When Should I Accept a Personal Injury Settlement?

settlement definition dictionary page

After an unexpected injury, people are often overwhelmed with doctor’s appointments, sudden bills, and pain that prevents them from going to work or doing normal daily activities. When they receive a phone call from their insurers offering a settlement, many victims are tempted to take the money, hoping it will allow them to get their lives back to normal. Unfortunately, victims who don’t consult an experienced personal injury lawyer before accepting a settlement offer could be vastly underpaid with no hope of future recovery.

What All Victims Should Know Before Accepting a Settlement Offer

The most important thing you must know about settlements is that they are final and legally binding. Settlement agreements include a release of liability, meaning once you sign, the insurance company is not responsible for any additional payments. Even if you later realize the offer you accepted is far short of what you deserve, the liability waiver will prevent you from seeking more money, even if you file a lawsuit.

Before you consider accepting a settlement offer, it is vital that you understand:

  • The full extent of your injuries. A common insurance company tactic is to offer settlements as quickly as possible—even within a few days of the accident. This has plenty of advantages for the insurer: the victim is confused and anxious, has not had comprehensive medical treatment, and is probably much less informed about the claims process than an adjuster. The only way to know how your injures will affect you in the future is to wait until your recovery is complete. While you are recovering, you can pay your accident-related medical bills using your health insurance, creating a record of exactly how much your treatment has cost. Once you have reached maximum medical improvement (MMI), you will be able to claim the full amount of past medical costs and have a better understanding of how much your ongoing care will cost you in the future.
  • The true cost of the accident. To a victim, a few thousand dollars can seem like a fortune; to an insurer, it’s a drop in the bucket. While a first offer may cover the out-of-pocket expenses you have already incurred, it may fall far short of what you lose as a result of injury complications in the future. A settlement offer should cover the full value of your accident, not just immediate costs such as vehicle repairs, alternate transportation, and current medical expenses. A quick settlement will likely not contain payments for future unknown quantities, including lost wages, future medical treatment, estimated future lost earnings, replacement services costs (such as yard work or child care), nursing care, and mental health treatment.
  • If you reject a settlement offer, you can still get compensation. Insurance adjusters are trained on what language to use to influence victims, such as implying that settlement offers are “use it or lose it” agreements. The truth is, an initial settlement offer is just the beginning of a negotiation process that may continue all the way to the trial stage. Each time you receive a settlement proposal, you have the ability to accept or make a counter-offer to the insurance company. Settlements can be rejected several times throughout the course of a claim, with the amount offered varying widely depending on how likely you are to win your case in court. Once an accident victim is represented by a personal injury attorney who is willing to go all the way to trial, the insurance company is much more motivated to make a fair settlement offer to avoid the expense of fighting—and potentially losing—in court.
  • One phone call can prevent you from making a serious mistake. Insurance companies rely on victims’ lack of information about their rights in order to pressure victims into accepting quick settlements. The easiest way to protect yourself is to have a personal injury lawyer look over the offer before you accept it. Attorneys are well-versed in the legal aspects of injury claims, including the limitations placed on settlements and calculating the full value of claims.

At GriffithLaw, we understand that injury victims are reluctant to take on an additional financial burden after the trauma of an accident. That is why our lawyers provide injury clients with a free initial consultation and represent their interests on a contingent fee basis, meaning we do not collect anything unless we secure a recovery for you. To learn more about your claim, download a free copy of our book, The 10 Worst Mistakes You Can Make With Your Tennessee Injury Case.