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Should I Accept a Car Accident Settlement Offer?


People who sustained injuries in a car accident due to another driver’s negligence are typically entitled to compensation. The compensation will usually cover both economic losses as well as non-economic losses such as emotional pain and psychological trauma. When the court discovers that the other driver acted maliciously, the victim may also be awarded punitive damages.

“Some defendants may want to avoid the stress of formal litigation and may elect to settle outside the court,” says car accident lawyer Amy Gaiennie of Amy G Injury Firm. “While time is certainly a consideration, it is essential to carefully consider a settlement offer and assess the extent of possible losses that may arise from the injuries sustained.”

A defendant’s offer may seem fair and enticing. However, It is ideal to work with a meticulous attorney to provide needed legal guidance to avoid accepting a lower settlement offer.(1)

Things to Consider Before Accepting an Offer

Before accepting a settlement offer from a defendant, it is crucial to consider the following factors:

#1. The Severity of the Injuries Sustained

Filing a lawsuit can have significant cost implications for you. You will be required to pay for the services of a lawyer and possibly go through the stressful process of filing several documents.

It may be ideal to go through the case process if the injuries sustained are substantial and the defendant is offering an amount that is way below what you estimate the court would award. However, if the injuries are minor, it may be best to consider the settlement offer.

#2. The Settlement Amount Offered

The settlement amount the defendant is willing to pay should be able to cover the losses incurred. This includes medical bills, the cost of repairing vehicles, lost wages, and possible impacts on future earnings where the victim sustained injuries resulting in long-term disabilities.

The importance of an attorney in arriving at a settlement amount cannot be overemphasized. Estimating potential future damage can be challenging, especially when the victim has not yet made a considerable recovery. It is, therefore, critical to hold on until the victim attains stability before accepting an offer.

#3. The Loss of Earning Capacity is Covered

Depending on the extent of the injury sustained and the nature of the victim’s job, they may not be able to continue with their previous jobs. Therefore, before accepting the defendant’s offer, you may need to consider the impact of the injuries on your earning capacity and ensure the amount offered will make up for any loss of earnings in the present and possible future.

#4. Does the Offer Cover Non-Economic Damages?

The court will award economic damages for the pain suffered from the injuries if you decide to take the case to court. Therefore, it is crucial to see if the offer provides for non-economic damages.

Sometimes, accident victims may go through depression and intense trauma that would require them to undergo therapy. In that case, the offer amount should cover the expenses incurred in this situation.

#5. The Negotiation Outcome

Some automobile accident victims accept the insurance company’s first offer. This is not ideal as insurance companies naturally want to pay the minimum possible amount. Individuals who negotiate the settlement amount are more likely to receive higher compensation than those who do not.

If the offer is after a series of negotiations, you may consider accepting it. If the settlement offer is the first the defendant makes, you should think twice before taking it.

#6. Was your Lawyer Involved in the Negotiation?

Imagine you negotiated directly with the insurance company without your lawyer. In that case, there is a possibility that the amount you are being offered may not be the best you can get.

It is therefore vital to involve your lawyer in all the negotiations and follow their counsel.

#7. Can You Get More If You Go to Trial?

One of the reasons people accept to settle outside the court is to avoid the stress of litigation. Filing a lawsuit may mean waiting months and sometimes years to get the settlement amount. Many victims may not want to wait that long and accept whatever they are offered.

However, before accepting any settlement from the defendant, find out if you are likely to get more if you file a lawsuit based on the severity of the injuries sustained. Going to court favors the victim because there is a higher potential of being awarded better compensation than the amount the defendant offers. Please discuss this with your attorney as they are in the best position to advise you on what is best in your case.

Benefits of Out-of-Court Settlement

Here are some benefits of settling your accident case outside of court.

  • Fewer cost implications: although you may not be required to pay the lawyer upfront, you may have to pay for their services if you win the case. However, taking the case to court means more work which will invariably increase your expense
  • Privacy: once your case goes to court, it becomes public knowledge. If, however, you want to keep things private, an out-of-court settlement may be the way to go
  • Out-of-court settlements are final: there is a closure that comes with the finality of settling outside court. On the other hand, cases that are taken to court can be appealed and dragged for years before reaching a final verdict
  • Predictability: settlements are predictable and can be more easily controlled than formal litigations.

Bottom Line

If you have a personal injury case and want to settle with an insurance company, it is best to work with an experienced attorney.

While you may be in a hurry to get compensation to pay your medical bills and other expenses, you must carefully consider your options before accepting a settlement offer from a defendant. (2)