Responding to a Low Personal Injury Settlement Offer

You've received a ridiculously low personal injury settlement offer from the insurance company. Now what?

Updated by , J.D.

In a typical personal injury case, after the nature and extent of your injuries and other losses (your "damages") become known, you (or your lawyer if you have one) will send a demand letter sent to the person responsible for the injuries, or to that person's insurance company. In this article, let's assume you're 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 whether you'll end up with a fair outcome.

(Get the basics on writing your personal injury demand letter).

Try to Remain Calm and Analyze the Offer

It's usually a mistake to fire back with a quick emotional response to a low personal injury settlement offer, and it can be an even bigger mistake to accept it. You may be upset, or in need of money, but it's important to maintain a professional relationship with the other side—whether it's a defense attorney or an insurance claims adjuster. Remember that the initial offer by an insurance company is typically just a starting point for settlement negotiations. Learn more about how an insurance adjuster comes up with a settlement offer.

Respond in Writing

Before writing a formal response, you can call or email the adjuster and ask several specific questions in order to evaluate the basis for the low initial offer. The responses to these questions will provide guidance when you're drafting your formal response and counteroffer.

The initial low offer may be due to insufficient information about your injuries or other claimed losses. If this is the case, provide the adjuster with itemized and updated medical bills, proof of lost income, and other relevant records.

If you didn't do this in your initial demand letter, you may want to focus on the more subjective and emotional points of your case in your response and counteroffer. It's likely that the factual timeline of the accident and your medical treatment are sufficiently described in your initial demand letter, and do not need to be repeated. For example, the costs and date of your wrist surgery may have been covered, but maybe the effects of your injuries weren't colored in. So, your formal follow-up correspondence might provide a chance to focus on your non-economic damages, like your "pain and suffering" and other emotional effects of what happened. Mayber you can no longer enjoy your favorite hobby of painting, for example. Obviously, emotional points will vary depending on each unique case. To get an idea of what this kind of response letter would look like, see this sample letter on (Opens in a new window)

Formulate Your Counteroffer

It's never a good idea to respond to a low personal injury settlement offer with an unreasonably-high counteroffer. Again, it's important to maintain a professional and detailed approach to personal injury settlement negotiations. Consider the amount you think you deserve, the limits of the applicable insurance coverage, and the at-fault party's potential assets. 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. A reasonable counteroffer may be between $30,000 and $35,000.

As you 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 a standard part of the personal injury settlement process.

Don't Settle Until You're Healed

It's important not to accept the insurance company's settlement offer before you've fully healed from your injuries following the accident, or until you at least understand the full nature and extent of your injuries, so that the settlement will cover any necessary future medical treatment. Once you accept the settlement and sign a release, you can't go back and file a personal injury lawsuit or otherwise ask for more money.

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