5 Reasons to Not Settle Claims with Insurance Companies

Personal injury cases can range from car accidents to dog bites to wrongful death, each with its own complexities and challenges. After being hurt in a car accident, for example, an insurance company will contact you about car accident settlements. You may be facing extensive medical treatment, vehicle repairs, and the hassle of working with insurance companies to determine fault and get a rental car. 

In this situation, the idea of settling quickly with the insurance company can be tempting. You may want immediate compensation to cover your expenses, or may just want to move on from the incident. 

However, settling quickly might not be in your best interest. Insurance companies are in the business of minimizing payouts, and accepting an early offer could mean leaving significant compensation on the table. Knowing how to negotiate a settlement with an insurance company is crucial to maximize your claim. 

Let’s explore 5 reasons why you should think twice before accepting insurance settlements, and what to do instead for your long-term personal and financial security.

Reason #1: Insurance Companies Aim to Minimize Payouts

Insurance companies are businesses, and like any business, their primary goal is to maximize profits. One way they achieve this is by minimizing the amount they pay out in claims. Insurance adjusters are trained to reduce claim amounts, often using tactics that may seem fair on the surface but are designed to benefit the company.

For example, adjusters might pressure you into accepting a quick settlement, playing on your need for immediate financial relief. They may also downplay the severity of your injuries or suggest that you were partially at fault, all to justify a lower payout. 

Additionally, insurance adjusters may delay processing your claim in hopes that you’ll become desperate and accept a lower offer. They might also send you to a medical examiner who works closely with the insurance company, leading to a biased assessment of your injuries. These tactics can make you feel as though you have no choice but to accept the offer.

It’s important to note that initial insurance settlement offers are often much lower than what you actually deserve. In many cases that go to court, final settlement amounts are substantially higher. By accepting an early offer, you might be missing out on the full compensation you’re entitled to.

Reason #2: Lasting Injuries and Future Expenses 

When you’re in the aftermath of an accident, your first priority should be your health. Keep in mind injuries sustained can sometimes have delayed symptoms, meaning you might not know the full extent of your injuries for weeks or even months after the incident. Settling a claim with insurance before all your symptoms manifest can leave you without the necessary resources to address ongoing medical needs, like in these scenarios. 

• Scenario 1: You accept a quick settlement after a car accident, only to discover months later that you need surgery for a herniated disc. The initial car accident settlement didn’t cover the surgery costs, leaving you to pay out of pocket for medical bills that far exceed the settlement amount.
• Scenario 2: You are bitten by a dog and choose to accept the dog bites insurance claims settlement. Unfortunately, your wound gets a serious infection. The quick settlement you accepted barely covers the initial wound care, leaving you responsible for the additional medical bills for your hospital visit.
• Scenario 3: You slip and fall due to a company’s negligence and hit your head. Head trauma can be particularly deceptive, with symptoms like memory loss, dizziness, or difficulty concentrating appearing days or even weeks after the accident. The long-term impact was not immediately apparent, so you accepted a quick settlement. Later, you experience chronic pain and need frequent visits to a specialty doctor — far outside your settled compensation.

Whether it’s car accidents, dog bites, slip and falls, or another type of personal injury, settling a claim quickly with an insurance company often requires signing a settlement agreement. This typically includes a waiver of your right to pursue any further compensation related to the accident. This means that if you discover later on that your injuries are more severe than initially thought, you won’t be able to seek additional compensation for medical expenses, lost wages, or pain and suffering. 

This is why thorough medical evaluations and follow-up treatments by an unbiased medical professional are crucial before considering any insurance settlement offer. For instance, if your injuries require ongoing physical therapy or result in chronic pain, the associated costs could continue for years. Without considering these long-term financial impacts, you might settle for an amount that barely covers your immediate medical bills, leaving you financially strained in the future.

Reason #3: Complexity of Insurance Policies

Insurance policies are often filled with complex legal jargon and fine print that can be difficult to understand without specific education, especially if you’re under a time crunch. Misunderstanding these details can lead to accepting an insurance settlement that doesn’t fully cover your losses or waiving rights that you didn’t realize you had.

Common pitfalls include not fully understanding the extent of coverage, overlooking exclusions, or misinterpreting the implications of specific clauses. For example, some policies may have clauses that limit the amount of compensation you can receive based on certain conditions or exclude certain types of damages altogether.

This is where hiring a personal injury attorney can be incredibly beneficial. A skilled attorney can navigate and interpret the intricacies of your insurance policy, ensuring that you’re aware of all potential benefits and avoiding common mistakes.

Reason #4: Potential for a Higher Settlement with a Personal Injury Attorney

There’s ample evidence to show that individuals who seek legal representation often receive higher settlements than those who don’t. Attorneys who specialize in personal injury cases understand the tactics used by insurance companies and know how to negotiate insurance claims effectively on your behalf.

A personal injury attorney doesn’t just negotiate on your behalf — they thoroughly investigate the accident, gather evidence, consult with medical experts, and assess the full scope of your damages. This comprehensive approach ensures that all potential future expenses, like ongoing medical care or lost earning capacity, are factored into the settlement demand. Understanding how to negotiate an insurance settlement is critical for achieving fair compensation.

For example, an experienced personal injury attorney can accurately assess the value of your claim, taking into account both current and future expenses. They can also advocate for you in court, if necessary, where settlements tend to be higher. Typically, individuals receive significantly more compensation with legal help than what they were initially offered by the insurance company.

Reason #5: Impact on Future Insurance Claims

Settling a claim with an insurance company doesn’t just affect your current situation — it can also have long-term implications. Once you settle, you may find it more difficult to make future claims, especially if the settlement involved any kind of admission of fault or waiver of future claims. (Again, this can happen if you get caught agreeing to something without realizing it because of all the insurance policy jargon.)

Additionally, settling a claim with insurance might lead to higher premiums or difficulties in obtaining coverage in the future, especially if the settlement involved an admission of partial fault. This could affect your ability to recover compensation in later accidents or result in additional costs over time.

Before settling, it’s important to consider these future scenarios and how they might affect your financial well-being. Consulting with a personal injury attorney can help you understand the broader implications of an insurance settlement and ensure you make an informed decision.

Key Takeaways

While settling quickly with an insurance company might seem like the easiest option, it’s rarely the best one. Insurance companies are focused on minimizing payouts, and by settling early, you might miss out on the compensation you truly deserve.

To make an informed decision whether to accept a settlement with the insurance company, you should be sure to consider the following:

• The amount of money you’ll receive from the insurance company settlement vs. with the help of a personal injury attorney
• Your long-term health and potential chronic injuries that can lead to future medical costs 
• The complexities of the insurance policies and what you’re agreeing to when you sign the insurance settlement
• How agreeing to this insurance settlement will affect future claims and your personal insurance policies

If you’re facing a personal injury claim, don’t rush into a settlement. Take the time to evaluate your situation and explore all your options. As a personal injury attorney in Boise, my mission is to be your advocate and help you receive the compensation you deserve from insurance companies. For more information on insurance settlements in Idaho or to discuss your case, book a free consultation with me today.