What Happens When You Reject an Insurance Settlement Offer?

Getting hurt because of someone else’s negligence can throw your life off track. Beyond the physical pain, you’re often left with mounting medical bills, lost wages, and uncertainty about what the future holds.

When dealing with an insurance claim, it’s essential to carefully evaluate any settlement offer you receive. Insurance companies often try to settle for the lowest amount possible, but that initial offer may not cover all your expenses or future needs.

If the offer seems too low, remember – you don’t have to accept the first settlement offer an insurance company puts on the table.

What happens if you refuse a settlement offer? The answer depends on your situation and what steps you take next. By understanding the claims process and how a skilled personal injury attorney can advocate for you may help you make decisions that align with your best interests.

Understanding Settlement Offers

When you are injured because of another person’s negligence, you may seek compensation to cover the losses stemming from the incident. Settlement offers play a central role in resolving personal injury claims, allowing both sides to avoid the uncertainty and expense of a trial. Understanding what a settlement offer involves and how these offers are structured can help you make informed decisions about your case.

What Is a Settlement Offer?

A settlement offer is a proposal from the at-fault party (usually their insurance company) to resolve a personal injury claim. It typically involves a lump-sum payment in exchange for you agreeing not to pursue any further claims related to the incident. Once you accept an offer, that’s it. – You can’t ask for more money later, even if it doesn’t cover all your losses.

For many, accepting an initial offer provides a quick way to access funds to cover medical bills, lost income, and other damages, which can offer immediate relief during a challenging time. However, accepting an initial settlement offer comes with trade-offs. While it might feel like the faster option, it may not fully address all the losses you’ve suffered.

Settlement offers are an effective way to receive compensation without the hassle of going to court. However, the initial offer is just a starting point for negotiations and must be approached carefully.

How Insurance Companies Calculate Initial Offers

Insurance companies base their initial settlement offers on a variety of factors, many of which are designed to minimize the payout. They consider details such as:

Economic damages: These losses are easier to quantify because they come with clear financial records, including:
- Medical expenses: They assess documented medical bills related to the injury.
- Lost wages: They estimate lost income during recovery.
Policy limits: Insurance coverage limits may cap what the company is willing to offer.
Liability assessment: Adjusters evaluate how much fault their insured party holds for the accident.
Non-economic damages: These damages compensate for the more subjective consequences of an injury, such as physical pain, emotional distress, or diminished quality of life. Insurers often undervalue or exclude these losses in their initial offers.

The calculations often downplay the full impact of the injury, resulting in offers that fall short of the claim’s actual value.

Why Initial Offers Are Typically Lower Than Case Value

Insurance companies make initial settlement offers with their own interests in mind. These offers are often lower than what the case is worth for several reasons:

Cost savings: By offering less upfront, they hope to reduce the overall payout.
Testing resolve: Insurers gauge whether the injured party is willing to push back or accept a quick resolution.
Limited information: Early offers may reflect incomplete data about the full scope of injuries or damages.
Negotiation strategy: Low initial offers give room for the insurance company to negotiate without exceeding their preferred payout range.

For these reasons, it’s common for initial offers to feel disappointing or insufficient. Refusing such offers often becomes a necessary step in pursuing fair compensation.

The Critical Decision of Accepting or Refusing an Offer

Accepting or refusing a settlement offer is one of the most significant decisions you’ll make during your personal injury case. An offer might seem tempting when bills are piling up, but rushing into an agreement can leave you without the resources you need for future expenses. Before deciding, it’s crucial to evaluate whether the offer truly reflects the extent of your damages and long-term needs.

Refusing an offer doesn’t mean you’ll never settle. It simply keeps the door open for further negotiations or legal action. The choice requires careful consideration, often with the guidance of an experienced attorney who can assess your case’s worth and advise you on the best course of action.

Sometimes, walking away from an initial offer is the best decision. If you’re unsure whether to accept, consider these reasons people often reject settlement offers.

Inadequate Compensation

Insurance companies may undervalue your claim by ignoring key aspects of your damages:

An offer that doesn’t fully cover your medical bills could leave you paying out of pocket for treatment related to the accident.
Some injuries require long-term care, surgeries, or physical therapy. A low settlement might not account for these needs.
Offers that fail to address lost wages or diminished earning capacity can overlook the economic impact of your injuries.
Non-economic damages are often subjective, leading insurers to undervalue their significance.

