Settlement Offers

Not necessarily. The first offer should be evaluated rather than automatically accepted or rejected. Find out how the insurance company arrived at the number, what medical expenses it is recognizing, whether it disputes any treatment, whether future medical care may be necessary, and what the offer requires you to give up.

An early offer can sometimes be reasonable, particularly when the injury is minor, treatment is essentially complete, the losses are known, and the person is confident there will be no significant future consequences. The problem is accepting an offer before you have enough information to know whether it is reasonable.

An insurance company may want to resolve a claim early, before the full nature and extent of the injury are known. Early in a claim, there may be uncertainty about future medical treatment, permanent injuries, lost income, and other damages.

An early offer is not automatically improper or unfair. But if an adjuster contacts you only days after an accident, asks to meet personally, and arrives with a check and a release, that is a good reason to slow down and understand exactly what is being offered and why.

An invitation to meet is not necessarily improper, but the timing and circumstances matter. If the accident was recent and the adjuster wants to meet before you know the extent of your injuries, be cautious about making any decisions at that meeting.

Some adjusters may be very friendly and present themselves as someone who is simply trying to help. If the meeting also involves a settlement check and a release, understand that the purpose may be to resolve the claim before additional information develops. You do not have to make an immediate decision simply because the adjuster has arranged a meeting.

Start by asking how the adjuster arrived at the number.

Ask what the insurance company is allowing for medical expenses, lost income, and other economic damages. Ask whether any medical bills or treatment are being disputed and, if so, which ones and why. Ask whether the insurance company believes additional medical care will be necessary and what it is relying upon in reaching that conclusion.

Getting those answers can help identify exactly where the two sides disagree.

Yes. Negotiation is a normal part of resolving many personal injury claims. A first settlement offer is not necessarily the insurance company's final position.

If you believe the offer is too low, it is generally more productive to understand the reasons for the insurance company's valuation and respond to those specific issues than simply to say that the offer is unacceptable. Additional medical records, medical opinions, wage documentation, photographs, witness information, or other evidence may sometimes change the insurer's evaluation.

You do not necessarily have to reject the offer, but you should recognize that you may not yet have enough information to evaluate it.

If you do not know the full extent of your injuries, the likely duration of your treatment, or whether you will have permanent problems, it may be difficult to determine whether the settlement adequately compensates you. A reasonable response can simply be that you appreciate the offer but are not yet in a position to evaluate it because the medical picture is still developing.

Usually, once you have entered into a binding settlement and signed a release covering the claim, you cannot later return and demand additional compensation simply because your injury turned out to be worse than expected.

This is one of the most important consequences of settling a personal injury claim. The exact effect depends on the settlement agreement and release, but a person should assume that signing a broad release is intended to bring the claim to an end.

A release is a legal document in which the person receiving the settlement gives up specified claims against the parties being released.

The settlement check is the money you are receiving. The release concerns the rights you are giving up.

That distinction is important. Before signing a release, understand exactly who is being released, what claims are being released, and whether the release addresses unknown or future claims.

Do not assume that an uncashed check means the settlement has not taken effect.

The legal significance depends on the settlement agreement, release, the parties' conduct, and other circumstances. If you have signed a release, that document may be far more important than whether the check has actually been deposited.

If there is any uncertainty about whether a settlement has become binding, it is worth obtaining legal advice before taking any further action.

Generally, a personal injury settlement can include compensation for both economic and non-economic damages, assuming those damages are supported by the facts and applicable law.

Economic damages can include things such as medical expenses and lost income. Non-economic damages concern losses such as physical pain, emotional distress, inconvenience, impairment, and the effects of an injury on a person's life.

There is no universal formula that determines the value of pain and suffering. The facts of the individual injury matter. If you were uninsured on the date of the accident (vehicle cases), you are precluded from seeking pain and suffering damages pursuant to proposition 213.

California's Proposition 213, passed on November 5, 1996, changed the state's personal injury laws by restricting who can sue for "pain and suffering" damages after a car accident. Under this law, uninsured drivers, drunk drivers, and fleeing felons may be barred from recovering non-economic damages, even if the other driver was completely at fault.

No. Medical bills are important evidence of economic loss, but they do not by themselves determine the value of a personal injury claim.

Two people can have similar medical expenses but very different injuries, treatment experiences, limitations, and long-term consequences. Liability, credibility, lost income, future medical care, permanent impairment, pain and suffering, insurance coverage, and other circumstances can all affect the evaluation.

Ask the adjuster to identify exactly which bills or treatment the insurance company is disputing and why.

The disagreement may involve the reasonableness of the charges, whether particular treatment was related to the accident, whether treatment continued longer than necessary, or whether some other issue exists. Once the specific objection is known, it may be possible to respond with additional records, medical opinions, or other evidence.

Limited insurance coverage can significantly affect the practical settlement analysis.

The value of an injury claim and the amount of insurance available to pay it are two different things. If the responsible party has limited assets and limited liability coverage, the available insurance may become an important consideration in deciding how to resolve the claim.

Depending on the circumstances, your own uninsured or underinsured motorist coverage may also provide an additional source of recovery. The rules governing that coverage are technical, so the policies and applicable California law should be reviewed carefully before resolving the claim.

It means the gross settlement is $100,000. It does not necessarily mean $100,000 will go into your pocket.

Depending on the case, attorney fees, litigation costs, medical liens, health-insurance reimbursement claims, Medicare or Medi-Cal issues, and other obligations may have to be paid from the settlement. The amount ultimately received by the injured person is the amount remaining after the applicable deductions and obligations have been addressed.

Before accepting a settlement, ask for the actual numbers. Know the gross settlement, the anticipated deductions, and the estimated net recovery.

Not necessarily.

A relatively minor injury with clear liability, limited medical treatment, known damages, and a complete recovery may be something an injured person can reasonably handle without hiring an attorney. In a small claim, attorney fees can consume a significant portion of the recovery without adding enough value to justify the expense.

Legal advice can become much more valuable when the injury is significant or permanent, liability is disputed, future medical care is involved, multiple parties or insurance policies are involved, substantial liens exist, or the insurance company is making a significant settlement offer before the full medical picture is known.

The important question is not simply whether you can hire a lawyer. It is whether the lawyer can reasonably add enough value to justify the cost.

There is no universal deadline requiring you to accept or reject an insurance settlement offer by a particular date. However, California law imposes statutes of limitation and, for certain claims, special claim-presentation requirements.

For many personal injury claims, California Code of Civil Procedure section 335.1 provides a two-year limitations period. Different rules can apply depending on the defendant and circumstances, including claims involving government entities, minors, and other special situations.

Do not assume that ongoing negotiations with an insurance company automatically extend the applicable filing deadline.

First, find out why the insurance company believes the claim is worth the amount offered.

Ask the adjuster to explain the valuation. Determine what medical bills, lost income, future medical care, liability issues, and other damages the insurer is recognizing or disputing.

Then decide whether additional evidence could address those concerns. If the parties remain far apart, further negotiation, mediation, arbitration, or litigation may become options depending on the circumstances.

The important thing is to understand the disagreement before deciding what to do next.