Rejecting and Countering Insurance Settlements

By Chris Dixon


The first step to winning an insurance claim is to send a demand letter to the negligent party’s insurer. The demand letter includes background information, medical bills, lost wages, a total of the damages, and why you believe the insurer (and their client) is liable for the accident.

Sending a demand letter and requesting $120,000 in damages doesn’t mean the insurance company will cut you a check then and there. An insurance adjuster will take a look at your demand letter and supporting evidence, police reports, witness testimonies, go out to the scene if required, and may request your medical records. It’s the adjuster’s job to see A) How serious your claim if, B) If the settlement you requested is fair and accurate, and C) Calculate and send you a counteroffer.

How Insurance Settlement Counteroffers Work

It’s rare that an insurer will accept your initial settlement amount. Instead, they’ll look at the accident reports and supporting evidence, the general and special damages, and come back with a much lower number. Do not immediately accept a lower settlement. This is a trick insurance companies use to reduce the payout. By taking advantage of financially struggling and injured victims, they assume you are much more likely to accept any dollar amount as long as it helps you out of your current situation.

After they receive your demand letter, the insurer will take a look at the claim and will likely give you a call and an official letter with their settlement. The adjuster is investigating liability and if you’re partially at fault. They’re trying to figure out the cheapest way to keep a claim from going public as a lawsuit. An adjuster may mention “authority,” which is what the adjuster claims to be the highest limit they can pay out on any given policy. Again, this is another trick.

If the insurance adjuster is slow getting back to you, call them. If they provide you with a counter over the phone, make sure you get a letter. The insurer is making interest off of your potential settlement and wants claims to drag on as long as possible.

Rejecting a Settlement Offer

Once you get that initial offer back from the insurer, don’t be shocked if the number is much lower than what you originally sent. The adjuster will likely pick apart your general damages such as pain and suffering. If they do so, you might consider asking why the adjuster lowered certain numbers. If they can justify it, or if they didn’t justify a reduced settlement, there’s a good reason to do so.

Negotiating a Counteroffer

Rejecting an offer and negotiating a new sum can be challenging. First off, you need to respond to their lower offer and justify why you believe certain figures should be included. Include more evidence, expand on your original demand letter, and state why you deserve a higher payout.

One major risk is sending back a counteroffer that is much lower than your original claim. You don’t want to do this. Sending in a slightly lower number shows that you’re willing to make compromises and the insurer will be more willing to accept it. Maybe they had trouble accepting a five-times’ pain and suffering claim and it should be reduced to three times the amount of your special damages. If they accept right away, the odds are that you could’ve won a lot more.

What If We Can’t Negotiate a Settlement?

If you and the insurer can’t agree on a number, it’s time to reach out to an attorney. This has multiple benefits. For one, having a lawyer on your side can convince the insurance adjusters that you’re serious about your claim. Also, insurers don’t usually benefit from having a claim go public in a civil lawsuit.

Accepting Insurance Claim Offers

It’s uncommon, but an adjuster could come back and make a reasonable settlement that is only slightly less than your original claim. This is when it’s important to contact a personal injury attorney that specializes in dealing with insurers and escalating claims to court. A lawyer can also help you decide if the insurance company is acting in bad faith, in which case you might have a major lawsuit on your hands. The Dixon Injury Firm is free 24/7 to answer any questions you have about settling insurance claims out of and in court. Our St. Louis personal injury lawyers are here to help.

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