Many people have heard horror stories about pursuing compensation after a car crash. They may hear tales of insurance companies delaying payments for weeks while people struggle with vehicle repair bills and medical costs. They may even have difficulty covering basic cost-of-living expenses if they cannot work due to their injuries.
The option of receiving a lump-sum settlement can be very tempting for those dealing with car crash injuries. Instead of a slow trickle of payments for individual expenses, people can secure a lump-sum payment all at once that could potentially eliminate most of their crash-related costs. Yet, while settlements do help people regain control of their finances as soon as they cash a check, there is a downside to settling a car crash claim.
Settlements end compensation rights
The main issue with a settlement is that it is the only compensation the insurance company provides. The party settling the claim effectively gives up their right to demand additional compensation in the future. Insurance adjusters often take advantage of people’s eagerness to avoid protracted and frustrating claims by offering the settlement early in the process.
They may offer just enough to make the settlement seem reasonable while still providing far less than the policy limit of the driver who caused the crash. Even if the injured party has tens of thousands of dollars in additional expenses and the settlement is far below what the policy could cover, they likely cannot go back seeking more compensation later.
Evaluating an offer carefully is important
To avoid suffering massive financial losses after a car crash, those seeking insurance compensation need to look very carefully at settlement offers. They need to have a realistic idea of their long-term losses to determine if the settlement offer is appropriate.
Lost wages and employment benefits can be a major contributing factor to the overall value of the claim. Vehicle repair or replacement costs can also be a consideration, along with the diminished resale value of a repaired vehicle.
In scenarios where the settlement falls short of the current and projected future losses caused by a car crash, people may need to counter the initial offer. In some cases, they may even need to initiate a personal injury lawsuit to push for a more reasonable settlement.
Realizing that insurance companies want to limit liability, not necessarily support those dealing with car crash injuries, can help people maintain an informed perspective when responding to a settlement offer. And still, people may need assistance dealing with insurance companies when professionals try to trick or manipulate them into accepting less than they deserve. That’s okay.
