial

Before proceeding to trial, most courts require parties to attempt mediation. In this structured negotiation process, a neutral mediator facilitates discussions between both parties to identify common ground and potential compromises. The mediator doesn’t make decisions but rather guides both sides toward a mutually acceptable resolution.

If mediation doesn’t result in a settlement, your case proceeds to trial. During trial:

Your attorney presents evidence supporting your claim.
Witnesses testify about the accident and your injuries.
Expert witnesses explain the technical aspects of your case.
A judge or jury determines liability and damages.

Common Mistakes to Avoid When Rejecting a Settlement Offer

Always consult with your attorney before accepting payments. Never accept partial payments without fully understanding their implications. Some insurance companies may try to issue partial payments that, if accepted, could limit your right to pursue full compensation.

Don’t forget to document everything, including:

All communications with the insurance company.
Dates and content of settlement offers.
Your responses to offers.
Any pressure tactics or deadlines imposed.
Medical treatments and related expenses.

When to Accept a Settlement Offer

The decision to accept a settlement offer requires careful consideration. Before doing so, weigh long-term and short-term factors such as:

The strength of your evidence.
The clarity of liability.
Your current and future medical needs.
Your financial situation and need for immediate compensation.
The emotional toll of continued litigation.
The potential value of your case at trial.
The risks and costs of continued litigation.
The likelihood of a better offer.
The time value of money versus waiting for trial.

An experienced attorney plays a crucial role in this decision-making process by evaluating your offer against similar cases they’ve handled. They can provide insight into local jury tendencies and advise on the likelihood of a better outcome with continued negotiation versus a trial.

The Role of a Personal Injury Lawyer

Personal injury lawyers play a vital role as advocates when it comes to dealing with insurance companies and navigating legal processes. Their in-depth local knowledge and ability to gather crucial evidence can help you steer through the complexities of insurance claims, ensuring you receive the settlement you deserve.

Personal injury lawyers are skilled negotiators who effectively articulate your interests. For these reasons, it’s always wise to consult with an experienced lawyer before rejecting or accepting a settlement offer from your insurance company.

And remember, while your attorney will help you understand all aspects of the offer and its implications, the final decision to accept or reject a settlement offer always remains yours.

Consult a Personal Injury Lawyer Today to Maximize Your Settlement

At Naqvi Injury Law, we understand the complex criteria for rejecting or accepting insurance settlement offers. Voted Las Vegas’s #1 personal injury attorney, we have a proven track record of successfully advocating for clients who have been injured by negligent behavior.

Our experienced personal injury attorneys will carefully evaluate your case to calculate damages and evaluate whether your settlement offer captures the total loss. If, after careful consideration and professional negotiation, we determine together that your settlement offer is insufficient, we will develop a strong legal strategy to get you more compensation.

Not happy with your settlement offer? Contact Naqvi Injury Law today for a free consultation.