How to Evaluate Insurance Claim Settlement Offers


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Insurance claim settlement offers are rarely ever easy to read and understand. To protect themselves against the offer being used as evidence in a later lawsuit, insurance companies will often not explain their reasoning or include confusing legal terminology and disclaimers in the offer. Interpreting an insurance settlement is made easier by analyzing it in light of a few factors.

Consideration: The Sufficiency of the Offer

An insurance settlement offer might be less than you anticipated. However, this does not mean that it is a bad offer. Sometimes, an insurance company will explain the reasoning behind their valuation, but if not you must do so on your own. To do so, calculate the total amount of your current or previous expenses and compare it to the amount offered. If the amount offered falls short of these expenses, it probably is not a sufficient offer.

Consideration: Future Expenses

If you have claimed need for future medical expenses, ensure that the offer includes payment for them. If the company does not explain the valuation they placed on the different aspects of your claim, check to see if after your current and previous medical and other expenses are paid for you will still have money left over for your future care. If not, the offer is most likely insufficient.

Consideration: Payment Terms

Settlements can be paid in many different ways as long as both parties agree to the terms of payment. Structured settlements, periodic payments and lump sum payments are the most common in settlement negotiations. A settlement offer that does not include the method of payment is not a bad offer, but should be revised to reflect the payment terms. To do so, contact the insurance company and inquire about what methods are acceptable to them; from that list choose the one you would prefer and ask that the insurance company amend the offer to reflect the payment type.

Consideration: Future Claims

Most settlement offers state that acceptance of the offer is a waiver of any future claims for injury or damage stemming from the accident. This means that the injured party can thereafter not proceed for additional compensation from the insurance company. Seriously consider whether the offer is sufficient enough to make it unlikely that you will be in need of future funds and want to again file a claim against the company.

Getting Legal Help

If you have been offered a claim settlement and are unsure whether to accept it, consider seeking legal assistance. An attorney will review the offer and its terms, compare the offer to your claim and advise you about accepting the offer.

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