It's Not Unusual For Insurance To Offer Low Settlements
Michael Babboni
Insurance Coverage
Insurance policies exist for two reasons. The first is to provide policyholders with the peace of mind that comes from knowing there's financial support in the event of an emergency. The second is to make it possible for the aftermath of accidents to proceed smoothly, which is one reason why drivers legally require insurance if they want to continue to operate their vehicles.This becomes especially important in the event of serious accidents that can result in injury. After all, if you're living and working in Florida and get into an accident where someone else is at fault, you shouldn't have to worry about settling your medical treatment costs.
However, even if the insurance company you're dealing with agrees that you're entitled to compensation, that's not necessarily the end of the story. It's not uncommon for insurance companies to take responsibility but then offer a settlement that's far lower than what you deserve to get back on your feet. Why does this happen? There are several reasons.
Profitability
Of course, the underlying reason for any business to make any decision is to maintain profitability. Insurance companies need to make money, too, just like any business. So they are reluctant to be generous with the payouts and settlements since this is a direct black mark on their bottom line for the year's financials.
As with any business, insurance companies will try to save money whenever and wherever they can. And if they think they can get away with paying you less, they'll give it a try.
Ignorance
Unfortunately, in some cases, insurance companies rely on the ignorance of others to get away with offering lower rates. Often people will accept a settlement simply because the offer was made at all. Or they believe that the initial offer is the only offer that will be made, and they don't think they can afford to refuse. It's not unusual for some people, especially those without a lot of savings, to look at the time and money that would be lost by trying to dispute an offer. So they accept because they believe too little money is better than a long, drawn-out fight.
Lack Of Legal Representation
In a similar vein, insurance companies have traditionally gotten away with lower settlement offers because, statistically, few people are willing to challenge it with legal representation. Of course, bringing a lawyer into a settlement offer can quickly turn the tide on an insurance company's initial amount. Still, more often than not, people are unwilling to go to these lengths. The insurance companies rely on that reluctance to get lower amounts accepted.
The Situation Is Not Correctly Assessed
In some cases, a lower settlement will arrive due to a lack of accuracy about what happened. For example, certain statements you erroneously made on the scene, or in social media, or even things that an insurance adjuster wasn't aware of during the assessment can all affect the final amount offered.
If you feel that an insurance settlement is unsuitable for what you need to recover, you can get help. First, talk to a personal injury attorney about your situation and find out how to change course.