Auto accidents can throw a person’s life into chaos. Schedules are suddenly filled with doctor appointments, vehicle repair estimates, therapy sessions, insurance company calls, choosing a personal injury lawyer in Redding, and the logistics of managing life while injured and without a car or motorcycle.
It can be tempting to “take the cash and run” when an insurance company says they will quickly cut a check. Cash in hand means accident victims can pay for repairs and medical care and no longer deal with claims adjusters. Personal injury lawyers in Redding, California, know that an early settlement helps victims feel like life is getting back to normal.
Before accepting a settlement offer, however, accident victims must know four critical pieces of information. Talk with a Redding personal injury lawyer before accepting a settlement offer from an insurance company. The safety attorneys at Reiner, Slaughter & Frankel provide a free consultation for accident victims. Their personal injury lawyers will explain the best time to accept a settlement offer and the consequences of signing one too early in the process. Call them today.
1. Victims Can Reject a Settlement Offer and Still Receive Compensation
Insurance companies imply that settlement offers are “now or never” agreements. It seems that if an accident victim rejects the proposal, the victim will get nothing. This is not true.
Experienced personal injury attorneys know that a settlement offer is the beginning of a negotiation process with the insurance company. Insurance companies want to spend as little time and money as possible on each claim. Quick settlements help them achieve this goal. But quick settlements are usually unfair for accident victims because the value of most accident claims is much higher than initial settlement offers.
An accident victim can make a counter-offer to the insurance company or can reject the claim. When an accident victim is represented by a successful personal injury attorney, the insurance company knows that the case could go all the way to trial, which is expensive for the insurance company. Insurance companies are motivated to make fair settlement offers when an accident victim understands the claims process and the value of the case and is willing to go to trial.
2. Settlement Agreements are Final and Binding
Settlement agreements include a release of liability, which means the insurance company is not responsible for any payments outside of the settlement agreement. The victim cannot ask for more money in the future and cannot take the case to court.
This is true even if the accident injuries turn out to be more serious than initially thought, if unexpected complications arise, or if the victim didn’t understand the full value of the claim. For accident victims, the lack of complete information is one of the primary dangers of a quick settlement.
3. Injuries May Be More Serious Than They First Appear
The full extent of injuries from an accident may not be known for a long time after the incident. This could be due to many reasons, including the following:
- the injuries require more extensive treatment than anticipated
- the wounds don’t heal as expected
- complications arise
- secondary infections set in.
Before accepting a settlement, accident victims must know how injuries will affect current and future employment opportunities, mobility and activity levels, overall health, and quality of life. They should also understand what ongoing care or treatment will be needed as a result of the accident. These things are usually known once a person has reached maximum medical improvement (MMI). At some point in a person’s recovery, a doctor will determine that nothing more can be done to improve the patient’s condition because the patient has achieved MMI. Any impairment or injury existing at that point is not expected to get better; it is likely a permanent condition. Injured persons should not accept settlement offers before reaching MMI because the full impact of their injuries isn’t yet known.
4. The Total Cost of an Accident is More Than Out-of-Pocket Expenses
Many insurance settlement offers include obvious out-of-pocket expenses such as repairs, immediate lost wages, and medical expenses not covered by other insurance. They usually do not cover the full value of the accident. An experienced personal injury lawyer in Redding can present evidence of many other losses for which victims should be compensated. A fair settlement compensates victims for all current and future expenses and damages, including the following:
- Vehicle repairs
- Alternate transportation
- Replacement services for household tasks the injured person typically performs (like shopping and cooking, cleaning, yard work, driving family members to activities, caring for children)
- Medical expenses
- Costs of future medical treatment and therapy
- Lost wages
- Expected future lost earnings
- Mental health treatment for trauma and emotional injuries
- Pain and suffering
- Emotional or psychological injuries
- Loss of enjoyment in life activities
Accident victims who understand the value of everything that compensation should cover can determine whether a settlement offer is fair.
Liability Insurers Want to Control You
When a liability claim representative first reaches out to you after an accident, you relax just a little. Their contact verifies that the responsible driver has a valid insurance policy. It also confirms that they reported the accident. Despite these assurances, you must remain cautious.
No matter how kind and helpful a claim representative seems, they represent their policyholder’s legal and financial interests, not yours.
From the moment a claim representative begins interacting with you, they have two primary goals in mind.
- Control You: Establish a relationship to obtain information about you and your injuries, and so you will not contact an attorney.
- Control Your Settlement: Decide when (or if) they should initiate settlement negotiations and how much they should pay.
The most effective insurance claim representatives understand how their empathy and thoughtfulness influence you throughout the claim process. It is important to remember this long before you think about settling your claim.
Insurance Companies Represent Their Policyholders
While some claim representatives have an inherently good nature, it is part of their training. Their kindly attitudes often lull you into a sense of trust.
