What Happens When You Reject an Insurance Settlement Offer?

If you are considering formally rejecting an insurance settlement offer after sustaining a personal injury, it is important to understand the consequences and the process that will follow. Insurance companies often try to lowball you or underestimate your damages with their first settlement offer. Do not settle for less than what you deserve.

By rejecting an insurance settlement offer, you are not losing out on your ability to claim compensation, but instead, entering into the negotiation phase. Working with a personal injury lawyer from Chubb Law can help you put together a thorough counteroffer, showing justification for why the initial settlement amount was insufficient. 

How to Negotiate a Car Accident Settlement Without a Lawyer

Before signing away your right to full compensation, you need to understand how much your claim could be worth. Working with a personal injury attorney can help you put together a comprehensive estimate for all of your losses associated with your accident and resulting injury. If the initial insurance settlement offer does not fully cover your losses, you should not sign anything, but instead attempt to negotiate for a more complete settlement.

By declining the offer, you are essentially informing the insurer that their valuation of your damages does not fully align with the reality of the situation. Your rejection letter should not just be a message saying “no”. You need to put together a counteroffer, complete with justification and evidence of why the initial amount was not enough to cover your losses. This should include documentation such as receipts, invoices, and even a description of your pain and suffering.

Once you reject their offer and send in your counterproposal, the ball is back in their court. This can lead to a waiting period while the insurance adjuster re-evaluates the amount they are allowed to pay out to you based on how strong your evidence is. When working with an experienced personal injury lawyer, results from settlements can be thousands or even hundreds of thousands more than the initial offer.

What Happens if You Reject a Settlement Offer

After declining an insurance settlement offer, the negotiation phase begins. Your attorney can help you submit a formal counter, backed up by documentation that supports your assertion that you require more compensation than their proposal. After a thorough review, the insurance adjuster may request further evidence or even escalate your claim to a different department. Your attorney may work with experts, such as medical professionals in specialized fields.

If negotiations reach a stalemate, your attorney may need to file a formal lawsuit. This will trigger the discovery phase, which involves depositions, subpoenaing records, and other formal evidence-gathering. This process forces the insurance company to take your claim more seriously, as going to trial is a costly and time-consuming process for them. Even if your case ends up requiring litigation, there is a high probability that the insurance company will settle before reaching a jury.

Rejecting an insurance settlement offer does not come without risk. While the goal is to secure more money, there is no guarantee that a higher payout will be offered, even if you move to trial. A rejection can also mean waiting months or even years for a payout, which can be a significant burden if you are facing immediate financial hardship from mounting medical bills.

Reasons You Should Consider Rejecting an Insurance Settlement

There are multiple reasons that you should consider rejecting your initial insurance settlement claim. Speaking with a personal injury lawyer is the best way to get advice on your specific situation. Here are some reasons we often advise our clients to continue in negotiations:

• Offer is Not Enough: Insurance companies are businesses, and their primary goal is to minimize the amount they pay out. If your settlement undervalues your claim and does not fully cover your medical bills, repair estimates, and lost wages, we may encourage you to continue negotiations and supply the insurance adjuster with further evidence of your losses.
• Undervalued Pain and Suffering: Insurance settlements frequently undervalue non-economic damages, which are also called pain and suffering. These losses include the impact caused by the accident that is not easily quantifiable, such as physical pain, loss of enjoyment in life, and emotional distress.
• Incomplete Maximum Medical Improvement: The Maximum Medical Improvement (MMI) is the point at which your condition has been stabilized, and no further dramatic improvement is expected. If you settle while you are still undergoing medical treatment, there is no clear way of knowing if you are settling for less than what your future medical treatments may cost you.
• Future Lost Earning Ability: An initial settlement might account for the wages you lost due to time off work for recovery, but may miss the future losses you could sustain if your injury limits you. If you are unable to return to the same job or limit the hours you can work in the future, your settlement should account for this.

Before directly rejecting an offer, you may request a written breakdown of how the adjuster reached their settlement amount. If you believe you have further losses that are not accounted for, speak with your legal team about how you can show evidence of this to your adjuster.

Should I Accept an Insurance Settlement Offer?

There are a lot of factors that go into determining whether you should accept or reject an insurance settlement offer. The constraints of offer expiration dates and the statute of limitations are vital to consider because once a deadline passes or a document is signed, your legal leverage usually vanishes.

Offer Expiration Dates

Settlement offers typically come with a time limit or an expiration date. Time limits are typically used both as a tactic to keep the process moving along and also to add psychological pressure. Insurance adjusters will want to force you to make a quick decision before consulting a lawyer or fully understanding the extent of your injuries.

