Insurance companies often try to get an injured party to settle early before an attorney is on the case and before the injured party knows the extent of the injury. The insurance company will offer a minimal amount, say $500, and try to talk the injured party into accepting this as full and final payment within weeks of the accident. The insurance company will have the injured sign a release of all claims. It may be nice to have $500 and not have to pay an attorney but this practice has serious consequences.
Usually the injured party after a few weeks has no idea of the extent of his or her injuries. The release will mean if you are continuing treatment or still in pain months later it is more likely than not the case is over. There are exceptions but generally the insurance companies do this because the release will be upheld. This means if you settled for the $500 but months later discovered you needed neck surgery you are probably not going to be able to re-open that case. That is a horrible result and a real reason to make sure of the extent of the injury before trying to resolve the case.
A second reason the insurance company is offering those funds is that the injured party really doesn’t know the value of the case. The insurance company’s handle millions of cases; they know the value and will always try to undercut the value. This is at the injured party’s expense.
Finally, the insurance company may prey on the injured party’s financial situation. The car is wrecked, you can’t work, doctor bills are mounting – here comes the insurance company with a check. Maybe not much but it could help.
Avoid an early settlement. If you find yourself in this situation, consult with an attorney before ending your case too soon.
