An insurance company in Chicago, Illinois, may propose a lowball insurance settlement offer to maximize profits and avoid a lawsuit. The company may make a low settlement offer because it used software to generate it, or believes you are likely to take the offer. An insurer may also offer a lowball settlement if it thinks you will not retain a lawyer.
You can challenge a lowball insurance settlement offer by hiring a personal injury lawyer with a history of successfully representing claimants. Building a strong case, aggressively negotiating with the insurance company, and filing a lawsuit against the company are other ways of beating a low settlement offer.
Why Do Insurance Companies Make a Lowball Insurance Settlement Offer?
Maximize Profits
Insurance companies are in business to make a profit. Denying or offering low settlement offers is one way these companies keep their profits high. Their representatives and adjusters may act friendly when interacting with you. They are, however, acting in the best interest of their employer (the insurance company), not you. They are just waiting for you to make a mistake so that they can use it to justify a lowball settlement offer or claim denial.
Avoid a Lawsuit
Insurance settlement agreements contain a release agreement clause. As such, you will lose your right to pursue damages or losses through a lawsuit immediately after signing a settlement offer letter. You cannot ask for any additional funds from the company once you accept a lowball offer.
Accidents can result in severe injuries that exacerbate over time. You may exhaust a low settlement while still receiving treatment for your injuries. You will have to pay for additional expenses out of your pocket.
The Settlement Is Software-Generated
Insurance companies sometimes use software to generate settlement offers. This is especially true for large companies that receive multiple claims daily.
The software weighs your claim against similar claims and estimates your claim value. The estimate does not reflect your claim’s true value for two reasons.
The first is the software is incapable of accounting for unique circumstances in your case.
The other reason is that the software is designed to protect the insurer’s best interests. So, it will create an offer that may seem attractive, but cannot compensate you for the full extent of your damages.
Accept Lowball Settlement Offers
Many people have settled for significantly less than they were entitled to because they did not know their legal rights or actual claim value. Others have accepted low payouts due to stress or financial constraints after a personal injury. So, your company may propose a lowball insurance settlement offer, hoping you will take it like many people do.
They Think You Will Not Retain a Lawyer
Insurance companies count on you not hiring a lawyer to fight for your best interests when they make a low settlement offer. They think you will take on any offer they send your way without pushing for maximum and reasonable compensation. Hiring a personal injury lawyer shows that you are ready to put up a spirited fight and recover the highest possible compensation.
Factors That Can Influence Insurance Settlement Offers in Illinois
Determining Fault in an Accident
Fault determination is one of the most crucial factors affecting settlement offers in Illinois. An insurance company will offer a higher settlement if you have no liability in the accident. The availability of credible witnesses and strong evidence to support your claim will increase your odds of getting a higher settlement offer.
You are likely to receive a lowball insurance settlement offer if you share liability for the accident. The reason is Illinois uses a modified comparative fault model to resolve cases where injured parties may have contributed to their injuries.
Your settlement offer will get reduced if the insurance company or its adjuster determines you are partially at fault for the accident or incident. For instance, if you were 30% liable for your injuries, your final payout would get reduced by 30%.
You will not receive compensation if you are more than 50% to blame for your injuries.
Severity and Extent of Injuries
Another factor influencing insurance settlement offers in Illinois is the severity and extent of injuries sustained. Settlement formulas used by most insurers try to assign a monetary value to physical pain and suffering. As such, the more severe and painful the injury, the greater the multiplying digit that gets introduced into the formula.
Adjusters consider the severity and extent of injuries in determining what digits to incorporate into the formula when preparing a settlement offer. Consequently, your settlement offer may be higher if your injury is considered more serious than if it falls in the less serious categories.
Soft tissue injuries like ankle, knee, back, or neck strains or sprains fall into the less serious categories. Hard injuries, such as head trauma, spinal cord damage, and other different types of catastrophic injuries fall in the more serious categories.
Tactics Employed by Insurance Companies
Insurance companies use various strategies to decrease the value of claims or deny them altogether. These strategies include:
Initial Lowball Offers as a Negotiation Strategy
Offering initial low settlements is part of the negotiation strategy for most insurance companies. An initial low offer marks the beginning of settlement talks. It sets the starting point for the process. Your counteroffer will serve as the upper limit. The difference between the two offers constitutes a variety of potential outcomes.
An insurance company knows an initial lowball offer will trigger an almost instant response from a claimant. The response will help the company gain insights into your negotiation position. If you reject the offer, for instance, the company or its adjuster can estimate how much you are likely to accept.
Delaying Tactics to Pressure Claimants to Accept a Low Settlement Offer
Insurance companies sometimes deliberately delay the claim process, hoping you will fall under the pressure and accept a low settlement offer. They may delay a claim by requesting more medical records, changing adjusters frequently without justifiable reasons, and informing you that a special committee must review your claim.
Minimizing Injuries and Downplaying Medical Records
Insurance companies often minimize injuries and dispute medical records to lower your claim’s value. They may say that although your injuries could have stemmed from the accident, they do not think your injuries are as severe as you claim. Insurance agents may say that you received treatment for longer than necessary or that your treatment was unreasonable. They may also question the validity of your medical records.
Questioning Credibility and Legitimacy of the Claim
Insurance companies evaluate the credibility and legitimacy of a claim before deciding whether to settle or deny it. They may claim that you are lying or overstating some details of your case. They may even come up with reasons to support their claims.
Posting images or texts that cast doubts on your injury severity could compromise your credibility. Financial challenges like debt, drug or alcohol abuse history, and criminal records are other things that could hurt your credibility.
Legal Remedies for Challenging Lowball Settlement Offers
Seek Legal Representation
The most effective and reliable way to challenge a lowball insurance settlement offer is to seek legal representation from a seasoned personal injury lawyer. The lawyer will investigate your case to identify the liable party (or parties), determine the full extent of your damages, and seek maximum compensation from the liable insurance company. Your lawyer will guide you on how to respond to a low settlement offer and help you answer the question, “Why is my car accident settlement taking so long?”
Your lawyer will most likely take on your case on a contingency basis. Through such an arrangement, the lawyer will earn a fixed percentage of the payout he or she recovers for you. You will not pay even a penny if the lawyer loses your case.
Build a Strong Case With Evidence
Building a strong claim can also help maximize your compensation. Police reports, witness statements, expert witness testimony, and lost income documentation are some forms of evidence you may need to strengthen your claim. You may also need images and footage from surveillance cameras near the accident scene. Your lawyer can obtain all the required evidence on your behalf.
Negotiate With Insurance Companies
Do not accept the initial lowball insurance settlement offer, as it usually does not reflect the true value of your claim. Instead, engage the insurance company in a persistent negotiation. Leave the negotiation task to your lawyer. He or she knows what to expect when negotiating with insurers and ways to counter their tricks.
Pursue Legal Action Through Litigation
Move your case to court if settlement talks fail before you can reach a reasonable settlement. An injury lawyer will help present facts, evidence, and arguments to convince the judge or jury to rule in your favor.
