Should I accept the first offer?
As a general rule, you should not accept the first offer the insurance company gives you. I recommend negotiating after receiving the first offer to see if they will reconsider. With that said, I do not wish to give legal advice applicable to all situations, as that would be irresponsible, so please talk to an experienced personal injury lawyer about the facts of your case before deciding the best strategy.
Insurance companies employ adjusters to try to settle cases prior to the filing of a lawsuit. These adjusters are trained to settle the case for as little as possible. The methods used by each insurance company to accomplish this task vary. The thing they all have in common is the use of algorithms to assess the insurance company’s risk on the case. Some insurance companies use the medical billing codes on itemized billing statements to compare to other, similar, accident cases. Others use large databases, such as Colossus, that assess the probability of a settlement on a high range and a low range for each case. They are in the business of assessing risk based on probabilities.
Whatever method is used, adjusters will be given a range of case values. The first offer made is usually on the low end of this range. The insurance company hopes that you will either 1.) be anchored to this value and be less willing to fight for substantially more; or 2.) think you have to accept this offer. This is particularly true with offers made by adjusters assigned to unrepresented accident victims. Insurance companies know this works. This is why they often employ two sets of adjusters; those that work with unrepresented people only and those that work with attorneys.
Adjusters are often given bonuses for settling their assigned cases under the amount they are given to work with. If they believe your case is not as large of a liability to the insurance company as their other cases, you will not be likely to receive a high offer. It will be up to your experienced personal injury lawyer to show them why your case deserves more.
Depending on their experience, some adjusters may not be authorized to settle cases over a certain value without getting authority from their supervisor. In these situations it is best for the lawyer to make the case to the supervisor directly. The adjuster will unlikely be the client's best advocate with the supervisor.
An experienced personal injury attorney should be able to advise on the fairness of the amount offered. I usually advise against accepting the initial offer if it is less than what I believe to be fair. Even if the insurance company does not increase their offer, there is no harm in going back and asking for more money. More often than not this leads to a higher offer, even if it is slightly more than the initial.
Any lawyer can settle a case. Only good lawyers can add significant value to a case. This is yet another reason why it is best to hire a personal injury lawyer rather than a "jack of all trades" lawyer. The Gerring Law Firm has a proven track record of adding value to cases by settling for more than initially offered. While we cannot perform miracles by making average cases worth millions, we can tirelessly work to make sure that no settlement is made until all facts have been considered and all arguments have been exhausted. If we can't persuade the adjuster, we will file a lawsuit and try to persuade a jury.