They blind you to the consequences of cooperating when they make a request.
- Give a recorded statement
- Sign an informed consent medical release
- Provide copies of your medical bills
- Provide a release that authorizes contact with your employer
- Visit their hand-picked doctor for an independent medical evaluation
- Accept a low settlement offer
You Control Settlement Timing
When you anticipate settling your claim, insurers often convince you that they have all the advantages. In most cases, that is not true. If their insured negligently caused your injuries, they must protect their legal interests by settling your claim or successfully defending the case should you choose to file a lawsuit.
You alone managed your injuries, pain, suffering, and ultimately your recovery. You alone have the right to decide when you should settle your claim. As you contemplate your decision, consider these questions.
#1. When does your statute of limitations run?
Before you decide to reject or accept a settlement offer, you should understand how much time you have left to file a claim.
Each state establishes a legal deadline by which you must settle your claim or file a lawsuit. In most jurisdictions, this deadline is called a statute of limitations.
The timing varies from one to six years, depending on the state where the accident occurred. The clock always begins counting down the day you have an accident and sustain an injury. If you miss your statute of limitations, you lose your right to recover compensation for your injuries.
If you deal directly with an insurer, they will not usually discuss the statute of limitations. If an insurer advises you of a legal deadline, some states consider it legal advice. Insurance companies simply do not talk about it. To avoid uncomfortable conversations and the appearance of bad faith, they usually stop all communications with you months before your statute of limitations runs.
A personal injury lawyer will know the statute of limitations in your case and will not let the insurance company run out the clock on you.
#2. Are you ready to settle?
Just because an insurer initiates settlement negotiations, it does not mean that you are ready to accept or reject their offer. As long as you have enough time before your statute of limitations expires, it is your right to postpone negotiations until you are ready.
If you are still under your doctor’s care and want to settle anyway, consider these important issues.
- Treatment: Will your doctor give you a prognosis about your future recovery and potential for impairments? Can you obtain an estimate of your future medical costs? Will the liability insurer add estimated future medical costs to your settlements?
- Lost income: Have you returned to work, or are you still losing income? How long will you remain disabled? Do you require vocational rehabilitation so you can return to your job or find other employment?
- Subrogation liens: Does your health insurer have subrogation rights that allow them to recover the amounts of the medical bills they paid? Will the liability insurer pay them directly or deduct their lien amount from your settlement? Will they accept a smaller subrogation amount?
A personal injury lawyer will calculate all of your losses. They will know what you deserve to recover for your injuries and will negotiate to get it for you.
#3. Have you thought about your settlement goals?
By the time you begin negotiating your settlement, you should have a settlement goal in mind. Do not expect guidance from the liability claim person. Many insurers use software to analyze injuries; others use formulas or settle based on similar claims they have handled. These types of evaluations do not usually consider all of your personal injury experiences.
Your lawyer will help you determine your settlement goals and work toward fulfilling them.
Do you understand what damages a settlement includes?
When negotiating a claim, insurers do not always explain what they are offering or why. Often they offer you a lump-sum figure. If you do not ask what it is for, you cannot challenge their offer point-by-point.
Most settlements cover two basic types of damage:
- Economic damages: Your out-of-pocket costs, such as lost wages, medical bills, rehabilitation costs, and plastic surgery.
- General or non-economic damages: The value placed on your pain, suffering, diminished spousal relationship, scarring, and other psychological and emotional issues.
A personal injury lawyer will calculate all of your losses and ensure that the insurance company doesn’t pay you less than you deserve
Do you understand why your settlement is personal to you?
Your claim’s settlement value is not just about medical bills, diagnoses, or temporary disabilities. It also considers how these things affected you and changed your life and lifestyle. A fair settlement value acknowledges that your injuries affected you in a different way than they would have affected anyone else.
As you are the only one who knows the details, it is your story to tell.
- When you negotiate your claim, you must prepare to explain how your pain kept you from holding your child, serving family dinner, or cleaning your house. You should explain how you could not socialize, play sports, or walk down the street. Talk about how you could not perform your job duties, or enjoy an afternoon without pain.
- You can maintain a daily journal while you heal. Document your pain, treatment, family experiences, etc. Illustrate how they changed your life and why you deserve a fair settlement.
- You can use your journal to remind you of the healing and recovery difficulties you have forgotten. If you did not keep a journal, spend time recalling and documenting your past difficulties before discussing your claim.
All of this will help your lawyer negotiate the best possible settlement in your case.
Sometimes You Should Simply Postpone Your Settlement Negotiations
Sometimes your lawyer will advise you not to accept or reject the insurance company’s offer or respond with a counteroffer.
#1. You realize that your injuries are more serious than you anticipated
Remain cautious about accepting a settlement offer, especially during your early recovery stages. That is often when an unresolved condition has the most potential for derailing your progress.
