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Should I accept the insurance company’s settlement offer?

Should I accept the settlement my insurance company offers me?

Before you accept a settlement offer, you must fully understand the long-term impact your injuries will have on your life. Will your injuries worsen over time? Will you require mobility aids? Will you have to change jobs? Discussing questions like these with a lawyer can help you determine if the amount your insurer is offering is fair compensation for all your current and future losses. Once you accept a settlement offer, you will likely have to sign a release of liability. Doing so takes the insurance company or the at-fault party off the hook for anything that might happen in the future, including if your injury symptoms worsen.

Partner Angus Smith discusses things you should consider before accepting a settlement offer.

Remember, insurance adjusters negotiate for a living. They are practiced in negotiating with people to accept low settlements. Having an experienced personal injury lawyer by your side can even out the playing field to ensure you receive fair compensation.


What is a low settlement offer?

Low settlement offers can happen for a variety of reasons, which is why it is important to properly assess your situation before you respond to any offers. Perhaps the insurance adjuster doesn’t have all the information regarding your injuries or is missing pertinent files that could support your claim. A lawyer can help by assessing why there was a discrepancy or securing the needed information.

Often the initial offer is a starting point for negotiations. While the adjuster may try to scare you by telling you that it is close to the maximum settlement amount they are authorized to give, that is very likely not the case. A low-ball offer may be an attempt to take advantage of any financial struggles that you may be experiencing because of your injury. Once you accept an offer, you can’t come back to them later for more money. Insurance adjusters know this. You have the right to reject a settlement offer if you feel the offer is truly not fair or representative of your injuries.

Countering a low settlement offer

The best way to refuse and counter an offer is through a personal injury lawyer. An experienced lawyer will be able to analyze your claim and put forth a counter-offer that you deserve given your circumstances.

Tactics used by insurance companies to delay, reduce, or minimize settlement amounts

The insurance claims process is not easy to understand, especially if you have never been through the process before. Most people don’t know what they need to say, how it should be said, how to respond to questions properly, or even the steps to take when dealing with an insurance company.

It is important to remember that there is a conflict of interest that is inherent to this process. When discussing a settlement with an insurance adjuster, you represent an expense to the company. Insurance companies make money by receiving more money in insurance premiums throughout the year than they pay out in claims. So, by going to an insurance company to discuss a settlement for a car accident, for example, in which their insured was at fault, you have become an expense to the insurance company.

An insurance adjuster’s annual performance is often at least partially evaluated based on the amount of money they pay out on claims each year. Put another way, their annual performance may be partially evaluated based on how much money they “save” the company. Adjusters are often incentivized to reduce or minimize their payouts on each claim. To do this, insurance adjusters may use some of the following tactics to delay, reduce, or minimize payments.

Offering a quick settlement

While it may seem like a blessing to hear back from an insurance adjuster quickly after a claim has been filed, there is often an ulterior motive. Early in the claim process, you are likely still dealing with doctor or treatment provider(s) appointments to help diagnose or treat your injuries. You may not have even thought about approaching a law firm to seek legal advice. Insurers know this and may contact you early, hoping you will accept an offer that does not represent the fair value of your claim. There are several possible motives here, but more often, insurance adjusters may be trying to close the file as quickly as they can, for as little money as possible.

Although not every quick settlement offer is unreasonable, the quicker the offer, the more likely it is that the amount does not represent the fair or potential value of your claim. It is important to contact a lawyer to understand the fair value of your claim before agreeing to a settlement.

Signing medical authorizations

Throughout the claims process, there will likely be documents you are asked to sign. Documents from your lawyer, your insurance company, and from the insurer of the at-fault party. However, mixed in among these documents could be a medical authorization form which gives the insurance company the right to collect your personal or medical information. This can be a deceitful tactic used by an insurer to obtain a blanket authorization to collect your private information.

If you sign a blanket medical authorization, you are giving the insurance company authority to collect and review your medical files in a way that goes well beyond the scope of what is appropriately relevant to the accident and your injuries. Insurers will often do this to uncover more information about your medical history and use it against you to reduce your overall settlement.

It is typically a best practice to avoid signing any such documents without reviewing them with an experienced personal injury lawyer first.

Asking for a recorded statement

While being asked to give a recorded statement may seem harmless and just a standard part of an insurance claim, it often has ulterior motives behind it. These statements are seldom meant to benefit the victim, as insurance adjusters will often try to hold you to specific information in your statement. This information may be used against you later to attempt to show you were either lying, or otherwise providing inaccurate information at some point in the process.

Your best course of action is to decline giving any recorded statement (either written or verbal) until you have spoken to an experienced personal injury lawyer. This can help you avoid problems down the road.

Delaying responses or payment

Insurance companies have significant financial resources. It is very easy for them to delay a response, delay a counteroffer, or even delay a potential payment. If this is done deliberately, the goal is typically to demoralize the victim, increase their overall stress levels and make them desperate for money. This can lead to an injured person accepting an unfair offer. Therefore, it is important to contact an experienced personal injury lawyer who offers services on a contingency fee basis as soon as possible. Not only do insurance companies tend to move faster and with greater conscience when lawyers are involved, but a contingency fee means you do not need to worry about the legal fees until after you have reached a settlement. The lawyers of MacGillivray Law work on a contingency fee basis. We charge a competitive standard percentage of the final settlement to cover our legal services.

Advising you to not seek legal help

Finally, an insurance adjuster may tell you that legal assistance is not necessary. While this may be accompanied by kind words and seem genuine, it is often done to reduce or minimize the amount paid out for a settlement.

Adjusters understand the claims process. They know when an experienced personal injury lawyer becomes involved in a claim, an injured person’s ability to achieve a fair settlement increases dramatically. Adjusters also know that an experienced personal injury lawyer will carefully consider the evidence and the injured person’s entitlement to all applicable types of financial compensation (some of which could be missed without legal help).

An insurance adjuster may try to persuade you to handle your own claim, pointing to the need to pay legal fees as a deterrent. However, what they will not tell you is that a lawyer can often speed up the process. Additionally, it can lead to a more fair and appropriate settlement than you would have received if a lawyer had not been involved. A personal injury lawyer will work to increase the settlement amount, so you receive more money for your claim even after legal fees are paid.

At the end of the day, it is important you receive a settlement that represents the fair value of your claim, based on the facts and evidence and the applicable law. Retaining an experienced personal injury lawyer is one of the most important steps you can take to protect your own interests and make that happen.


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MacGillivray Law is a personal injury law firm with offices in Nova Scotia, New Brunswick, and Newfoundland and Labrador. We serve clients all across Canada.

If you cannot travel to one of our offices, we will accommodate your circumstances and travel needs. We can provide a consultation by phone, Zoom, or FaceTime, or travel to meet you in your home when required.

If you would like to learn your legal options at no obligation, contact us today to set up a free consultation.

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