If you have been in a catastrophic accident, you likely have medical bills piling up in addition to your family’s living expenses. Even worse, you have little to no income while you recover, and your savings are rapidly decreasing.
Insurance companies know you’re in a desperate situation and want to get money into your hands as soon as possible to help you out. They make a settlement offer, which sounds good, and you’re almost ready to accept it. Still, you may want to reconsider.
Insurance companies are in business to make money
Auto insurance is a profitable business, with the biggest companies making net profits of over $100 billion annually. They make their money through policy premiums, investing those funds, and keeping expenses low.
To protect its bottom line, an insurance company’s initial settlement offer is typically calculated to close the claim quickly and economically. They may look at medical expenses, lost wages, property damage and liability.
However, there are a few reasons why you shouldn’t accept their first offer.
- You may not yet know the full extent of your injuries. Some take time to manifest fully. You may also have complications that require surgery, or you may not be healing as quickly as expected. Accepting an offer before having a complete picture of your medical needs could leave you with insufficient funds to cover expenses.
- Future losses are another factor to consider. If your injuries affect your ability to work or require long-term care, these should be factored into your settlement.
- Insurance companies often undervalue non-economic damages such as pain, suffering and emotional distress.
When you are dealing with the pain and stress that accompanies a severe accident, you may not have the fortitude needed to negotiate with an insurance company. Instead, it’s better to discuss your situation with someone who can negotiate on your behalf and get the settlement to meet your needs.