When you are dealing with an insurance claim, it’s crucial to be aware that some insurance companies might try to minimize their payouts. As a result, they may present you with a lowball offer—an initial settlement proposal that’s significantly lower than what your claim is actually worth.
While it might be tempting to accept this offer and move on, doing so can have serious consequences for your financial well-being. That said, there are several important reasons why you should think twice before accepting a lowball offer:
Inadequate compensation
Lowball offers often fail to cover all expenses related to your claim. For example, suppose you file a claim against your uninsured motorist policy. The initial offer might only consider visible damage to your vehicle, overlooking costs like rental cars, lost wages and medical check-ups.
In that case, you could be financially responsible for expenses that should be covered by the insurance company.
Underestimation of long-term impacts
Some insurance companies make quick offers before claimants know the full extent of their damages or injuries. In personal injury cases, some conditions may worsen over time or require ongoing treatment.
Therefore, a hasty settlement might leave you without recourse for future medical expenses, extended time off work or chronic pain management.
Waiver of rights
When you accept an insurance settlement, you typically sign a release form. This legal document may prevent you from seeking additional compensation later, even if you discover new damages or your condition worsens.
Once signed, it can be extremely difficult to reopen the claim. This could leave you with no further legal options.
Disregard for noneconomic damages
Lowball offers often focus solely on tangible, economic losses like property damage or medical bills. They may overlook or severely undervalue noneconomic damages, such as:
- Pain and suffering
- Emotional distress
- Loss of enjoyment of life
- Impact on personal relationships
Keep in mind that these intangible losses can be significant, and they also deserve fair compensation.
Don’t settle for less than what you deserve
Insurance companies that make lowball offers may be acting in bad faith. This can be especially true if they pressure or threaten you into accepting such a low settlement. In such cases, legal help may be necessary to recover the compensation you deserve.
If you receive a lowball offer, think twice before accepting it. Instead, consider talking to an attorney who can help assess your case, determine what’s fair and fight for your right to a fair settlement.