Doctors only treat the conditions they know about. They do not usually anticipate subsequent injuries or slow recoveries. When you sustain serious or catastrophic injuries, your medical team will not know if you have recovered for a long time after your accident.
This is often because:
- Your injuries require more extensive treatment than originally anticipated.
- Your wounds did not heal as expected.
- Unexpected complications arose.
- Secondary infections set in.
- You have more profound impairments than predicted.
- Your plastic surgeon cannot fully revise your scar.
- You developed PTSD or another psychological issue.
#2. You have not reached maximum medical improvement.
Never accept a settlement offer until your doctor understands the full impact of your injuries. Maximum medical improvement is the milestone in your recovery where the doctor acknowledges that there is nothing more they can do for you.
Until you reach this point in your recovery, you will have no idea if you will encounter additional problems. At MMI, you see no additional improvement in any accident-related impairment or injury. It is possibly a permanent condition. When you understand this, it gives you the proper perspective for evaluating and negotiating your injury claim.
#3. You realize that you cannot change your mind once you sign a release
The lack of complete information is one of the primary dangers of a quick settlement. Once you sign a release, it does not matter if you encounter an unexpected medical complication. It does not matter if you did not understand the full value of your claim.
A settlement agreement includes releasing all liability for claims against the party who caused your accident. The insurance company is not responsible for anything else after you sign. No matter what happens, you cannot ask for more money in the future, and you cannot take the case to court. When you realize this, it forces you to reconsider how to proceed with negotiation and settlement.
#4. You have not consulted a personal injury attorney
A serious accident can overwhelm you on so many levels.
When you are severely or catastrophically injured, consult a professional who deals with similar claims every day.
- Attorneys understand insurance company claim handling policies and settlement practices. Negotiation strategies do not distract them because they have heard them all before.
- You do not have to trust the insurance company’s intentions, especially when you do not believe it is a good idea.
- Attorneys investigate your accident to clear up the types of liability issues that affect settlement negotiations.
- A personal injury attorney conducts injury and verdict research to determine a fair settlement range for your injury.
- They consult with you to determine if the timing is right to initiate settlement negotiations.
- When negotiations do not go as they should, an attorney files a lawsuit on your behalf while they continue handling your case.
- Attorneys keep track of your statute of limitations and protect your rights accordingly.
- When possible, attorneys avoid litigation by resolving your injury claim through mediation or other Alternative Dispute Resolution programs.
- When necessary, they present your evidence in court and ask a jury to give you a fair award.
You Control Your Negotiations
You might not feel that you control your claim negotiations, but you do. No matter what the insurance company does, it all comes down to you and what you want and need.
Insurance companies make you feel a sense of urgency when they offer you a settlement. They sometimes give you the impression that the offer will expire if you do not agree to their terms. It is true that if they make an offer and you do not accept it, the mere passage of time confirms your rejection. As long as your statute of limitations is at least a few months away, you have time to consider their offer and make a counteroffer of your own. You have time to change gears entirely and find an attorney to handle your case.
When a liability insurer makes a settlement offer, they want to settle your case. That is a reminder that you are in control.
As you consider whether to accept their offer, remember:
- When an insurer makes an offer, they usually have an open liability claim file and have taken steps to meet their reserve requirements. They have already estimated how much they think they will pay for your claim, and they have set aside money (a reserve) to pay you. They do not expect you to simply go away.
- An insurance company needs your signature on a release to close their claim file. As an insurer, protecting their insured is their primary duty. Until you sign a release of all claims, they have not kept that commitment.
- Some insurers play hardball. They offer a low settlement and stick to it. This can mean that they want to force you into filing a lawsuit. They realize that your attorney must have the resources to litigate your case when you file a lawsuit. When you work with an attorney with the resources to take your case to court if necessary, insurers sometimes change their negotiation strategy.
Would a Personal Injury Attorney Improve Your Settlement Outcome?
When you sustain severe injuries in an accident, you are at a disadvantage when dealing directly with a liability insurer. Before you accept a settlement offer, consult with a personal injury lawyer. When a law firm handles your case, they review the liability issues and evaluate your injuries. They eliminate the insurance company’s pressure to settle by intervening with responsible parties, insurers, and their attorneys.
When you contact a personal injury attorney for a free consultation, they listen to your story, explain your legal options, and determine if their firm can help you.
A Personal Injury Lawyer in Redding Protects Victims from Insurance Companies
Unrepresented accident victims are at a disadvantage when dealing with insurance companies. Before proceeding with an insurance claim, anyone involved in an accident should speak with an experienced personal injury lawyer. At the initial free consultation with a personal injury attorney at the Redding, California firm of Reiner, Slaughter & Frankel, accident victims learn their options and the value of their case. Call Reiner, Slaughter & Frankel today to discuss the four things victims should know before accepting an insurance settlement offer.