Should I Take the First Offer of a Car Accident Settlement?

December 21, 2023 | David Abels
Should I Take the First Offer of a Car Accident Settlement?

Car accident victims deserve compensation for their injuries and resulting damages. They can hold the negligent person or party liable for paying this compensation. However, if they carry insurance, it usually comes from their auto insurance company.

Unfortunately, auto insurance companies are in business to make money, just like any other business. If they pay claims fairly, they won’t make as much money, so their goal is to pay as little as possible for every claim they receive. While this might be a good financial business move, it’s unethical and leaves victims to fend for themselves when they shouldn’t have to.

Paying as little as possible involves several techniques that insurance companies master, including getting naïve claimants to accept the first settlement offer they receive.

The good news is that when you hire a seasoned car accident attorney, they are well-versed in insurance company tactics, and the insurance company knows it. Therefore, the insurance company is likelier to play fair when a claimant has legal representation. So by hiring a Chicago car accident lawyer, you level the playing field with them. It’s imperative to hire your attorney before even speaking with the insurance adjuster and giving them a chance to use their tactics.

What Is a Car Accident Settlement?

Car accident settlements are agreements between an injured claimant and the person or party liable for the car accident or, more frequently, their auto insurance company on their behalf. With a settlement, the liable party agrees to pay a certain amount of money to pay for the victim’s damages, such as medical expenses, lost wages, and pain and suffering. In exchange, the injured party agrees to no longer pursue their claim and forgo their legal rights to file a lawsuit.

These types of settlements typically save both sides time, money, and hassle that they might otherwise expend for litigation. In fact, settlements are so beneficial to both claimants and liable parties that the vast majority of claims settle out of court to avoid a trial. hey

You can reach a car accident settlement before a case goes to court or even during a trial. Deciding whether to resolve a car accident lawsuit through a settlement or go to trial can be difficult. It should depend on the specific details of each car accident case and the desires of the injured parties. Although, consulting with an experienced car accident lawyer can help make that decision much easier.

Why It’s Best Not to Accept Your First Settlement Offer?

After being involved in a car accident, you submit your claim to the appropriate insurance company and wait. For some claimants, days often turn into weeks, and weeks turn into months, and they never hear anything.

Others receive a phone call within days after submitting their claim. No matter when the first insurance settlement offer comes, you are likely relieved. But should you accept the first settlement offer you receive? Most car accident lawyers advise against doing so, and here’s why.

Insurance companies know full well that injured car accident claimants frequently face financial hardships after an accident. Insurers know claimants are anxiously awaiting the money due to them and, as such, are likely to welcome any amount of money an insurance company offers them.

Sometimes they quickly offer a settlement, but it’s a low settlement. They want to get you to go away for as little money as possible before they have to spend any more money or time dealing with your claim. The insurance company wants you to accept the offer before you can speak with a knowledgeable car accident lawyer and find out what your claim might be worth.

Unfortunately, financially desperate or unsuspecting injured parties often accept first settlement offers that are notoriously low. Before accepting a settlement offer, it’s best to seek sound legal advice to find out if it’s a full and fair offer. Most of the time, it won’t be, and an attorney can negotiate a higher settlement offer on your behalf.

Another excellent reason not to accept a first settlement offer from the insurance company is that you might not yet be fully aware of the extent of your injuries and damages. It can take weeks or months for your doctor to tell you the full extent of your injuries and how or if they will affect you later in life. If you accept the first offer - or any settlement offer - you can’t later go back and ask for further compensation if your injuries are more extensive than you thought. Once you agree to a settlement offer, it’s final.

The Insurance Company Is Using the Settlement Process to Save Money

Should I Take the First Offer of a Car Accident Settlement

After a car accident, you must do what is suitable for you and your family. Your financial interests are at stake. On the other side of the table is the insurance company with its economic interests. Car accident settlements are a zero-sum game between you and the insurance company. Any dollar in your pocket is one out of theirs.

Insurance companies have shareholders and owners who want their investments to succeed. Therefore, there is pressure on the insurance company to save money, and they will try to do it at your expense.

Getting the right amount of money after your car accident is an entirely different story. Even when liability is very apparent right off the bat, it is still a fight to get the check you deserve. In some cases, the insurance company is more than happy to settle a case when they pay you pennies on the dollar for your injuries.

The settlement process can be long and drawn out. Your focus is on getting the insurance company to the point where they are fairly compensating you for your damages. Note that the settlement process is about eventually reaching the point of fair compensation because it does not happen at first.

