Car crashes can cause financial issues in a couple of different ways. Obviously, you have to worry about the cost involved in fixing your car. If you or someone in your vehicle got hurt, you will also have to think about medical care and the cost associated with those injuries. Also, if you get hurt or you have a spouse or children who get hurt, you may have to take an extended leave of absence from your work, which can mean losing out on the income that you need to support your family.
You will probably need the money from an insurance claim to cover your crash expenses and cost of living expenses. Many times, the automobile insurance policy held by the driver responsible for the crash will be the one covering the costs. However, your policy may also pick up some of the bills if the other driver didn’t have insurance or didn’t have good insurance and you had to use your uninsured or underinsured driver coverage.
Regardless of which driver’s insurance company is the one paying the claim, you should probably be skeptical about the first settlement offer that you receive.
Low settlement offers are a common cost-saving strategy for insurance companies
When people file big claims against insurance policies, the company that wrote the policy loses money. The bigger the claim, the more significant the negative financial impact of a single crash.
Insurance providers are often eager to limit their costs, and settlements are an effective way for them to do so. Typically, the paperwork that you sign when you accept a settlement permanently limits your right to seek compensation in the future. The insurance company will try to offer just enough money to incentivize you to sign without paying out as much as they probably should.
Sometimes, the offer is so low that you’ll go into debt and have serious future hardship. Such unfairly low settlement offers are a common form of bad faith insurance. Bad faith insurance is the term used when companies violate their obligation to policyholders and to people who get hurt by their policyholders.
How can you tell if a settlement amount is appropriate?
It can be difficult to evaluate the fairness of the settlement offer. You need to remember when you first see the check that the amount included should, theoretically, cover all of your current losses and your future expenses. That means medical costs, damage to your car and lost wages.
You won’t be able to make a second claim for any of those expenses in the future once you agree to the settlement on offer. Adding up all of your current expenses and trying to estimate your likely future expenses can help you determine if the offer is fair or if you should reject it and counter with a higher figure. You may also need help in responding to or negotiating with the insurance company to get the settlement you deserve.