Settlement Offer Timeframe
If you’re seeking compensation for injuries you incurred due to someone else’s careless or reckless actions, settlement offers will likely be an essential part of the process. Most personal injury claims resolve through out-of-court settlements. One question that our clients commonly ask us is: “How long do I have to accept a settlement offer?”
While there often is not a clear answer to the question, there are good reasons to accept an offer quickly. Still, there are several important reasons to consider the request carefully before deciding.
What Is a Settlement Offer?
A settlement is an agreement that ends a legal dispute and results in the voluntary dismissal of any pending litigation. A settlement offer occurs when a personal injury claimant’s attorney submits a demand package to the at-fault party’s insurance provider. The provider does not wish to deny the claim but rather to reduce the expense of the pay-out.
Settlement offers aren’t necessarily hard to obtain, but obtaining an offer that fairly compensates you for the expenses and impacts of your injury can be difficult. An insurance company adjuster will protect the company’s bottom line by reducing the compensation paid out on claims.
The Anatomy of a Settlement
An adjuster is assigned to the claim when an insurance company receives a demand package from a personal injury attorney. They will evaluate the material contained in the demand and begin investigating the claim.
This investigation can include:
- Interviewing the insured party to get their side of the story
- Investigating the claimant to learn if they have ever filed a personal injury claim before
- Requesting additional documentation about the claimant’s injuries
- Determining whether to offer a settlement, based on factors such as the likelihood of the claimant winning the case at trial and how much the court will likely award them for their claim
Generally, the first offer made on the claim is a percentage of the claim’s total value, such as an offer for 40 percent of the claim. This percentage is not an industry standard, and claimants not represented by an attorney generally see lower initial offers than those who are.
How Long Do You Have to Accept a Settlement Offer?
There is no industry standard for how long a claimant should have to accept the settlement offer. Some insurance adjusters provide a date by which the claimant must accept the offer to be valid, while others expect an answer within a reasonable amount of time.
If There Is a Date on the Offer
Generally, deadlines are attached to settlement offers to pressure a personal injury claimant to accept the offer quickly, so the claim resolves. They offer settlements based on your likelihood of winning at trial and being awarded the total amount of your claim, the insurance company’s pressure is an indication that you have a strong case. Your attorney will manage communication with the insurance adjuster to protect your suit from such tactics and to promptly address them when they use those tactics.
Instead of accepting or denying the offer, your attorney can make a counter-offer. The back and forth negotiation of the settlement will continue until both sides reach a compensatory amount on which they can agree.
The Things You Need to Consider Before Accepting the Offer
Settlement offers are serious business. Once you agree to the offer, you waive the right to go back and seek compensation from the at-fault party’s insurance policy again, even if you later discover that the amount you agreed to was not enough to compensate you for your injury. Because of this, it is essential to consider the following factors to determine whether the offered amount is fair.
The Total Cost of Your Expenses and Impacts
Many people only think about medical costs and property damage when seeking compensation. However, personal injury claimants are entitled to seek compensation for other expenses and impacts of their injury, including lost wages, pain, and suffering, and the future medical and psychological needs you will likely experience in the future as a result of your injury.
These are not figures that you will know right away. Many personal injury attorneys encourage their clients to wait until they have reached maximum medical improvement, which is the point at which your doctor determines that you are unlikely to make any further meaningful recovery from your injury. At maximum medical improvement, medical expenses are more accurately calculated, and you have a clearer picture of the future medical needs the injury will cause.
How Much Time You’ve Missed From Work and Any Impacts to Your Future Earning Capacity
A fair settlement offer will not only pay lost income, benefits, and other earnings that you missed out on because you were too injured to work but also will consider the impact of the injury on your future earning capacity.
Catastrophic injuries, such as those occurring to the brain or spinal cord, often result in disabilities that render the claimant unable to earn an income. However, even injuries that aren’t considered catastrophic can result in a loss of future earning capacity if the claimant must take a different, lower-paying position or a lighter workload to accommodate the injury.
Whether Your Injuries Are Permanent and Will Incur Future Expenses
Having a permanent injury affects a person’s ability to earn an income. It can result in several other expenses and impacts, such as the need for a home healthcare provider or placement in a long-term care facility or complications that will result in future hospitalizations.
Many injuries and subsequent chronic pain limit the sufferer from resuming regular activity. Being in pain for long periods can cause many psychological impacts that deserve compensation. A fair settlement will include compensation for your physical pain and suffering.
The Guidance Your Attorney Can Provide as You Make Your Decision
It is important to note that the decision to accept a settlement offer is yours alone to make. Your attorney plays a vital role in making that decision, as they have the experience and legal knowledge to understand if the offer is fair or if you can obtain more through either continued negotiations or a trial.
If You Don’t Accept the Settlement Offer, Will the Insurance Company Walk Away From Your Claim?
Up to 96 percent of personal injury claims settle before trial. The most important benefit of a settlement is that it avoids the time and cost of a trial.
Some of those costs include:
- Court filing fees and a daily stipend for jurors if your trial is before a jury
- A copy of the court transcript
- Payment for expert witnesses, such as medical professionals or accident reconstruction experts
- Administrative expenses, including copying, traveling, legal research, and the creation of trial exhibits
- The cost of a stenographer to conduct witness depositions
What Can You Do to Obtain the Highest Settlement Offer Possible?
Because the initial settlement offer made by the insurance adjuster is rarely even close to the amount they’re willing to pay on the claim, your attorney will negotiate to convince the adjuster to increase the offer.
Some of the actions you can take to help with this process include:
- Never talk to the adjuster yourself without your attorney being present. Speaking with the adjuster is risky, as anything you say to them can decrease the value of your claim. This includes verbally accepting a settlement offer.
- Be clear with your attorney about your expectations. Once you know the value of your claim, you should have a minimum settlement figure in your head. Be unwilling to accept less than that minimum amount.
- Provide as much documentation and evidence to your attorney as possible, as this proves to the insurance company that the accident occurred, the injuries you sustained are real, and that they were the insured’s fault. If needed to prove non-economic impacts that you have incurred due to your injury, journal the hospital visits, costs, and other evidence that shows how the injury has diminished your quality of life.
What if You Change Your Mind After Accepting an Offer?
Once you have indicated to your attorney that you wish to accept an offered settlement, they will work with the at-fault party’s insurance company’s legal counsel to draw up a settlement agreement to be signed by both parties. This agreement includes the release form that waives your right to additional compensation on the claim through litigation.
Once you sign the agreement, it is legally binding, and you cannot change its terms or decide you want to take the case to trial.
Can Your Attorney Push You to Settle Your Claim Before You’re Ready?
Your attorney’s role is to negotiate favorable settlement terms on your behalf and to provide you with the guidance you need to make an informed decision on the matter. The attorney can explain to you how they established the value of your claim, and also—in consideration of the expenses, impacts, and future issues you will likely experience due to your injury—help you to understand what constitutes a fair settlement. However, they cannot push you to accept a settlement or decide for you.