The insurance company is viewing the settlement process as a negotiation. Just like any negotiator, they will try to leave themselves some room to increase their offer in the future.

Other Insurance Company Tactics to Be Aware Of

Sadly, offering a quick and low first settlement and hoping the car accident claimant will accept isn’t the only tactic insurance companies and their adjusters will use to pay less than they should on a car accident claim. Other tactics you should be aware of include:

Discussing Your Claim With You

Insurance adjusters often come across as very friendly and concerned for your well-being. They want to seem like they care and they are on your side. While they might be genuinely friendly, they will use anything you say against you and twist it to fit their agenda.

For example, if they ask you how you are doing and you say, “Fine,” they might take that to mean that you are completely healed from your injuries and have no pain. However, you were just responding to their greeting naturally and politely. You should limit your conversation with them whenever possible and instead refer them to your attorney.

Requesting a Recorded Statement

The insurance adjuster might also ask you to give a recorded statement regarding how the car accident happened and your experience. Even if they tell you it’s required to process your claim, you are not obligated to give them a recorded statement. It’s usually best if you don’t. Instead, hire an attorney who will be with you to protect your rights anytime you must converse with someone from the insurance company.

Delaying Your Claim

Another easy tactic insurance companies use to attempt to deny or devalue car accident claims is to delay your claim. You might not hear from them for a while, or they might request unnecessary documents or repeatedly ask for the same documents.

No matter how they delay your claim, they hope they will wear you out, and you will get tired of the delays and either forget about your claim or give up. By hiring an attorney, you can let them know you won’t accept unnecessary delays in your claim’s processing and that you are serious about receiving compensation for your damages.

Steps in the Car Accident Claim Settlement Process

Unfortunately, receiving compensation for damages sustained in an auto accident isn’t typically a quick or easy process. All car accident claimants should have a general understanding of this process and its timeline. It’s usually in your best interest to hire a well-versed car accident lawyer who can manage your case for you while you focus on your physical and mental recovery.


When you hire an attorney, they will thoroughly investigate your accident. They need to pinpoint how the accident happened, who is liable, and all sources of compensation available to you (usually in the form of insurance policies).

Their investigation will include:

  • Examining evidence from the scene of the accident, such as pictures, videos, or other objects
  • Speaking to eyewitnesses
  • Obtaining surveillance videos
  • Assessing the police report
  • Gathering information from all involved parties
  • Potentially hiring an accident reconstructionist

The Demand Letter

Once your car accident lawyer has gathered all the facts in the case and determined who is at fault, they will draft a demand letter, also known as an insurance claim letter. This is a professional document requesting payment or another demand that rights the liable party’s fault. In a personal injury case, such as a car accident, a demand letter presents the facts about the car accident to persuade the insurance company to submit compensation to the injured party.

Response to the Demand Letter

Once the appropriate insurance companies receive your car accident lawyer’s demand letter, they may respond in four ways:

  1. They accept your attorney’s demands and pay, which means you will receive your total requested compensation, and you will resolve the matter.
  2. They make a counteroffer. You can accept it and resolve your claim if you think it’s fair. However, your lawyer can continue negotiations on your behalf if you don’t. If you prefer, they can move your claim to court. This is where working with an experienced car accident lawyer will really help. They are skilled negotiators who know the strengths and weaknesses of your case.
  3. They deny your claim and refuse to pay any amount. While this is rare, it can occur if there is a lack of evidence or an issue with the process. If this happens, your attorney can find out why, clear up any misunderstandings, submit additional information, and start the settlement negotiation process.
  4. They don’t respond. Suppose the insurance company or other party fails to respond promptly to the letter. In that case, your attorney will guide you in the next steps. This may mean trying to contact them again or moving forward into the litigation phase.


Some negotiations can take several months or even a year. However, depending on the opinion of your car accident lawyer and the specifics of your case, they are often worth it. Negotiating a settlement allows you to potentially receive fair compensation for your losses and also avoid taking more time to go to court and the possibility of being on the witness stand, which can be very disconcerting for many accident victims.

Insurance companies are often more likely to settle than push a case into litigation because it saves them:

  • Time
  • Money
  • Potentially their reputation

In addition, negotiating a settlement gives both the injured claimant and the insurance company more control over the outcome of the case. When you work with an experienced car accident lawyer, they will likely know which insurance companies are more likely to offer a fair settlement and which ones might tempt you with litigation to get the compensation you deserve.

