What Does It Mean if You Get a Low Insurance Settlement Offer? 2024

We often get a ridiculously low settlement offer from an insurance company that forces us to take the case to trial, where we may get many times more money. But why do insurance companies make low settlement offers?

Does a Low Settlement Offer Mean I Don’t Have a Good Lawyer?

Insurance companies frequently make a low settlement offer, and sometimes even a ridiculously low settlement offer. But it doesn’t mean you have a bad lawyer.

While a low settlement offer may be made because your lawyer is known for settling cheaply or because your lawyer did not provide all of your medical records, it is more often because that’s what insurance companies do.

The amount of an insurance settlement offer usually has nothing to do with your personal injury lawyer. It just means that the insurance company doesn’t want to settle, or at least not now. Even the best personal injury lawyers get low settlement offers all the time.

A Low Settlement Offer May Be Made for Many Different Reasons

A low-ball settlement offer from an insurance company may mean that the company does not believe the claim is worth much or that the claims representative believes there are serious questions about their insured’s liability or the alleged injury.

Frequently, the insurance claims representative doesn’t understand the legal aspects of their insured’s negligence and liability.

Also, the insurance claims rep frequently doesn’t understand the seriousness of the plaintiff’s injury. Claims reps are not doctors, but they often think they know a lot more than they do.

Sometimes, a new or inexperienced claims representative is trying to resolve the claim quickly and cheaply for reasons known only to the insurance company.

Insurance companies will look at the financial background of the injured claimant and will sometimes make a lowball settlement offer because they think the injured claimant needs the money.

When we get a low insurance settlement offer, we immediately file a lawsuit which results in a new claims representative being assigned to the case.

Sometimes, a client gets caught on video doing something that will result in the insurance company making a low offer, even if the video may not affect the trial.

We had a client who was followed by an insurance investigator and caught on video surveillance quickly walking up a long escalator in a New York City subway. She walked up past other people standing on the escalator, and she was then seen on video running from the top of the escalator to catch a taxi.

She could have testified at trial that she has good days and bad days, and that was one of her good days. That when she feels good and overextends herself, she has a really bad day the next day. Although a jury may have accepted that, the insurance company thinks it has an Aha! moment and made a low offer which they refused to increase.

Does My Lawyer Have to Tell Me About a Settlement Offer?

Your personal injury lawyer must tell you about every settlement offer an insurance company offers, even a ridiculously low settlement offer, even if only $1.00.

Do I Have to Accept a Low Settlement Offer?

No, you never have to accept a low insurance settlement offer or any settlement offer.

What Can I Do When an Insurance Company Makes a Low Settlement Offer

When the insurance company makes a low settlement offer, you can choose to:

  1. Accept the settlement offer.
  2. Negotiate for a higher amount at the time the low settlement offer is made.
  3. Wait to negotiate a higher amount after you get more medical treatment.
  4. Wait to negotiate a higher amount after your deposition and defense medical exam.
  5. Wait to settle a couple of months, weeks, or days before a trial when you will usually get the highest settlement offer, or
  6. Have your personal injury case heard by a jury at a trial.

Most of the time, when an insurance company makes a low settlement offer, they will increase their offer later during the case. Often, an insurance company will increase its offer many times.

Read how long it can take for a personal injury case to get to trial in New York. You can also see a visual timeline of a personal injury case in New York.

If you can’t wait for a better insurance settlement offer because you need money, you can get money up-front from a lawsuit cash advance company, so you can wait for a better insurance settlement offer. You can even get money automatically every month to pay bills.

How a Cash Advance on Your Settlement Can Get You a Lot More Money

We had a client who was out of work when he broke his thumb in a construction accident.

He couldn’t wait for us to get a better settlement offer because he didn’t have the money to pay his rent. Instead of taking a low settlement offer, we got him several cash advances over the course of his case, so he could pay his rent and other bills.

The cash advances allowed him to give us the time to settle his case for $1,200,000.

When you get a large settlement like that, you need to plan for the future so you’ll have money for the rest of your life. See how you can make a large personal injury settlement last a lifetime.

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GEICO Forced Us to Trial By Making a Low Settlement Offer, and They Got Clobbered

GEICO’s settlement offer was only $10,000 for our client’s torn meniscus with arthroscopic surgery. GEICO never increased its settlement offer for four years and then offered an equally ridiculous settlement offer of only $20,000.

Because of GEICO’s ridiculously low settlement offer, we took the case to trial in Nassau County Supreme Court in New York.

Just before the trial started, in the hallway in front of the courtroom, the GEICO claims representative increased the settlement offer to $100,000. We declined the offer and proceeded with the trial.

The jury awarded our client $465,000 for his serious injury.

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GEICO Was Found to Have Acted in Bad Faith

A few weeks before writing this, GEICO was ordered to pay over $2 million because of their bad faith refusal to settle a case fairly.

A motorist, whose car “flipped up in the air into a power pole” when struck by a car insured by GEICO, had $10,000 in medical bills. The motorist’s lawyer offered to settle with GEICO for the $30,000 insurance policy, but GEICO refused and offered only $12,409.

A judge issued a judgment in the amount of $2,916,000, and the defendant filed for involuntary bankruptcy. But GEICO hired a lawyer to fight the bankruptcy petition!

Since GEICO’s insured would obviously benefit from the bankruptcy, GEICO’s motivation to fight the bankruptcy could only have been to protect itself so GEICO could not be sued by the trustee in bankruptcy for their bad faith failure to settle the injury claim if the involuntary bankruptcy proceeded.

GEICO’s lawyer was not successful in stopping the bankruptcy, and the trustee in bankruptcy sued GEICO in US District Court. The federal jury found GEICO liable for $2,020,342

GEICO will likely appeal the order, but it’s going to cost GEICO a lot of money. I hope the attorneys don’t settle and let it go to appeal.

This case illustrates the frustration that personal injury lawyers frequently have with insurance companies.

Bad faith claims are difficult in New York State, but we have made insurance companies pay above the insurance policy.

See more FAQs

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Phil Franckel is a well-known personal injury lawyer in New York since 1989. He is a Founding Partner of 1-800-HURT-911, LLP®, the Personal Injury Dream Team™, and a former Member of the Board of Directors of the New York State Trial Lawyers Association. He has an Avvo Top 10  Rating, Avvo Client’s Choice Award with all 5-star reviews, Avvo Top Contributor Award, Multi-Million Dollar Trial Lawyers Award, and others. See Mr. Franckel’s bio for areas of expertise.

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Philip L. Franckel, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York; He has a 10 Avvo rating; Avvo Client’s Choice with all 5-star reviews; Avvo Top Contributor; and a former Member of the Board of Directors of the New York State Trial Lawyers Association.

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