Sometimes, an insurance company will shock victims of auto accidents by offering a settlement soon after the incident. The insurance adjuster may claim that they want to make sure you get compensation you deserve as soon as humanly possible.
Sadly, some accident victims will accept the offer and are just happy they got anything at all. That's the wrong mentality. When the money you received runs out and you are still left withunpaid medical billsand other damages, it can put victims in a bad situation.
In reality, the settlements insurance companies offer so quickly are typically too low and do not cover the losses of the victim. Why do they do this? Read on to understand the reasons why they make such low offers and why you shouldn't rush to settle.
ANY personal injury attorneycan help you understand your rights and seek fair compensation in your case.Brandon J. Broderick, Attorney at Lawhas assisted accident victims in obtaining compensation for years. We promise to actively seek the highest possible reimbursem*nt.
Initial Settlement Offers: Why They Are Low
There are several reasons why insurance companies will offer to settle quickly for a low amount. Reasons why include:
Protecting Profits
Companies that provide insurance are businesses, and in order to be profitable, they must generate revenue. They collect premium payments and invest them to generate income. They make billions of dollars a year in profits by paying out as little as possible and keeping the rest.
Paying as little for claims as possible allows them to keep their money invested for a longer period of time, optimizing earnings.
Injury Victims Accept Early Settlement Offers
Sadly, some victims willaccept an early settlement offer, even though they are entitled to more. Insurance companies are aware that this will often work, so they employ this strategy. The insurance company makes even more money if the injured party accepts the low offer.
The issue is that the majority of victims are unaware of how much their claim could be worth. They might undervalue the value of their claims on their own, thinking their injuries are not severe enough, or fail to realize that even a "Policy Limit" offer might not be accurate. Additionally, insurers are aware that some victims may be in need of money badly, so they are hoping you'll just accept the offer.
Insurance companies are aware that some accident victims will find it stressful to negotiate a settlement or retain the services of a NY car accident lawyer.
Insurance Companies Don't Believe You'll Retain A Lawyer
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Many accident victims opt not to hire a lawyer. Because of this, insurance companies believe that victims won't retain counsel. Without legal representation, a victim is more likely to accept a low compensation offer. After the insurance company makes its initial offer, some victims might not even submit a counteroffer, which makes things much easier for the insurance company.
Furthermore, insurance companies do not want victims to retain counsel. When a car accident claim is tried in court, a jury may award much more than the insurance company would have paid inan out-of-court settlementwith a lawyer.
Without representation, the insurance company is less compelled to make a better offer that will cover your losses. This is why it's so important to consult with a lawyer after an accident.