Accepting a Settlement

If you decide to accept a settlement, you will typically need to sign a release stating that you agree not to pursue the same claim in court in exchange for the settlement funds. By signing, you will forever give up your right to litigate the same accident with the same party. Your attorney will generally accept the funds on your behalf, subtracting their fees and any other related costs, and then cut you a check.

If more than one party is responsible for your losses, you may settle with one and go to court with another. It all depends on the details of your case and how much you are willing to settle for. This is another reason why having an attorney on your side is beneficial. You can maximize your compensation by holding all parties accountable for their negligence.

An Attorney Will Negotiate with the Insurance Company on Your Behalf

When you hire an experienced car accident lawyer, they will know what to do when you get a settlement offer. Your car accident lawyer evens the playing field because they also know what your claim is worth. Before you file the claim with the insurance company, your lawyer has also calculated the value of your claim and has come up with a better starting point for negotiations.

Once the insurance company makes the initial offer, your lawyer will evaluate it and advise whether to accept it. Most likely, the initial settlement offer will not come close to paying your expenses. Accordingly, they will advise you to reject the settlement offer. Let your lawyer protect you against negotiation traps. If insurance companies are motivated to settle the case quickly, there is likely a reason for it.

The Initial Offer Is Just the Beginning of the Process

When you reject the insurance company’s initial offer, it automatically takes it off the table. However, this should not be a cause for alarm. The initial settlement offer is merely just a baseline for beginning negotiations instead of a serious attempt to compensate you for your injuries.

If push comes to shove, the insurance company will gladly settle your claim for this amount. You should see the initial settlement offer as a placeholder for future negotiations instead of a serious attempt to settle your claim.

You can expect multiple rounds of proposals and counter-proposals sent back and forth between you and the insurance company. Insurance companies almost always settle claims this way. If they are not, there is a greater chance that you are leaving money on the table. The more valuable your claim, the longer you can expect negotiations to take.

At some point, the two parties may find a way to settle the claim. Neither you nor the insurance company wants to go to court. For you, it adds time to your case. The insurance company needs to pay litigation expenses to a defense firm because they do not have lawyers working for them on a contingency basis like you. Paying lawyers raises the insurance company’s cost of doing business, and that is very much something they prefer to avoid if possible.

How Does a Car Accident Lawyer Help Your Case?

From reading this, you should see the value that an experienced car accident lawyer adds to your case. Without one, you will be an easy mark for the insurance company.

On your own, you may not have a genuine concept of what money means in your case. You may see a settlement offer for $100,000 and think it is a lot of money. However, when that is just the amount of your past and future medical expenses, it leaves nothing left for you. If you accept that, you will end up in a bad place financially because you only get one chance to settle a car accident claim.

Your lawyer knows the rules of the road for dealing with an insurance company. They do this every day. You may never have dealt with an insurance claim before and not know how it works. An attorney is familiar with insurance company tricks, and their job is to protect you from them.

Negotiating with the insurance company requires certain degrees of fearlessness and a steady hand. When you have injuries and face financial difficulties, you cannot clearly think without emotion and fear.

While you can represent yourself to the insurance company, it is not a good idea. Settlement negotiations are all about money and how to get as much of it as possible. You need another set of eyes that has seen this all before.

Your own eyes may not see the situation clearly, without knowing what your case is worth. In the end, hiring a lawyer increases your chances of getting top dollar for your accident injuries. Your attorney will also spare you from the stress and difficulty of dealing with the insurance company.

Don’t Accept the First Settlement Offer; Contact a Skilled Car Accident Lawyer Instead

Chicago Personal Injury Lawyer Gary Annes
Car Accident Settlement Attorney, Gary Annes

While most car accident cases will settle before going to court, not all do. When you hire a seasoned car accident lawyer, they can advise whether you should accept a settlement or hold out for more compensation through litigation. Typically, it’s never a good idea to accept a first settlement offer as it will be the lowest offer made and nowhere near representative of the actual value of your damages.

Sometimes, it is more beneficial to take your case to trial than to accept a settlement that doesn’t represent the actual value of your damages. Your attorney can provide you with the best advice possible so that you can decide if a settlement or trial is right for your case. Always remember that you cannot trust an insurance adjuster’s word about what is best for your situation. Instead, seek help from your own legal advocate.

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David Abels


David Abels has carved a niche for himself in the personal injury law sector, dedicating a substantial part of his career since 1997 to representing victims of various accidents. With a law practice that spans over two decades, his expertise has been consistently recognized within the legal community.

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