After an accident or injury, you may receive a settlement offer from the at-fault party’s insurance company. While it may be tempting to accept the offer and move on, the initial settlement offer is often lower than what you deserve. If you believe the offer doesn’t adequately cover your damages, you have the right to reject it. But what happens next?
In this article, we’ll explain what happens when you reject a settlement offer, the steps you can take afterward, and how to negotiate a fair settlement that fully compensates you for your losses.
1. Why Would You Reject a Settlement Offer?
Before diving into what happens after you reject a settlement offer, it’s important to understand why you might choose to reject it in the first place. Insurance companies often aim to settle claims quickly and for the lowest amount possible, meaning their initial offer may not reflect the full value of your case.
Here are some common reasons to reject a settlement offer:
- The offer is too low: The offer doesn’t cover all of your medical expenses, lost wages, and other damages.
- Future medical costs aren’t considered: The offer doesn’t account for ongoing or future medical treatment you may need.
- Non-economic damages are ignored: The offer doesn’t include compensation for pain and suffering, emotional distress, or loss of enjoyment of life.
- You haven’t reached maximum medical improvement (MMI): You’re still recovering from your injuries, and it’s too early to determine the full extent of your medical needs.
- Liability is in dispute: You believe the other party is fully responsible, but the settlement offer reflects shared fault.
Why it matters:
Rejecting a low settlement offer allows you to pursue a higher amount that better reflects your total damages, but it’s important to know what comes next.
Key takeaway:
You may reject a settlement offer if it doesn’t fully cover your losses, including medical expenses, lost wages, and non-economic damages like pain and suffering.
2. What Happens After You Reject a Settlement Offer?
Once you reject a settlement offer, the negotiation process continues. The steps that follow depend on whether you’re able to negotiate a higher offer or if the case needs to proceed to litigation. Here’s what you can expect after rejecting a settlement offer:
A. Counteroffer and Continued Negotiations
After rejecting the initial offer, you or your lawyer can present a counteroffer that reflects the true value of your damages. In most cases, negotiations will continue between your lawyer and the insurance company, with both sides making offers and counteroffers until a fair settlement is reached.
During this phase, your lawyer will:
- Present evidence of your medical expenses, lost wages, and other damages to justify the higher settlement demand.
- Negotiate on your behalf to ensure that the settlement reflects the full value of your case.
Timeline: This process can take weeks or even months, depending on how close both sides are to reaching an agreement.
Why it matters:
Negotiating a fair settlement is crucial for ensuring that all of your damages are fully covered, including medical costs, lost wages, and pain and suffering.
Key takeaway:
After rejecting a settlement offer, negotiations typically continue, with your lawyer presenting a counteroffer and working to secure a higher amount.
B. Filing a Lawsuit (If Necessary)
If negotiations stall or the insurance company refuses to offer a fair settlement, your lawyer may recommend filing a lawsuit. Filing a lawsuit doesn’t mean your case will go to trial immediately. In fact, many cases still settle out of court after a lawsuit is filed.
Filing a lawsuit can be an effective strategy to:
- Pressure the insurance company to increase their settlement offer.
- Show that you’re serious about pursuing the full value of your claim.
- Bring the case before a judge or jury if a settlement cannot be reached.
Timeline: Filing a lawsuit can add several months (or longer) to the process, as it may take time for the court to schedule hearings or a trial.
Why it matters:
If the insurance company refuses to negotiate in good faith, filing a lawsuit may be necessary to pursue the compensation you deserve.
Key takeaway:
If negotiations fail, your lawyer may file a lawsuit to pursue your claim in court, though many cases still settle before trial.
C. Discovery and Evidence Gathering
Once a lawsuit is filed, the case enters the discovery phase, during which both sides gather evidence to support their claims. This may include:
- Depositions: Testimonies from witnesses, medical experts, and other parties involved in the case.
- Interrogatories: Written questions exchanged between both sides to gather information.
- Document requests: Requests for medical records, accident reports, and other evidence.
During discovery, your lawyer will continue negotiating with the insurance company to reach a settlement, while also preparing for the possibility of trial.
Timeline: The discovery process can take several months, depending on the complexity of the case and the availability of evidence.
Why it matters:
Discovery allows both sides to gather the necessary evidence to strengthen their case, whether it’s for settlement negotiations or trial preparation.
Key takeaway:
After filing a lawsuit, the discovery process begins, during which both sides gather evidence to build their case.
D. Mediation or Arbitration
Before going to trial, many cases go through mediation or arbitration as an alternative method of dispute resolution. In mediation, a neutral third party (the mediator) facilitates discussions between both sides to help them reach a mutually agreeable settlement. Arbitration is more formal, with an arbitrator making a binding decision based on the evidence presented.
- Mediation: Both sides work with a mediator to negotiate a settlement without going to trial.
- Arbitration: An arbitrator hears both sides and makes a decision that is typically binding.
Timeline: Mediation or arbitration can often resolve a case in a matter of weeks or months, without the need for a lengthy trial.
Why it matters:
Mediation and arbitration can help resolve a case faster and more efficiently than going to trial, while still allowing both sides to negotiate.
Key takeaway:
If negotiations fail, mediation or arbitration may help resolve the case without the need for a trial.
E. Going to Trial
If mediation and negotiations fail to result in a fair settlement, the case will proceed to trial. At trial, both sides will present their evidence, witnesses will testify, and a judge or jury will make the final decision on the outcome of the case.
During a trial, your lawyer will argue your case, present evidence of the other party’s liability, and demonstrate the extent of your damages. The judge or jury will then decide how much compensation, if any, you are entitled to receive.
Timeline: Going to trial can take months to over a year, depending on the court’s schedule and the complexity of the case.
Why it matters:
Trials are more time-consuming and expensive than settlements, but they offer the opportunity to secure full compensation if negotiations fail.
Key takeaway:
If all attempts to settle the case fail, your lawyer will represent you in court, and a judge or jury will determine the final outcome.
3. What Are the Risks of Rejecting a Settlement Offer?
While rejecting a low settlement offer can result in a higher payout, it’s important to understand the risks involved, including:
- Longer timeline: Rejecting an offer and continuing negotiations can extend the time it takes to resolve your case.
- Uncertainty: There’s no guarantee that rejecting an offer will result in a higher settlement, especially if the case goes to trial.
- Increased costs: If your case goes to trial, legal fees and court costs may increase, reducing your final compensation.
- No recovery: If you lose at trial, you could end up with no compensation at all, depending on the outcome of the case.
Why it matters:
While rejecting a settlement offer can lead to a better outcome, it’s important to weigh the risks and benefits before making a decision.
Key takeaway:
Rejecting a settlement offer can result in a higher payout, but it also involves risks, such as a longer timeline, increased costs, and the uncertainty of a trial.
Conclusion
Rejecting a settlement offer is the first step in continuing negotiations to secure a fair payout for your injuries and damages. After rejecting an offer, your lawyer will present a counteroffer and work to negotiate a better settlement. If negotiations fail, your case may proceed to litigation, mediation, or trial. While rejecting a low offer can result in a higher settlement, it’s important to carefully consider the risks and benefits of continuing the legal process.
Disclaimer: The content of this article is for informational purposes only and does not constitute legal advice. The information provided is based on general research and is not intended to be a substitute for professional legal advice or consultation with a qualified attorney. Always consult with a lawyer regarding your specific legal situation.
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