What Happens After You Reject a Settlement Offer?

Rejecting a settlement offer is a critical step in your personal injury claim. It shows that you are not willing to settle for less than you deserve and can lead to better compensation if handled strategically.

With over 20 years of experience representing personal injury victims, John Mattiacci is an experienced attorney known for securing fair settlements and maximizing compensation for his clients. His expertise ensures that the information in this guide is reliable, helping you handle the negotiation process with confidence.

In this guide, we’ll break down the common reasons for low settlement offers, what occurs after you reject a settlement, and how to strengthen your case for a fairer outcome.

 

Why Insurance Companies Offer Lowball Settlement Offers

Insurance companies often start with low offers as a way to minimize their financial exposure. They count on claimants being under pressure—financially or emotionally—to settle quickly. Here’s a closer look at why they use this tactic:

• Profit Motive: The primary goal of an insurance company is to protect its bottom line. Paying out large settlements can significantly impact their profits. Therefore, their initial offer, often referred to as the insurance company’s first offer, is frequently far less than the actual value of the claim, giving them room to negotiate while still saving money. They hope that you, the claimant, will accept this low amount without realizing the full value of your case.
• Testing Your Resolve: Offering a low settlement is also a psychological tactic. The insurance company wants to see if you’ll accept the first offer without negotiation. Many claimants, especially those unfamiliar with the process, may feel intimidated or pressured and may not understand that rejecting the initial offer is a common and often necessary step. By rejecting a lowball offer, you’re signaling that you’re aware of the actual value of your claim and are prepared to fight for it.
• Avoiding Future Costs: Insurers often make low initial offers because they know injuries may worsen over time or require long-term treatment. By settling early, they limit their liability and avoid having to cover future medical costs, ongoing treatment, or rehabilitation expenses. Quick settlements also bypass potential non-economic damages like pain and suffering or loss of enjoyment of life, which are harder to quantify but still significant in many personal injury claims.

By understanding these tactics, you can better anticipate what to expect and how to negotiate for a settlement that fully reflects your losses.

 

 

Understanding Insurance Settlement Offers

Definition of an Insurance Settlement Offer

An insurance settlement offer is a proposal made by an insurance company to resolve a claim for losses or damages. Essentially, it is a monetary payment offered to the claimant in exchange for releasing the insurance company from further liability related to the incident or claim. This offer is typically made after the insurance company has conducted an investigation to determine the extent of the damages. Understanding the nature of an insurance settlement offer is crucial, as it sets the stage for the negotiation process and helps you gauge whether the offer is fair and adequate.

Purpose of an Insurance Settlement Offer

The primary purpose of an insurance settlement offer is to resolve the claim quickly and efficiently while minimizing the financial liability of the insurance company. By offering a settlement, the insurance company aims to avoid the costs and uncertainties associated with litigation. For the claimant, accepting a settlement offer can provide a faster and more predictable resolution to the claim, rather than pursuing a personal injury lawsuit. However, it’s important to remember that the initial settlement offer is often lower than what you might be entitled to, as the insurance company seeks to protect its bottom line.

Importance of Carefully Reviewing the Offer

It is essential to carefully review an insurance settlement offer to ensure that it adequately covers all the losses and damages incurred. Claimants should be cautious when receiving a settlement offer, as the initial offer might not reflect the true value of the claim. An experienced personal injury lawyer can help assess the fairness of the offer and negotiate with the insurance company for a higher payout. This step is critical because accepting a low offer can leave you without sufficient funds to cover ongoing medical expenses, lost income, and other damages.

Negotiations Intensify

After rejecting the offer, negotiations typically continue. Insurers often expect claimants to reject initial offers, leaving room for further discussion. Your rejection signals that you’re serious about securing fair compensation, prompting the insurer and the insurance adjuster to possibly increase their offer. Patience is key during this back-and-forth process, as each round of negotiation can lead to a higher settlement amount.

Preparing a Strong Counteroffer

The next step is working with your personal injury attorney to submit a counteroffer that reflects the full value of your claim. This should include evidence such as medical bills, lost wages, future treatment costs, and non-economic damages like pain and suffering. Comprehensive documentation—medical records, expert testimony, and economic assessments—helps justify your higher demand and puts pressure on the insurer to raise their offer or face litigation.

