After a car accident, the insurance company for the person who was at fault would probably make you a settlement offer. This offer may be substantially less than the compensation your auto accident lawyer has advised you to anticipate. Continue reading to find out what goes into a settlement offer, and if you want a free legal consultation, call Law Offices of Fernando D. Vargas at 909-982-0707.
Why offers are often so low
Because there is no single approach to calculating damages in a car accident injury claim. Instead, insurance companies estimate losses using their own, unique algorithms that are created to pay out the least amount of money feasible in any particular circumstance. It is impossible to understand why insurance companies chose a particular amount to give because they do not disclose their calculations. However, we may get a good idea of their thought process by looking at the elements that follow.
Damages
You may be eligible to several different types of compensation following an automobile accident, including:
- Medical costs
- Lost income
- Potential earnings lost
- Loss of property
- Pain and suffering
The insurance provider will consider each of these types of damages when submitting a settlement proposal. However, they can have a different opinion than you about how much it should cost to fix your car or how much money should be awarded to you as compensation for your suffering. In truth, a lot of first offers of compensation do not take pain and suffering into account.
Setting a reserve
As soon as you report an accident to your insurance carrier, they will make an attempt to estimate the amount they will have to pay out on your claim. This estimate is referred to as the reserve. The insurance company gains from establishing the reserve early in the case because it enables them to value the case before you know how big your total medical costs will be, if you will have chronic pain or other persistent ailments, and how much agony and suffering you will endure.
It is very challenging to persuade the insurance company to take into account further damages that could increase the reserve after the reserve has been set.
Limitations of the policy
No matter how high your medical expenses are or how much money you receive in compensation, an insurance company will not pay out more than the policy maximum. Therefore, your settlement offer will be limited to $50,000 if your losses total $100,000 but the at-fault party’s insurance coverage only pays out $50,000.
If your settlement offer is insufficient, what should you do?
You should speak with a knowledgeable auto accident attorney like Law Offices of Fernando D. Vargas right away if you believe a settlement offer is unfairly low. We can negotiate with the insurance company to get them to make an offer that is fairer and more reasonable to cover your current and future damages. If negotiations do not work, we can file a lawsuit against them. If your damages are greater than the policy’s cap, we can look into the possibility of suing the responsible party directly to recover additional damages.
