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Why do insurance companies give lowball offers?

On Behalf of | Aug 28, 2023 | Bad Faith Insurance

Being involved in an accident can trigger lots of uncertainty. If you are an accident victim, you may be entitled to compensation for the resulting damages. And this is where the insurance company comes in. 

But it’s not uncommon for the insurance company to act in bad faith by offering a settlement that is way too low. This is known as a lowball offer. But why does it happen?

Here are three common reasons why the insurance company might offer a lower settlement amount than you deserve. 

To “buy off” your right to the settlement you deserve

In accepting a settlement offer, you are almost always closing the door to any further claim relating to the accident and injury in question. This sort of “release agreement” is the insurance company’s way of getting off the hook as far as your case is concerned. Thus, should you later discover that your injuries are worse than you originally thought, you may not come back to the insurance company for additional compensation. 

Lack of facts regarding your case

If the insurance adjuster overlooks or misses critical facts regarding your claim, they will barely recommend a fair settlement. This explains the importance of seeking treatment ASAP and making an effort to gather and preserve as much evidence as you can following the crash. It also explains the importance of calling the police to the accident scene as soon as possible and obtaining a police report. Remember, insurance claims are legal matters, and proper evidence can make all the difference. 

Insurance adjusters are always on the lookout for anything they can use to deny or reduce your settlement amount. From statements you give to the adjuster to missed hospital appointments, social media activity and lack of consistency in your story, a lot can go wrong while dealing with the insurance adjuster. As a rule of thumb, never talk to the insurance company alone. 

A car accident can turn your life upside down. Understanding your rights can be a great place to start when seeking a fair settlement from the insurance company.