5 Reasons Why Insurance Companies Push For Quick Settlements in Personal Injury Cases

If you ever suffer a personal injury and file a claim, you might be surprised at how fast the insurer responds. But they won’t make contact to see how you’re doing or to wish you well during the recovery process. Rather, it’s more often than not about tabling an offer to settle the case.

In some instances, this may happen before you fully understand the extent of your injuries. While this may seem like good news at first glance — after all, who wants to wait forever for a settlement? — signing on the dotted line before thinking things through can be a big mistake.

That’s one reason to retain the services of a personal injury lawyer when you need to file a claim. Your lawyer will do the talking and ensure the insurance company doesn’t pull a fast one on you by trying to compel you to accept a lowball offer.

Keep reading to learn about five reasons insurers make fast offers in personal injury cases. Again, you can simplify things by hiring a reputable lawyer to advise and represent you.

1. To Limit Financial Exposure

Insurance companies are businesses. Their first priority is to protect their profits. The more time that passes during injury claims, the more they know that their financial liability increases.

The injured party’s medical expenses can grow. So, what began as a minor injury can turn into physical therapy, specialists, or even surgery. Lost income can also accumulate if the injured party takes longer to heal than expected.

By making a fast offer to settle the injury case early, insurance companies aim to settle the case before they know the true extent of their liability. If you’re the injured party and accept a fast offer by the insurer, you won’t be able to sue later on for more damages if your condition worsens.

2. To Take Advantage of Financial Pressure

Individuals involved in accidents often face financial hardship in the immediate aftermath. Medical expenses can pile up quickly. Income flows can stop. And living expenses will continue.

The insurance company takes note of this. Making a timely settlement offer can appear to be a beacon of hope in hard times. The only drawback of this approach is that early offers are not as high as the case may ultimately be worth. The insurance company’s representative may table what they believe to be a reasonable deal. But it may turn out to be inadequate in the long run.

It’s always a better idea to let your personal injury lawyer go to bat for you and increase your odds of a better overall outcome.

3. To Minimize Investigation and Evidence Development

The more evidence that comes to light, the more well-rounded a personal injury case becomes.

That said, the insurer won’t necessarily see the gathering of more and more evidence as in its best interests. I’ll want to settle early before more evidence comes to light.

At the beginning of a case, the injured party may not have all the information needed. If you file a claim and don’t have sufficient evidence in the immediate aftermath of the accident, you might be more likely to settle for less than would otherwise be the case.

4. To Avoid Litigation Costs

If negotiations fail to reach a settlement, a personal injury claim can proceed to court. New costs for insurance firms arise from the legal process, which include attorney fees, expert witness fees, court fees, and administrative costs.

There’s also unpredictability associated with trials. The jury may return a verdict substantially higher than the insurer anticipated paying. Rapid settlements can, therefore, help insurance companies avoid the costs and uncertainties associated with trials.

5. To Close the Claim Before Injuries Fully Develop

Injuries don’t always develop immediately. In the initial days following a serious accident, the injured party may think to themselves that they’re only slightly hurt.

An insurance adjuster may, meanwhile, offer a small settlement based on this initial assessment.

If the injured party settles and later needs additional medical treatment, they can’t reopen the case. The settlement will include a release of liability, meaning the insurance company won’t be responsible for any further payments.

Encouraging a rapid settlement before the full extent of the injuries is known serves the interests of the insurance company, not the injured party.

For insurance companies, the motivation for a quick settlement is multifaceted. It’s a strategic move to limit financial risk, use financial pressure to their advantage, and more.

For the victim of a personal injury, it’s important to recognize these motivations to avoid costly mistakes. While a quick settlement may be attractive, particularly in difficult circumstances, it’s more important to be patient and carefully evaluate the settlement offer.

Personal injury claims involve more than just current medical expenses. They involve the ability to get compensation and get back on one’s feet.

While it’s important to consider the injury’s immediate effects, taking the time to carefully evaluate the long-term implications can be key to a successful decision.

Hiring a personal injury lawyer can level the playing field so you don’t get tricked into accepting a bad offer.