Additional Evidence Collection

Rejecting an offer may prompt the insurer to request further evidence. This gives you an opportunity to strengthen your case with additional medical opinions, economic forecasts, or documentation of ongoing treatment. Expert testimony, especially regarding future care or disability, can add significant weight to your claim and make it harder for the insurer to justify a lowball settlement offer.

Personal Injury Lawsuit Isn’t Immediate

Rejecting an offer doesn’t mean you’re headed straight to court. Most personal injury cases are settled through ongoing negotiations aimed at achieving a reasonable settlement. Filing a lawsuit is generally a last resort, as trials are costly and time-consuming for both parties, and insurers typically prefer to avoid them unless they have a strong defense.

 

Key Benefits of Rejecting a Low Settlement Offer

Rejecting a low settlement offer isn’t just about securing a higher dollar amount—it’s about ensuring your settlement reflects the full extent of your damages. Here are the key benefits:

• Accounting for Long-Term Medical Costs: Injuries can evolve over time, and what may seem like a manageable issue today could lead to long-term health problems. By rejecting a quick, low offer, you allow time to understand the full scope of your medical needs. For example, a back injury might require surgery or physical therapy months after the initial diagnosis. If you accept an offer too soon, you may not have the funds to cover these future costs, leaving you with financial strain later on.
• Non-Economic Damages: Settlements don’t just cover medical bills—they should also account for your pain and suffering, emotional distress, and loss of enjoyment of life. These non-economic damages are harder to quantify, but they are equally important to your overall recovery. Insurers may downplay these factors in their initial offer, but rejecting and negotiating gives you the chance to ensure they are included in the final settlement.
• Leverage and Pressure: By rejecting an offer, you demonstrate that you are willing to negotiate or even take the case to court if necessary. This can put pressure on the insurance company to settle. Trials are expensive and time-consuming, and most insurers would prefer to avoid them. They know that if you reject their offer and continue negotiating, there’s a higher chance they’ll need to increase their payout to avoid the risks and costs of litigation.

 

Why You Should Delay Accepting a Settlement Offer

Delaying acceptance of a settlement can often work in your favor, particularly if you are still undergoing medical treatment or haven’t reached maximum medical improvement (MMI). Here’s why waiting can benefit your claim:

• Understanding the Full Extent of Your Injuries: Some injuries don’t manifest fully right away. For instance, traumatic brain injuries or internal injuries might not be immediately apparent but can have long-term effects. By delaying a settlement, you allow time for your doctors to assess the full impact of your injuries, including any potential complications or long-term treatment needs. Settling too early could leave you without sufficient funds to cover these future medical expenses.
• Increased Settlement Amount: Insurance companies often push for quick settlements to limit their liability. However, delaying your decision gives you the opportunity to gather more evidence, build a stronger case, and negotiate from a position of strength. The longer the insurer has to wait, the more likely they are to increase their offer to avoid prolonged negotiations or a potential lawsuit.
• Pressure on Insurers to Settle Fairly: Delaying can also put pressure on the insurer. The longer negotiations continue, the more time and resources they have to invest in the case. At a certain point, it becomes more cost-effective for them to settle rather than risk a prolonged legal battle, especially if you have a strong case supported by solid evidence.

 

Steps to Take After Rejecting a Settlement Offer

After you reject an insurance settlement, you’ll want to follow these important steps to strengthen your case and move negotiations forward:

1. Consult Your Lawyer: Your attorney will help you evaluate the offer, explain why it was too low, and outline the next steps. This consultation is critical for developing a strategy that increases your chances of securing a fair settlement. They will help you determine the best approach for submitting a counteroffer.
2. Prepare a Counteroffer: Work closely with your lawyer to submit a detailed counteroffer that reflects the true value of your claim. This counteroffer should be backed by evidence such as updated medical records, expert testimony on the need for future care, and economic assessments of your lost wages. Your attorney may also include a breakdown of non-economic damages like pain and suffering.
3. Gather More Evidence: If the insurance company requests additional evidence or if you feel your case could be strengthened, it’s essential to gather more documentation. This could include ongoing medical evaluations, testimonies from specialists, or an economic forecast that details the financial impact of your injury over time. The stronger your evidence, the more leverage you’ll have in negotiations.
4. Consider Mediation: If negotiations reach a stalemate, mediation may be an option. This is an informal process where both parties meet with a neutral third-party mediator who facilitates the discussions. Mediation can be a faster and less costly alternative to litigation, and it often helps parties reach a fair settlement without the need for a trial.

