The Reasons For Low Insurance Settlement Offers

So you were in an accident. Luckily, you escaped with minor injuries, albeit with a hefty bill to pay in damages. Just when you thought you were in the clear, thanks to your insurance policy, you unexpectedly get hit with an extremely low first settlement offer. An offer not even enough to pay for one day of your hospital bill. This leaves you in a very vulnerable (and common) position, especially for accident victims. Do you just accept the money or fight for what you deserve? Below are four common reasons why this situation is not as uncommon as it seems.

Insufficient Facts

In most cases, the insurance adjuster might just happen to miss or overlook important documents or facts that could affect the final analysis of the situation. It could be possible that they do not possess the relevant medical records and bills to back up your claim as well. If you realize that this has happened, do not worry. Simply call the insurance adjuster and ask what they had considered when determining their first settlement offer. If the offer is missing any documents, provide the relevant records and bills so that the insurance adjuster can analyze your claim again.

Automated Processing of Claims

With the sheer volume of claims that come through every day, insurance companies may sometimes struggle to manually consider each claim. They thus rely on algorithms to sort through the claims in other for them to pick out the ones that are unique and require their expertise. These algorithms work by comparing your claim to other claims, grouping them, and providing a settlement accordingly. However, each claim has unique factors such as the impact on one’s mental health, which cannot be considered by computer software. Thus, appealing would benefit you the most as it offers the chance to be re-analyzed by an insurance adjuster.

No One-Size-Fits-All Approach

There could be a large number of reasons for a low settlement. Examples include not having a lot of damage to the vehicles involved in the accident, having pre-existing injuries to the parts of the body that were injured in the accident, as well as large gaps in the medical treatment due to long waiting times at public hospitals. These reasons are all valid, albeit complex. To best address these uncertainties, you should talk to your insurance adjuster to ensure that you understand their reasoning and you are able to attend to them immediately.

Too Many People Take the Bait

Lastly, many people who have applied for claims have accepted the first low settlement due to a variety of reasons. Some examples include not knowing that they deserve more, or that they were in desperate need of money to foot some important bills. With that being said, insurance companies are thus inclined to offer a low settlement at first to gain profit. However, this does not mean that you will not be able to plead your case again. Ensure that you have all your relevant documents or consider hiring a public adjuster before appealing your case to yield the best possible results.


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