The hospital that provided your treatment and the mechanic working on your vehicle won’t wait for months before sending you bills or turning your account over to collections. They expect you to make good on your financial responsibilities quickly.
However, especially if you get hurt, a car crash will likely mean a disruption to your household income. You may not be able to work and earn income while you also have to worry about paying to fix your vehicle and for the treatment you received for your injuries.
When you hear from the insurance adjuster for the other driver’s policy and they offer you a settlement, you might feel relief. Unfortunately, accepting an early settlement offer is a common mistake. What is the risk of accepting the first settlement offered by the insurance company?
You don’t yet know your true costs
You probably have an estimate from your mechanic and a stack of medical bills, but there is no certainty yet regarding the full financial impact of the crash. How many days of work will you miss? How much future medical care will you require? Will your vehicle still command the same price when you resell it, or will you have to absorb its diminished value?
Unless you have invested time in reviewing your circumstances and partnered with a professional, you may not yet understand how much the crash will cost you. You could accept a settlement that is not nearly enough for your total costs.
You can’t ask for more after agreeing to the settlement
The reason you need to know what the crash will truly cost is that a settlement officially absolves the insurance provider of obligations to you. They will typically offer a settlement that is below the policy limits, meaning that they will save money because they won’t pay the maximum amount possible.
If you accept that settlement offer and then later have other bills you need to pay, you won’t have the option of asking the insurance company for more support. Unless you pursue a bad faith insurance claim in civil court, they will have no obligation to provide you with additional compensation when you sign a settlement agreement or cash a settlement check.
Especially if you suffered serious injuries or your vehicle was a total loss, you may need to negotiate the terms of your settlement to ensure that they are appropriate and fair. Recognizing the risks involved when evaluating a car crash insurance settlement will help you get an appropriate amount of compensation for the wreck.