Should I Accept the Insurance Company's Settlement Offer?

An insurance adjuster's job is to close your claim for as little as reasonably possible. That doesn't make every offer unfair, but it does mean you should check a few things before you sign.

Signing is final

To get paid, you'll sign a release giving up all future claims from the accident. If you later need surgery, or your back never recovers, you can't reopen it. That's the single most important reason not to rush.

Questions to ask about any offer

1. Do I know the full extent of my injuries? If you're still treating, the answer is probably no. Doctors call the point where your condition has stabilized "maximum medical improvement."
2. Does it cover all my medical bills, past and future? Include therapy, prescriptions and follow-up care.
3. Does it cover lost income, including future lost earnings if you can't go back to the same work?
4. Is anything left for pain and suffering once bills are paid?
5. What will I actually net after liens from your health insurer, Medicare or Medicaid, and any lawyer's fee?
6. What are the policy limits? If the offer is the policy maximum, more money may have to come from your own underinsured motorist coverage or the at-fault party directly.

Why first offers are often low

Early offers come before the full bills arrive, before an attorney is involved and while people are stressed about money. Adjusters also use software that values claims based on the records you've provided. Missing records and gaps in treatment mean lower numbers.

How negotiation works

A typical claim moves like this: you (or your lawyer) send a demand package with records, bills, wage loss and a demand amount; the adjuster responds with an offer; you counter with reasons. It often takes several rounds. If it stalls, filing a lawsuit is the next lever, and many cases settle after that.

Signs you should talk to a lawyer first

• Serious injuries, surgery, or injuries that may be permanent.
• The insurer disputes fault or says your injuries weren't caused by the accident.
• You're being pressured to decide quickly.
• The offer barely covers your medical bills.
• Your filing deadline is approaching.

Represented claimants often recover more in serious cases, but in a minor claim with small bills a lawyer's fee may eat most of the gain. Most injury lawyers will tell you honestly in a free consultation whether they can add value.

Find a personal injury lawyer near you. Related: how much your case may be worth and how contingency fees work.

This guide is general information, not legal advice.