Is It Worth Accepting the First Settlement Offer from an Insurance Company?

Following a car accident, most people want to move on and get their life back on track. Medical expenses are likely piling up, repair costs of property can be overwhelming, and if you are missing work, this only adds to the stress. Generally, an insurance adjuster will assign fault in the case, and then the at-fault driver's insurance company may come to offer a settlement to close the case. 

When the insurance settlement offer comes quickly, such as within days or weeks of the accident, it can be very tempting to accept the first offer. 

However, is it a good idea to accept a first offer? Will it cover the extent of your damages? Is filing a personal injury lawsuit going to give you the compensation you deserve? 

First offers rarely will cover the accident injuries, not to mention other damages like property damage, future medical treatment, or pain and suffering. In most cases, the first offer is a lowball offer. You don't have to accept any settlement offer at all. 

Sometimes it's a good idea to accept the first insurance offer, but other times, depending on the extent of your injuries, the value of your claim is much higher, and a car accident lawyer can ensure you get compensation that is much fairer. 

Powell Law Firm has been helping people in St. Louis deal with insurance company offers and helps their clients determine if they should accept the insurance company's first offer or if they should take further action. They can help discuss questions like Is it worth taking a car accident case to court?

Why Insurance Companies Make First Offers Quickly Following a Car Accident

As much as people want to think that their insurance company has their best interests in mind, that's not what really happens. At the end of the day, insurance companies expect to pay as little as possible. This is why the first settlement offer is usually a lowball offer and much less than the claim is worth. Additionally, the first offer is often done very quickly, as the insurance company wants to make sure that the victim in the case doesn't have a chance to really look into what they could actually get in an insurance claim. The strategy to offer a quick settlement is usually done to do the following: 

• Closing the claim as soon as possible - When a claim is closed, it's closed. So, even if the victim finds out they should get more money or discover more damages, they can't file any suit as they closed the claim already. 

• Saving money - Insurance companies often push early settlements so that they can save money.  They would much rather pay $15,000 than $100,000. 

• Limits future liability - A first settlement offer is usually made to prevent future liability. This way, the insurance company won't need to pay for long-term care, future lost wages, or ongoing pain and suffering. 

When the insurance company makes a first offer, they make it sound like it's the perfect lifeline for the victim. However, the first settlement offer usually is a lowball offer that won't cover much.

Though there may be cases where you want to accept the first settlement offer to stop the process, it's always best to get a lawyer. A personal injury lawyer can help ensure you are fully understanding the extent of the offer, and know that you may be able to get a higher offer in the future if you negotiate. 

Risks of Accepting the First Settlement Offer from an Insurance Company in a Car Accident Claim

There are risks to consider before accepting a first settlement. Essentially, when you do this, not only do you settle for less, but you also release liability. This means that accident victims can never request more money later, even if new injuries or damage are discovered. 

Here is the full scope of what is at risk when signing off on the first settlement: 

1. Underestimating medical costs - Some injuries, like concussions or soft-tissue damage, may not show up for several weeks or months. Because of this, you may not know the full extent of your injuries and losses until after you have signed off. The range of injuries you have may also cause chronic pain and the need for ongoing treatment in the future. 

2. Not considering non-economic damages - Another reason you shouldn't settle is because you can add damages, including pain and suffering , emotional distress, and reduced quality of life...even temporarily...which you have a right to and should be added to the full value of your claim. If you take the first settlement, you may not even know what's at stake. 

3. Waiving future legal rights - Once the settlement is signed, it's crucial to understand that there is no other recourse. Even if you have not fully recovered from your injuries, you cannot go back and ask for more money to cover medical payments or other costs...even if there are new developments or you require ongoing care. 

The short-term relief of quick payment might sound good to supplement insurance coverage, but it can certainly lead to long-term financial strain if the settlement doesn’t cover all damages.

When Accepting the Initial Settlement Offer Might Make Sense

Though rare, there are situations where accepting the first settlement offer could be reasonable:

• Minor accidents with minimal damages – If the accident involved only property damage and no injuries, and the repair costs are fully covered, taking the first offer might be the best way to protect your rights.

• Clear liability and fair payment – If the insurer’s offer matches or exceeds the calculated damages and the case is straightforward, settlement could be a good choice to ensure you receive the payment you deserve.

• Urgent financial need – If immediate payment is critical to cover expenses and the offer is close to fair value, accepting might be practical—though it still carries risks, and you may be entitled to more.

• Legal confirmation – If an attorney reviews the offer and confirms it’s fair, accepting can help avoid a prolonged claims process for you and the release of liability for the other driver.

The key is to base the decision on facts, not just the desire for quick closure or accepting the offer out of fear. An attorney can evaluate your case and give an opinion on if the settlement is good or not.

The Role of an Attorney in Settlement Negotiations - What Happens if I Reject a Settlement Offer? 

Insurance companies have teams of adjusters and professional car accident attorneys working to protect their bottom line. Having an experienced personal injury attorney levels the playing field.

A lawyer can:

• Evaluate the offer’s fairness based on the true value of the claim.

• Negotiate for higher compensation for everything from lost income to medical bills by presenting evidence, expert opinions, and legal arguments.

• Protect legal rights to ensure the injured person doesn’t waive important claims too early.

• Handle communications so the claimant can focus on recovery without pressure from the insurer.

• Prepare for litigation if negotiations fail, showing the insurer that the claimant is serious about fair compensation.

In many cases, simply hiring an attorney can result in significantly higher settlement offers, and they can help you understand whether to accept or decline any settlement offer. Remember that the insurance company doesn't have your best interest in mind. 

Get Legal Representation From a Car Accident Attorney - File a Personal Injury Claim to Get a Fair Settlement

While it might seem tempting to accept the first settlement offer from an insurance company, doing so often means leaving money on the table—and sometimes a lot of it. These early offers are typically designed to minimize payouts, not to fully compensate for the injured person’s losses.

Unless the accident was minor, the damages are fully covered, and an attorney has confirmed the offer is fair, it’s usually better to negotiate for more. The best way to protect one’s rights and financial future is to consult with an experienced personal injury lawyer before making any decision. 

A skilled attorney can help determine the true value of a claim, negotiate with the insurance company, and ensure that the settlement reflects the full impact of the accident—both now and in the years to come.

Powell Law Firm offers a free consultation to those in the St. Louis area who have been offered a settlement following an accident. They can help by handling your claim and evaluating the fairness of a first settlement offer. Call today.