Why You Should Always Reject the First Insurance Offer

When the insurance company presents with an initial settlement, they are likely not paying you everything to which you may be entitled. Taking the time to negotiate can help you maximize your claim.

Insurance Companies Try to Lowball You

Insurance companies are businesses that are out to make a profit. As such, they are trying to pay you the exact amount that it would take to get you to accept their offer and not a penny more. Their first offer to you is designed to give them enough room to maneuver up to the point where they want to settle the claim. There is likely some room built in so that their bottom line is not hurt if they have to increase their offer.

Litigation Costs Money

Insurance companies know that it will cost them money to go to court. While they will litigate claims if they have to, they will at least make an effort to try to avoid it. Litigating against injury lawyers will always present some risk for the insurance company and they will take steps to try to manage that risk. You should at least test the insurance company’s resolve to try to avoid litigation by making a counteroffer. It does not even have to be that much higher than the insurance company’s initial offer, but just an attempt to get some additional money with your claim.

The Settlement Offer Almost Always Comes Quickly

The insurance company may be making you a quick settlement offer to try to put the matter to bed. They may not have put the time in to fully consider all the issues that are related to your claim. However, you and your lawyer have likely devoted far more time to the matter since it is one claim versus the hundreds with which an insurance company is dealing. Rejecting the first offer is a way to have a more detailed conversation with the insurance company that can bring to their attention to issues that they may be overlooking.