Omar Ochoa Law Firm

What Happens When You Reject an Insurance Settlement Offer?

Updated:

September 21, 2023

by

Omar Ochoa

September 21, 2023

December 5, 2023

After you file an insurance claim, you'll wait for one pivotal moment: The insurer will finally extend a settlement offer. This juncture is laden with decisions. Do you accept the offer, potentially closing your claim? Or do you reject it, opening a new chapter in your claim's journey?

The legal team at Omar Ochoa Law Firm explains what happens if you choose to decline an insurance company's initial offer. As seasoned insurance lawyers, we'll shed light on what happens when you decide to reject a settlement offer, guiding you through the potential consequences, intricacies, and steps to navigate this critical choice. Your insurance journey is about to become clearer.

Do You Have to Accept an Insurance Company's First Offer?

After you file a claim, you are not obligated to accept the insurance company's first offer. Insurance adjusters are tasked with assessing damages and proposing settlements, but the first offer may not align with your needs or reflect the full extent of your losses.

You have the right to carefully evaluate the offer and — if it falls short of what you believe is fair and adequate — reject it. Rejecting an initial offer does not mean the end of settlement negotiations. Instead, it's a common step in a longer process.

What Happens If You Reject the Settlement Offer?

What Happens If You Reject the Settlement Offer?

When you reject an offer from an insurance company, you can expect one or more of these scenarios to unfold:

Continuation of Negotiations

Declining an offer doesn't automatically signal the end of negotiations. Even if the insurance company refuses to meet your expectations with its first offer, both parties can persist in negotiations, aiming to achieve a mutually agreeable resolution.

Possible Counteroffers

After you reject the initial offer, the insurance company may return with a counteroffer. This back-and-forth may continue until an agreement is reached.

New Insurance Adjuster

Should you find your negotiations at an impasse or if the insurance adjuster is demonstrating unreasonable behavior, you have the option to request a new adjuster. Sometimes, a claims adjuster may adopt a confrontational approach, pressuring accident victims into accepting the insurance company's offer. Asking for a change in the assigned adjuster could inject new momentum into the process.

Litigation

If settlement negotiations stall, you might choose to escalate the matter by filing a lawsuit against the insurer. This is generally a last resort, but it begins the formal legal process. Negotiations might continue, but eventually, the lawsuit could end up in court.

It's crucial to understand that rejecting a settlement offer comes with risks and potential delays. However, it can also result in a more favorable outcome; you could secure a higher settlement or achieve a resolution that better aligns with your needs and the extent of your damages. Ultimately, the consequences of rejecting a settlement offer vary from case to case. That's why it's important to carefully consider your options and see legal guidance when necessary.

Common Reasons to Reject a Settlement Offer

Common Reasons to Reject a Settlement Offer

There are several valid reasons a claimant might choose to reject a settlement offer from an insurance company:

  • Insufficient Amount: The offered amount may not fully cover the damages, leaving the claimant with an unreasonable financial burden.
  • Disagreement on Liability: If there is a dispute over who was at fault in the incident, the claimant may reject the offer to assert their claim's validity.
  • Future Expenses: Concerns about potential future costs related to the claim, such as ongoing medical treatments or property repairs, can be a good reason for rejecting the offer.
  • Uncertainty: A claimant might reject an offer if they believe more evidence is needed to establish the full extent of their losses.
  • Higher Expectations: When the claimant believes the value of their claim is greater than the offered settlement, they may opt to hold out for a better outcome.

To exercise their right to a fair and just resolution, a policyholder or claimant may reject an offer that they perceive as undervalued or unjust.

How Do I Refuse an Insurance Settlement Offer?