 

Comparing Settlement vs. Trial Outcomes

When deciding whether to accept a settlement or pursue a trial, it’s important to understand the key differences between the two. Both options have their own advantages and drawbacks, and the best choice depends on your specific circumstances, including the strength of your case, the timeline you’re working with, and your comfort level with the uncertainty of a trial. Below is a comparison of what you can typically expect from settling versus going to trial:

 

Aspect	Settlement Offer	Trial
Time Frame	Typically resolved in weeks or months	Can take several months to years
Legal Costs	Lower, due to quicker resolution	Higher, especially if the case goes to trial
Control Over Outcome	You maintain more control in negotiations	The final decision is in the hands of a judge or jury
Stress Level	Less stressful, with quicker resolution	High stress due to prolonged litigation
Compensation Amount	Generally lower but resolved faster	Potential for higher payout, but no guarantees
Confidentiality	Private settlement	Court proceedings are public

 

Each option carries different risks and benefits, and understanding these differences can help you make a more informed decision as you weigh your options. Your attorney can guide you through this process, but it’s crucial to keep in mind that a settlement may offer a faster resolution, while a trial could result in higher compensation, albeit with more uncertainty.

 

 

What Happens if Negotiations Fail?

If negotiations stall and a fair settlement cannot be reached, your attorney may recommend filing a lawsuit. Although the majority of personal injury cases are resolved before going to court, it’s essential to prepare for this possibility. Here’s what happens if your case moves toward litigation:

• Filing a Lawsuit: Once a lawsuit is filed, both sides enter the discovery phase, where they gather and exchange evidence. This can include depositions, interrogatories, and document requests. During this phase, your attorney will continue building your case with additional evidence and expert testimony to strengthen your position.
• Pre-Trial Motions and Mediation: Even after a lawsuit is filed, settlement negotiations may continue. In fact, many cases settle during or after the discovery phase. Your attorney may file pre-trial motions to strengthen your case, and mediation may still be an option to avoid going to court.
• Trial: If the case proceeds to trial, both sides will present their evidence before a judge or jury, who will decide the outcome. Trials can be unpredictable, and while a trial may result in a higher payout than a settlement, there’s also a risk of receiving nothing if the verdict doesn’t go in your favor.

Alternative Dispute Resolution Methods

In addition to accepting or rejecting a settlement offer, claimants may also consider alternative dispute resolution methods, such as mediation and arbitration. These methods can provide a middle ground between accepting a potentially low offer and going through a lengthy court process.

Mediation and Arbitration Benefits and Drawbacks

Mediation and arbitration are alternative dispute resolution methods that can help resolve disputes between claimants and insurance companies. Mediation involves a neutral third-party facilitator who helps the parties reach a mutually acceptable agreement. Arbitration involves a neutral third-party decision-maker who makes a binding decision.

Benefits of Mediation and Arbitration:

• Faster Resolution: Mediation and arbitration can resolve disputes more quickly than litigation, often within weeks or months.
• Cost-Effective: These methods can be less expensive than going to court, saving both parties money on legal fees.
• Less Formal: The processes are generally less formal and more flexible than court proceedings, which can reduce stress and make the experience more manageable.

Drawbacks of Mediation and Arbitration:

• Limited Control: Claimants may have limited control over the outcome, especially in arbitration where the decision is binding.
• Binding Decision: Arbitration decisions are final and binding, meaning there is little to no opportunity for appeal.
• Limited Discovery: These methods may not allow for the same level of evidence gathering as litigation, which can impact the strength of your case.

It is essential to carefully consider the benefits and drawbacks of mediation and arbitration before deciding whether to pursue these alternative dispute resolution methods. An experienced personal injury lawyer can provide guidance and support throughout the process, helping you make an informed decision that aligns with your best interests.

 

How an Experienced Personal Injury Lawyer at Mattiacci Injury Law Can Help

We understand that rejecting a settlement offer is a significant step in your pursuit of fair compensation. With years of experience handling personal injury claims, we are committed to helping our clients navigate the negotiation process and fight for the compensation they deserve. Whether through continued negotiations or taking your case to court, our attorneys will be by your side every step of the way.

Don’t let the insurance companies pressure you into settling for less. Contact Mattiacci Injury Law today for a free no-obligation consultation. Our team will review your case, explain your options, and fight to ensure you receive the full compensation you’re entitled to.