When to accept a compensation offer
As you progress through a personal injury claim, you may find that the insurance company makes a low first offer in the hope that you will accept it and avoid progressing your claim.
In some cases though, insurance companies might make a higher first offer and then reduce it as the case goes on.
So how do you know whether to accept the first offer, wait for a better second offer or progress the claim even further?
How early should you settle your claim?
If you have instructed a personal injury solicitor to manage your compensation claim, then you may receive the offer during the claims process via your solicitor. If you choose to deal directly with the other party’s insurance company or other representatives then you will likely receive a compensation offer directly.
However you are pursuing your claim, you are free to accept an offer and settle the claim as and when you receive one.
If you are working with a solicitor then it is advisable to seek their advice, as they will make sure your compensation offer is fair and representative of the pain, suffering and losses you have incurred due to your injury.
- Personal injury claims process
- Personal injury claims payout guide
- Under-settled personal injury claims
There are a few naughty insurance company tactics that you need to be wary of when pursuing a claim for compensation.
The insurance company naturally wants to spend as little as money as possible on claims, so will sometimes attempt certain strategies to convince you to settle your claim early for less than it is potentially worth.
We’ve highlighted some of the more common tactics we come across when dealing with claims below…
Compensation offers before a medical
Sometimes an insurance company will make an immediate offer to settle before they have even seen any medical evidence of your injury.
This means making an offer before any official confirmation of:
- The extent of your injury
- What treatment you required at the time, and what ongoing treatments you may require
- Your prognosis for ongoing care
- Your financial losses e.g. loss of earnings
It may seem counter-productive for the insurer to do this, but it helps them keep the costs of the claim down as they assume an early offer will be accepted by the Claimant to avoid a long, drawn-out legal case. However, this tactic has been criticised in the past – and your personal injury solicitor is certain to advise you not to accept a pre-medical offer.
Early compensation offers
Even if you have had a medical report, you usually won’t know for sure how long you may take to recover – and what added costs and expenses you may incur (e.g. loss of earnings, travel costs, rehabilitation costs etc.)
Being offered compensation when you’ve just suffered an injury or been made ill is often the insurance companies way of trying to tempt you to settle your claim and save them money – so the offer will rarely be worth the potential claim value.
Accepting an early compensation offer should therefore be seen as taking a gamble, as:
- If you recover from your injury sooner than expected, you could be better off
- If your recovery takes longer than expected, you could be significantly out of pocket
So it may be tempting to accept an early offer, but it is almost always advisable to negotiate further. This is where a personal injury solicitor adds value when dealing with your claim. Expert solicitors will be:
- Familiar with the negotiating tactics used by specific insurance companies
- Be able to demonstrate to the insurer your intention to proceed the claim to court if need be
- Offer professional assurance as to the level of compensation you can expect
Giving misleading advice
A common tactic we often see is insurance companies ‘advising’ Claimants not to instruct a solicitor.
They will inform the Claimant that they will receive more compensation if they don’t instruct their own solicitor, which is simply not true.
This tactic is designed to try to convince the Claimant to accept an early offer rather than negotiating further and even taking the case to court, as this is likely to be more expensive for the insurance company.
Offering the services of a ‘panel’ solicitor
Similar to the above tactic, insurance companies sometimes offer Claimant’s the services of one of their panel of solicitors.
As these solicitors have an agreement with the insurer and are beholden to them for ongoing work, there is a clear conflict of interest which may result in the Claimant not receiving the right level of independent advice from their solicitor.
When is the best time to settle a claim?
As all claims involve different people with different circumstances, there is no one-size-fits-all approach to settling the claim. That’s why it is important to instruct an experienced solicitor to handle your claim and make sure you get the compensation payout you are entitled to.