How To Reject and Respond to a Low Settlement Offer From The Insurance Company in Charleston - The Art of the Deal Part II

Posted by Jay McMillian | Nov 05, 2017 | 0 Comments


In any negotiation with an insurance company concerning a personal injury settlement, it is incumbent upon you and your personal injury lawyer to know how to respond to a low initial settlement offer and craft an informed and firm counteroffer.  For purposes of brevity and simplicity, this article will pick up from the point in time where "The Art of the Deal - Part 1" left off. We are going to assume that a demand letter has already been submitted to the insurance company by yourself or your personal injury attorney. 

The amount of time it takes to receive an initial offer from the insurance company can widely vary. In more minor accidents, the insurance company may fling an initial offer at you with a few days or a week or two of the accident. Generally, the more complex or severe the accident, the more time it will take for the insurance company to offer an initial settlement. 

I have had experience with insurance companies who will get an initial offer out there as quick as possible to the victim, in hopes of catching them and getting a settlement prior to the victim consulting a personal injury attorney. I have also had experience with insurance companies who quite frankly will not talk to you or return your calls until you have hired an attorney. As it concerns the latter, I do not think insurance companies are being noble and insist upon you getting legal counsel. My experience has been that when insurance companies are dealing with a victim who is not represented by a personal injury attorney, there is no impetus to reach out. Heck, if they are able to drag you out past 3 years, they can run out the statute of limitations on you and then you get absolutely zero!

Upon receiving the claim and / or the demand letter and making an initial offer, the claims adjuster will conduct an investigation that in a lot of ways will mirror the investigation done by your personal injury attorney. The claim adjuster will interview witnesses, review police reports, review your medical records, and read the demand letter. In cases that involve more severe injuries and claimed damages, the claims adjuster will visit the scene of your accident. Upon completion of this investigation, the claims adjuster at that point will usually make the initial settlement offer. 

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The claims adjuster will "sell" the initial offer to you under the facade that "this is what we think the claim is worth." First of all, common sense tells you that claim is bogus. Insurance companies move off of initial offers all the time, so this statement is patently false. As part of the conversation with the adjuster concerning the initial offer, you may hear the adjuster make reference to another dollar amount known as the “authority." The "authority" is what the adjuster will claim is the highest dollar amount for which the claims adjuster's supervisors will allow your personal injury claim to settle. Once again, this statement is "patently false" for two reasons: first, again insurance companies move off offers in excess of the initial "authority" all the time, and two, if the case is strong enough, a jury award will most definitely exceed any "authority" amount confessed by the adjuster. 

A professional adjuster will never tell you how much the “authority” actually is. Any reference to “authority” during settlement negotiations is a tell-tell sign that the adjuster is floating an amount that he or she hopes will convince you is top dollar. The "authority" is never top dollar!! This is a standard tactic by an adjuster and is nothing more than bluffing and misleading. Disregard any reference to "authority" - it is utterly meaningless in the context of the initial offer. 


Behind taking a low-ball initial offer prior to consulting an personal injury attorney, the second biggest mistake that I see personal injury victims make is that they allow the negotiation to stall. The victim gets an initial offer and thank goodness has good enough sense to know that the offer is terrible and they decline the offer. But then the victim kinda gets stuck into a mindset of "now what do I do?"

By holding on to your settlement money for a longer period of time, the insurance company is essentially earning income off the money that is rightfully yours and in essence they are mitigating their own payout. You need to take a proactive role in bringing your claim to a close and securing a favorable settlement offer!

Let me repeat that because it is that important . . . you need to be proactive in bringing about a favorable settlement!!

You should call the claims adjuster regularly, I would say at least once a week, until an initial offer is given! If the claims adjuster contacts you and gives an offer over the phone, please tell them to reduce the offer to writing and sent to you certified mail. Any offer that is received from the insurance company should be broken down into its component parts (medical bills, lost wages, future treatments, pain and suffering, etc.). It is common for the insurance company to throw out a single figure in hopes that the one amount will be enough to fool you into a cheap settlement. By having the adjuster break down the offer, you can identify where the insurance company may be shorting your claim.