Deadlines may be set as soon as 48 hours, creating that sense of urgency to sign. In reality, you typically can request a deadline extension or renegotiation, but letting this formal deadline pass without a reply can sometimes be interpreted as a rejection. If you need more time to review an offer, request a written extension. A verbal agreement to extend may not hold weight in court, so always get this in writing.

The Statute of Limitations

Offer expiration dates are set by the insurance company, whereas the Statute of Limitations is the ultimate deadline set by state law. In Florida, you generally have two years from the date of the accident or discovery of the injury to settle a claim or file a formal lawsuit. If you are still negotiating after that two-year deadline has passed, the insurance company has no legal obligation to pay you.

Insurance companies often use delay tactics to intentionally drag out negotiations to get as close to this date as possible. Working with a personal injury lawyer can help you put the pressure on the insurance company before your time and leverage runs out.

The Finality of Accepting an Offer

When you accept an offer, you are signing a legally binding contract that forever releases the insurer and at-fault party from further liability. This means that when you accept the offer, you are releasing all claims against them in exchange for your settlement amount. If you suddenly realize a month after accepting the offer that you need another $50,000 surgery related to your accident, you cannot go back and ask for more money.

Understanding the deadlines and leverage against the insurance company is vital to knowing whether you should continue to negotiate or accept. As always, speaking directly with your personal injury lawyer can help you go through the pros and cons of accepting or rejecting an offer. Never sign a release or accept an offer until you know that you have accounted for every possible known or potential loss.

Can an Insurance Company Rescind a Settlement Offer?

The back-and-forth of insurance negotiations can be time-consuming. It could be tempting to worry about how many times you can reject a settlement offer without losing your right to compensation. The fact is, you legally have the right to say no as many times as you wish until you reach an agreement you find acceptable, or the case proceeds to trial for a final judgment from the court.

Negotiations are rarely short, but working with an experienced attorney may help you leverage evidence and the threat of taking the case to trial to speed up the process. There is always the risk that the insurance company will refuse to continue to negotiate, forcing you to go to trial. But ultimately, you hold the power to reject any offer.

Potential Risks When Rejecting an Insurance Settlement Offer

While rejecting a lowball offer is often a wise choice, it is not without a distinct set of risks. Litigation can take time, and if you need money for impending medical bills, a rejection could delay that relief. 

There is also a chance that the jury could award you less than the original settlement offer or deny you any award at all. If you are looking to increase your settlement value, consulting with an experienced attorney can help you determine the right path forward. 

Filing a Lawsuit After Rejecting an Insurance Offer

If negotiations with insurance fail to cover your losses, the next step is to file a formal complaint in your local civil court. This move will take your discussion from the Claims Department to working with the Legal Department of the insurance company. Litigation should not be taken lightly, as it can delay the receipt of compensation and pose additional risks. However, litigation can also expand your ability to receive comprehensive compensation for your damages.

After filing litigation, the discovery process will begin. Both sides will exchange documentation, take sworn statements, and hire expert witnesses. Often, the insurance company will settle during some part of this process, not wanting to risk further expense and time-consuming litigation. As the trial date approaches, legal costs for the insurance company start to add up, making them more likely to offer a fair settlement to avoid the risk of a jury verdict.

How Legal Fees Can Work in Your Favor

Insurance companies have internal legal teams that require salaries or will need to hire outside legal support on an hourly basis. This can work in your favor by giving them more leverage to settle with you for your demanded amount, since every moment you take up their time is costing them money. You may also wonder how legal fees can affect your bottom line, especially considering the other rising costs and lost wages you are facing at this time.

In the area of personal injury law, it is common for law firms to work on a contingency fee basis. This means that you do not pay anything unless your hired firm wins your case or successfully settles your claim. Even then, you should not have to pay anything out of pocket. Rather, their fees will come as a percentage of the amount of your final payout. At Chubb Law Accident and Injury Attorneys, we give our all to make sure that you get the compensation you deserve without a further strain on your finances.

Get the Support You Need to Settle Your Florida Personal Injury Case

Whether you are in the beginning process of filing a personal injury claim with an insurance company or deciding whether or not to settle, you do not have to go through this process alone. At Chubb Law, we help you evaluate your current situation and determine the best course of action, whether settling with insurance, continuing to negotiate, or filing litigation for the maximum compensation possible.

When you are ready to take the next steps, contact us for a free case consultation. We will answer your questions and work with you to fight for the full compensation you need to rebuild your life after a personal injury.