Man going over insurance claim with client

Why You Shouldn’t Always Take the First Offer from the Insurance Company

Scott P. Landry June 24, 2021

If you have been injured due to someone else’s negligence, the first thing you want to know is whether that person has insurance to cover the damages you’ve suffered. If there is an insurance policy you can file a claim against, you may be relieved — however, that is merely the beginning of what could be a long fight for fair compensation.

Most victims who are pursuing a settlement often ask themselves, how much is enough? Invariably, the first offer you receive from the insurance company will not be their best offer. If you are pursuing a claim, you should understand why that first offer often misses the mark.

At Landry Law, P.C., we help clients in Lone Tree, Trinidad, and Denver, Colorado better understand the negotiation process and help them fight for the compensation they need and deserve. We understand the ins and outs of settlement offers from insurance companies, and we can help you navigate these murky waters with confidence.

How Will an Insurance Company Respond if I File an Accident Claim?

When you first file a claim, the insurance company is usually pretty quick to assign your claim with a case number and a claims representative. This may lead you to believe the process will move quickly, however, you may hear nothing from them for a number of days or weeks. When you attempt to reach the claims representative, you may get their voicemail. You may leave message after message, inquiring about the status of your claim — but receive no response. Avoidance is a tactic often used by insurance companies in the hopes that you will simply give up and stop pursuing a claim.

If you are persistent, the insurer will eventually submit an offer to you, along with a Full Release of All Claims for you to sign. Once you sign it, you are finished. There is no going back for more. You release the insurance company and their insured party from any more responsibility related to the accident or your claim.

Why Should I Refuse the First Offer?

If you have not already, by the time you receive the insurer’s initial offer in full settlement of all claims, you should immediately talk to a Colorado personal injury attorney. The claims process may be new to you, but not to an experienced attorney.

Unless the first offer is for policy limits, which you should always verify by requesting a certified copy of the insured’s policy, the first initial offer will likely be a lowball offer. You may be tempted to take it, especially if you have been waiting a long time for an offer and you are struggling with medical bills and other expenses. Keep in mind that the insurer typically knows this and is offering just enough to entice you to accept and end your pursuit for full compensation.

In some cases, that first offer could even come quickly. However, accepting an early offer could prove to be shortsighted, as you may not know the full extent of your injuries for months. Remember, if you settle and sign the Full Release, you cannot seek any additional compensation, even if your medical expenses, lost wages, or pain and suffering increase.

What is “Maximum Medical Improvement” And How Does it Affect My Claim?

Maximum medical improvement (MMI) is the point at which there is nothing more that can be done to improve the medical outlook for the victim’s injuries. Do not equate MMI to a full recovery. Some injuries can never be totally healed.

For example, if you sustained a torn rotator cuff in a car accident, you might have undergone surgery followed by physical therapy. Despite having completed all the medical treatment possible, you may still have decreased strength and movement in the shoulder for the rest of your life. In this case, you have reached MMI, but your shoulder will never be fully recovered with fully restored strength and range of motion.

At Landry Law, P.C., we do not submit settlement demands before our clients have reached MMI. Until doctors have determined your improvement is the best it can be, there is always the possibility that you will undergo further treatment which means your medical expenses will increase. As your damages increase, so does the value of your claim.

What Happens Next?

Once your treating physician has determined you have reached MMI, the next step is to submit to the insurance company a settlement demand letter. In the letter, you make a demand for the sum of money that you believe is fair compensation for your damages. The demand letter is accompanied by documentation showing the value of your claim, establishing liability, and documenting the cause of your injuries, including:

  • The accident report and any other evidence of fault or liability on the part of the company’s insured who caused your injuries.

  • Copies of all medical records documenting your injuries and causation.

  • Copies of all medical bills documenting your expenses.

  • Documentation of income lost while being unable to work due to your injuries.

Rarely will the insurance company agree to settle for the amount you have demanded. Remember, they are motivated by profit which means settling claims for as little as possible. So, the company will likely respond with a counteroffer lower than the amount you demanded, and settlement negotiations will typically continue back and forth until a suitable offer is agreed upon by both parties.

If you do not agree to a settlement offer, you can file a personal injury lawsuit against the negligent party. The defendant’s insurance company will hire a legal team to defend themselves against the lawsuit.

Let Landry Law, P.C., Help

As you can see, handling your own claim with the negligent party’s insurer can often be complicated and contentious. The best move you can make is to hire an experienced personal injury attorney who can guide you through the claims and settlement process, and if necessary, prosecute your claim in civil court. An insurance company will take your claim more seriously when forced to deal with a skilled attorney.

At Landry Law, P.C., we know how to document personal injury claims, craft demands, and negotiate with insurance companies. Insurers will have attorneys working for them, and so should you. We have represented hundreds of injured clients and their families in Lone Tree, Trinidad, and Denver, Colorado. Consultations are free and you pay nothing unless you settle your claim or are awarded damages from a jury. We don’t back down, and neither should you. Call or reach out to our office today to get started.