It is the rule, 99% of the time, that the initial offer from the insurance company will be a "lowball" offer. The adjuster will cite several reasons why the initial offer is so . . . well . . . "low." The adjuster may question your role in the accident and claim you are somewhat  at fault, or that your injuries are not that serious or some have flat out accused my clients of "faking it." They may question your pain and suffering demand or the amount needed for future treatments. 

The initial settlement offer is the insurance company's way of feeling you out. Do not lose your cool over something you can not control. You are, most likely, going to get low-balled on the initial offer. The insurance company's priority is maximizing profit, not looking out for your well-being. The claims adjuster throws out that low-ball initial offer in hopes that you will accept. Victims without a personal injury attorney often accept these obscene offers and the insurance company laughs all the way to the bank and the adjuster gets a promotion. 

Once you receive a written copy of the initial settlement offer, review the settlement amounts and the reasons stated for such a low offer. You should respond to each of the reasons cited by the claims adjuster in a written letter that includes a logical and reasonable counter-offer. In this letter, you will reinforce the positions you cited in your demand letter. This is a good time to also add some emphasis to the pain and suffering that you had to experience and how the accident effected you in a more personal way. Approach every facet of the negotiation as a  professional yet remain strong in defending your position. In no way should you ever . . . ever attack a claims adjuster in a personal manner. 


In a written letter, you should reject the initial offer of the insurance company by emphasizing the following points:

  • Clearly state that you do not find the initial settlement offer acceptable;
  • Lists the specific reasons why the initial settlement offer is not acceptable; and
  • Include a demand for a higher settlement offer.

The written letter will serve a dual purpose, of course - that is to reject the initial offer by the insurance company and provide to put the adjuster on notice of your new counter-offer.. The amount of your counteroffer should be a little  lower than the one you included in your initial demand letter. The pitfall to avoid here is to not go too low on your first counter-offer. Personal injury attorneys usually vary on the amount they will come off the original demand in the first counter-offer but it is still best to be aiming a little high at this point rather than show a deep cut. If an insurance adjuster sees that you have cut your money demand in half from your first demand letter, then the insurance company has no impetus to negotiate much further and, best case now, you will be stuck with the number, or maybe even lower.


Contact Jay McMillian at The McMillian Law Firm. Once you have obtained legal representation on your matter, the insurance company must cease direct contact and deal with your lawyer instead. Contact me as soon as possible so that I may conduct a site visit of the accident and begin to obtain witness statements, police reports, and all relevant materials I need to build your case towards an acceptable settlement or trial. 

It is never too early to contact me! Each and every day is a day the insurance company will try and short-change your claim. I am available for home visits, hospital visits, nights and weekends, just let me know what works for you. 

If you have been involved in a car accident and live in Charleston, Mt. Pleasant, North Charleston, Summerville, James Island, Johns Island, West Ashley, Goose Creek, Moncks Corner, Walterboro, Folly Beach, or any of the other fine communities of the South Carolina Low Country, contact The McMillian Law Firm now!! 843-900-1306 or email at [email protected]

About the Author

Jay McMillian

Background I chose to build my law practice in the areas of Car Accident and Personal Injury because these areas of the law are the most accurate reflection of my values and my upbringing. Being the son of a breakfast hostess and a retired US Army Sargent turned construction worker, the values instilled upon me by my par...


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The McMillian Law Firm

Attorney Jay McMillian operates a solo practice with an emphasis on two core principles. First, to provide competent legal advice in the areas of Auto Accident and Personal Injury Law to the people he is proudest to serve, the people of the South Carolina Low Country. Second, to provide the most personal and intimate service to each and every client and give them the attention and compassion that they deserve while going through the stress and strain of negotiating or litigating an injury claim. If you live in Charleston, Summerville, Mount Pleasant, Goose Creek, James Island, Walterboro, Moncks Corner, and you or someone you love has been injured by the negligence of another, please call Jay at The McMillian Law Firm today.

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