Responding to a Low Personal Injury Settlement Offer

Tips on how to proceed when you receive an unreasonably low personal injury settlement offer.

In a typical personal injury case, after all medical bills and other injury information are gathered, you will likely make a settlement offer in writing. A formal settlement offer is usually made in a  demand letter  sent to the person responsible for the injuries -- or to his or her insurance company. In this article, let's assume that you are dealing with an insurance company. The insurance company may respond to your demand letter with an unreasonable ("low-ball") settlement offer. Your response to this initial settlement offer will go a long way toward determining what kind of outcome you'll get in your personal injury case.

(For more on demand letters in general, see Writing Your Personal Injury Demand Letter).

Calm Down and Analyze the Offer

It is a mistake to fire back with a quick emotional response to the low settlement offer. You may be desperately in need of money, but it is important to maintain a professional relationship with the other side -- whether it's a defense attorney or an  insurance claims adjuster. The initial offer by an insurance company is typically just a starting point for negotiation purposes. Therefore, it is not advisable to accept the initial offer unless it is an amount that will totally compensate you for all physical and emotional injuries.

Respond in Writing

Before writing a formal response, you can ask several specific questions to the insurance adjuster in order to evaluate the reasons for the insurance company's low initial offer. The responses to these questions will provide guidance in drafting your formal response and counteroffer. Patiently wait for the responses. Do not disregard this step if you do not receive a quick response. You may need to call or remind the adjuster in writing. Once you have the adjuster's responses, you can address each response in your formal reply and counteroffer.

The initial low offer may be due to insufficient information about injuries. In this case, provide detailed and updated information on medical bills and other relevant information. When discussing medical bills, always provide specific information on charges. It is often advantageous to enclose supporting documents such as records of medical treatment and a detailed description of all charges incurred. The insurance company can justify extremely low settlement offers when there is an absence of or incomplete medical documentation.

Unlike the initial demand letter, focus on emotional points in your response and counteroffer. It is likely that the factual timeline and physical injuries were sufficiently described in the initial demand letter and do not need to be repeated. For example, the costs and date of your wrist surgery was stated in your demand letter. Therefore, you should instead focus on the  pain and suffering  resulting from the injury. You can no longer enjoy your favorite hobby of painting. You can emphasize any long term disability or deformity resulting from the injury and include a list of activities that you can no longer perform. Obviously, emotional points will vary depending on each unique case.

To get an idea of what such a response letter would look like, see this sample letter on (Opens in a new window)

Formulate Your Counteroffer

Do not respond to a low personal injury settlement offer with an unreasonable counteroffer. Again, maintain a professional and detailed approach to settlement negotiations. Examine the amount you deserve and the amount the at-fault person can pay. Based on your injuries, you may feel that you deserve $40,000. However, the other side may have low insurance policy limits. In this case, the insurance company may offer $20,000. You find out that the other person can only pay $30,000. A reasonable counteroffer may be between $30,000 and $35,000.

As one might expect, there may be more than one counteroffer in a personal injury case. It may seem like a waste of time, but this kind of back-and-forth is the way that the personal injury settlement process is conducted. You may want to consult a personal injury attorney who is experienced with settlement negotiations and has previous dealings with insurance adjusters.

 Get the Agreement in Writing

Your communications with the insurance adjuster should be in writing, especially the final agreement. You must write a letter to the insurance adjuster confirming that a final agreement was reached. Be sure to get the insurance company's acknowledgment of the agreement in writing as well. These communications should be concise and state the essential details of the agreement including the settlement amount and the injuries encompassed in the settlement.

Get More Tips on Settling an Injury Claim

If you're handling your own personal injury claim without a lawyer, make sure to read through the articles we have filed away under Settle Your Personal Injury Claim. You'll find plenty of tips on dealing with the insurance company.

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