When faced with an insurance settlement offer that doesn't meet your needs or expectations, you should know the steps to take to protect your interests. Follow this guide to navigate the process of rejecting an insurance company's initial settlement offer:

  1. Seek Legal Representation: Before making any decisions, consider consulting an insurance claims attorney at Omar Ochoa Law Firm. We can provide insight into the fairness of the offer and guide you on the next course of action.
  2. Evaluate the Offer: Review the insurance company's first settlement offer carefully. Assess whether it adequately compensates you for damages, including medical expenses, lost income, and property damage.
  3. Consider the Timing: Be mindful of any deadlines associated with accepting or rejecting the offer. Discuss the time limit for this with your attorney to ensure you stay within legal constraints.
  4. Document Your Case: Maintain thorough records of all communication, documents, and evidence related to your claim. Keep all communications with insurance adjusters, proof of lost wages, and records of your medical expenses. This documentation can be crucial in building a solid case.
  5. Counter Offer: You have the option to counter the first settlement offer. This involves proposing a more reasonable settlement amount based on your assessment of the claim's full value.
  6. Engage in Negotiations: Continue negotiating with the insurance company's adjusters. Your attorney can assist by presenting your case and advocating for a fair offer.
  7. Send a Demand Letter: In some cases, a formal demand letter outlining your claim and desired compensation can strengthen your position during negotiations.
  8. Be Prepared for Legal Action: If negotiations fail to yield a fair settlement, pursuing legal action against the insurance company may become necessary. Your attorney can guide you through the legal process, working on your behalf to protect your rights.

Remember, accepting a lowball settlement offer isn't your only option. By rejecting an inadequate offer and pursuing negotiations or seeking legal recourse, you can work toward securing an offer from the insurance company that makes sense for your situation.

Why Is It Important to Work with an Experienced Insurance Attorney?

Why Is It Important to Work with an Experienced Insurance Attorney?

When you find yourself in the challenging position of deciding whether to accept or reject an insurance settlement offer, having an experienced insurance attorney by your side can make all the difference. An attorney's job is to protect your best interests throughout the process, and they rely on extensive knowledge and skills to represent you in negotiations and beyond.

Here are several reasons to partner with a seasoned insurance attorney:

  • In-Depth Knowledge: Insurance attorneys understand the intricacies of insurance law, policies, and the tactics insurance companies often employ.
  • Legal Guidance: Attorneys provide you with qualified legal counsel, helping you make informed decisions about when to accept a settlement offer.
  • Negotiation Skills: Many attorneys are skilled negotiators who effectively advocate for fair compensation and effectively counter lowball offers.
  • Claims Assessment: A knowledgeable lawyer will estimate the true value of your claim, taking into account all potential expenses so that you don't settle for less than you deserve.
  • Documentation Assistance: An attorney can help you gather and organize essential documentation to strengthen your case.
  • Legal Rights Protection: Your lawyer will aim to protect your legal rights and prevent the insurance company from taking advantage of you.
  • Experience With Bad Faith Tactics: When the insurance company is not acting in good faith, an experienced attorney can recognize and address these unethical practices.
  • Court Representation: If negotiations fail, attorneys can represent you in court, pursuing the compensation you're entitled to.
  • Potentially More Compensation: Ultimately, an attorney's goal is to secure the full amount of money you need to rebuild and recover from the aftermath of the incident.

In the complex world of insurance claims, an experienced lawyer can be your greatest ally, working tirelessly to negotiate for a fair and just settlement offer or, if necessary, advocating for your rights in a court of law.

Safeguard Your Right to a Fair Settlement

The stakes are high in an injury claim, and the decision to reject a lowball offer can be a game-changer. When you reject an insurance settlement offer, you're taking control of your future, insisting on fair compensation, and safeguarding your rights. This decision can lead to a more equitable resolution that addresses the full extent of your losses.

At Omar Ochoa Law Firm, we fight for reasonable settlements and financial justice in personal injury and property damage cases across Texas. Our mission is to empower you to make the best choices for your well-being. Reach out today for a free consultation and let us champion your cause.

Omar Ochoa

Omar Ochoa has been nationally recognized as one of the best young trial lawyers in the country. He's represented clients in federal and state courts and arbitrations throughout the United States and internationally. He is highly experienced in a wide range of complex litigation and has handled a variety of cases. He has recovered hundreds of millions of dollars for clients of all types — from individuals to mid-sized business owners to multi-national companies.

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