Should You Accept a First Insurance Settlement Offer?

Jeff Varcadipane

May 12, 2022

Should You Accept a First Insurance Settlement Offer?

If you have ever received a first insurance settlement or been involved in an accident, then you know the process of settling a claim can be a long and tedious process. In New Jersey, insurers are given 10 days from receiving a claim to open an investigation.  

In this way, there are specific timelines that insurance adjusters need to abide by:

  • First-party claims: 30 days from receipt of the claim to investigate and issue a payment
  • Third-party property damage claims: 45 days from receipt of the claim to investigate and issue a payment
  • Third-party bodily injury claims: 90 days from receipt of the claim to investigate and issue a payment

These timeframes encompass the insurance adjuster investigating the claim, filing all the necessary paperwork, and issuing a payment to the insured.

During this process, the claims adjuster working on your case might offer a settlement. But you should never accept the first settlement offer without speaking to an insurance claims attorney. The Civil Litigation attorneys at Varcadipane & Pinnisi, PC, understand the difficulty of negotiating with insurance companies and are here to help you.  

How Do Insurance Adjusters Calculate a First Settlement Offer?

An insurance adjuster takes into account a variety of factors when deciding on a first settlement offer. So, the claim is opened after the claimant (person filing a claim) submits a demand letter. This letter details the underlying accident and requests a specific resolution for the claimant’s losses. In addition, this should also detail lost wages and any medical bills as a result of the accident.

Only after the adjuster has reviewed all the documentation and spoken with the insured will they consider the following factors in determining their initial offer:

  • Special Damages: lost wages, medical bills, home aid devices, and any other expenses
  • General Damages: pain and suffering, loss of consortium, and any other intangible losses that cannot be given a monetary amount
  • If the case moved to trial and the claimant won, what would the jury award the claimant in damages?

The first offer made by the adjuster is normally only a percentage of what they think the claim is possibly worth. Often, the first offer is roughly 40% of the value of the case.

The insurance adjuster expects that the initial offer will be rejected. So, it is their duty to offer a low amount in their effort to save the insurance company money.

Why Should You Reject a First Insurance Settlement Offer?

Never reject a first settlement offer without discussing your situation with a dedicated insurance claims attorney.

An insurance company’s first offer rarely accounts for future expenses and long-term care needs. It is difficult to accurately calculate future lost wages since you are still recovering from your injuries.

An adjuster may even try to rush the negotiation process by offering a settlement amount before you have time to be examined by a doctor. Once a doctor’s medical evaluation has been submitted into evidence, depending on the severity of the injuries, the insurance company may need to increase its offer.  

Additionally, if more compelling evidence comes to light, then the claimant may be advised by their attorney to move to trial. Historically, juries award victims substantial amounts of money and will even compensate them for pain and suffering. 

Be aware that the New Jersey Department of Banking and Insurance oversees the insurance industries in a professional and timely manner to protect consumers.  It is wise to have your attorney communicate with this department if they are needed.  

Reach Out to a New Jersey Insurance Claims Attorney

Communicating with insurance companies requires knowledge of the industry and seasoned negotiating skills. You need an aggressive insurance claims attorney to defend your rights.  Contact us today at Varcadipane & Pinnisi, PC, to schedule a free consultation.

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