Incomplete Information

Rushing to settle before gathering all the necessary information can result in an unfair outcome:

Ongoing Treatment: If you’re still receiving medical care, the full extent of your injuries may not yet be clear.
Long-Term Effects: Some injuries, like traumatic brain injuries, may have consequences that don’t appear immediately.
Pending Evaluations: Expert opinions or additional evidence, like accident reconstructions, could significantly affect your case’s value.

What Happens After Refusing an Offer?

Declining a settlement offer doesn’t mean the process ends. Instead, it often opens the door to further negotiations or legal proceedings.

Continued Negotiations

Many personal injury claims involve multiple rounds of negotiations before reaching an agreement. Your attorney may counter the insurer’s offer with documentation supporting a higher amount. This can include:

Detailed Medical Records: Highlighting ongoing treatment or permanent impairments.
Economic Evidence: Pay stubs, tax returns, or expert assessments to illustrate lost earning capacity.
Non-Economic Losses: Testimonies or documentation about how the injury has impacted your life.

Negotiations may take time, but persistence often leads to better outcomes.

Escalating to Legal Action

If negotiations stall, filing a lawsuit becomes the next step. While this doesn’t mean your case will automatically go to trial, it applies pressure on the insurance company to re-evaluate its position. Legal proceedings involve:

Discovery: Both parties exchange evidence and conduct depositions.
Mediation: A neutral mediator helps facilitate settlement discussions.
Trial Preparation: If a resolution isn’t reached, your case moves toward trial.

Potential Outcomes

Refusing a settlement offer can lead to different outcomes, depending on how negotiations or litigation unfold.

Better Settlement Offer

Insurance companies may up their offer after realizing their initial one won’t cut it. Factors like additional evidence or even filing a lawsuit can push them to re-evaluate. Here’s why:

Timing Matters: Offers often improve as the trial dates approach – they know you’re serious.
Stronger Case: Thorough documentation and expert testimony make it harder for them to argue against your claim.

Court Trials

If the case goes to trial, a judge or jury decides the outcome. While trials can lead to higher awards, they also carry risks:

Costs: Litigation expenses can add up, though they’re deducted from the final settlement or verdict.
Uncertainty: Trials are unpredictable, and the outcome depends on the evidence presented and the jury’s interpretation.

Strategic Considerations

Your approach should always align with a carefully planned legal strategy. An experienced personal injury attorney can:

Assess the value of your claim using their knowledge of personal injury law.
Negotiate directly with insurance companies to protect your interests.
Advocate for you in court if litigation becomes necessary.

Timing Factors

Timing can significantly affect the success of your claim:

Statute of Limitations: Deadlines for filing lawsuits vary by state, so acting promptly protects your right to compensation. For instance, you typically have three years from the date of your injury in South Carolina to file a personal injury lawsuit in civil court. You and your attorney must keep this deadline in mind when negotiating a favorable settlement, as your lawyer may need to file suit for you before the statute of limitations expires. Your attorney can continue settlement negotiations up to the verdict.
Medical Treatment Completion: Resolving your case before finishing treatment could result in undervaluation. You want to ensure you reach maximum medical improvement (MMI) so that you don’t accept a settlement that doesn’t cover any future expenses you may incur due to your injuries.
Preserving Evidence: Gathering records, photos, and witness statements early strengthens your case.

Making Your Decision

Before deciding whether to accept or reject a settlement offer, ask yourself key questions and ensure you have the necessary documentation to make an informed choice.

Key Questions to Ask

Does the offer cover all your damages, including future expenses?
Are non-economic losses like pain and suffering adequately addressed?
What are the risks of pursuing further action?
What guidance does your attorney provide?

Documentation Needed

Having the right documentation ensures your claim is supported:

Medical Records: Include detailed notes from physicians about your injuries and treatment.
Expert Opinions: Economic or medical experts can provide valuable assessments.
Proof of Economic Loss: Pay stubs, invoices, or tax returns substantiate your financial losses.
Evidence of Non-Economic Damages: Photos, journals, or testimonies can illustrate how the injury has affected your life.

Contact a Personal Injury Attorney for Help Obtaining a Fair Settlement

Refusing a settlement offer may feel like a big risk, but with the right legal representation, it’s often a calculated step toward securing fair compensation. An attorney helps you weigh your options, assess risks, and build a strong case, whether through negotiation or litigation.

At Joye Law Firm, we understand how personal injuries disrupt lives and aim to guide you through the legal process with clarity and compassion. If you’re unsure about accepting a settlement, reach out for a free consultation. We’ll help you pursue the compensation you deserve while balancing the long-term impact of your decisions.