Recovering from a severe accident takes a long time. It often requires significant time away from work while you heal. Between lost wages and medical bills, financial strain begins to take over your life.
When the insurance company offers you a settlement, it can seem like a lifeline. However, it’s likely less than you need and deserve.
How do insurance companies determine claim amounts?
California is an at-fault state, which means that whichever driver caused the accident is liable for any damage or injuries sustained by the other motorists. After liability has been established, an insurance adjust will evaluate the following to determine the settlement amount:
- Medical records that state the extent of the injuries, surgeries, hospital stays, medical treatment and any future medical needs and the associated costs
- The physical pain and emotional distress that impact your quality of life
- Expected length of recovery
- Lost income
The insurance company will then propose a settlement amount, which may be lower than expected. There are several reasons for this:
- Insurance companies are in business to make a profit. One way to do that is to pay out less in claims than the amount of the premiums they take in.
- They are assuming that you need the money.
- The adjuster may not have all the information regarding the extent of your injuries.
Your actual settlement may be worth much more than is being offered; therefore, it’s beneficial to negotiate the settlement. After all, your recovery may take longer than expected, or you may not be able to return to your previous job. Before making a counteroffer, speaking with someone who can negotiate with the insurance company on your behalf is crucial. They can likely present a strong case for a larger settlement.
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