Approximately 95 percent of personal injury cases are settled out of court between the insurance company and the injured party.
Settlements are the negotiated outcome between the people representing the insurance company and usually a lawyer representing the injured party.
Personal injury claims are serious by their very nature. Accordingly, you are entitled to be financially compensated for the loss and for pain and suffering.
The settlement amount is always a compromise between what the insurance company would like to payout (as little as possible) and the amount the injured person would like to be paid out (as much as possible).
Settlement amounts are complex to calculate, and many elements need to be considered.
Suppose you are unrepresented by a specialist personal injury law firm. In that case, you run the genuine risk of accepting an offer that is way less than you are entitled to.
It’s best to appoint a lawyer early on in the proceedings. This Chicago car accident lawyer specializes in personal injury claims and has a vast amount of experience.
Why should you never accept the first offer? Read on with me.
The Context of the Settlement Arena
There are two leading players in the settlement arena.
Your lawyer will be trying to maximize the payout for you as the client.
The insurance company lawyer will aim to pay out the lowest amount possible.
Remember that a vast amount of time is spent dealing with settlement negotiations every day.
The lawyers will often be familiar with one another from previous matters.
As a result, they have adopted specific strategies for their settlement negotiations.
Most importantly, the lawyers are diametrically opposed.
Low-balling is the Order of the Day
An initial settlement offer is made by the insurance company. The insurance company is running a business and is concerned with its bottom line. Therefore, the less they have to pay out, the better their margins.
Remember that the higher the settlement amount your lawyer achieves, the higher his earnings will be, as the contingency fee is usually based on a percentage of the settlement amount.
The first offer is always way too low and simply meant to start the negotiation process.
Unrepresented parties sometimes accept the first offer as they are grateful they are getting something and are often desperate for the money.
Insurance companies will be even more likely to tender a meager offer to unrepresented parties, hoping they will accept due to a lack of knowledge and experience.
So, typically the initial settlement offer is rejected out of hand, and the lawyer will hold the line and state that they would instead go to court.
The insurance company does not want to go to court as it is extremely time consuming and expensive. This will generally prompt a higher settlement offer.
This process continues until the parties arrive at a compromise acceptable to the injured party. At this time, a settlement is reached, drafted and signed.
Only One Bite at the Cherry
You must at all times be aware that you only get one bite at the cherry. Therefore, if you sign a settlement agreement presented to you at any stage, you are bound by the terms.
You cannot later say that you were unaware of some future expenses and then try to increase the settlement amount to cover these.
This is why it is so important to use an experienced and specialized personal injury attorney when negotiating with insurance companies.