Many people involved in motor vehicle collisions in New York worry about paying to repair their vehicles, affording medical treatment and replacing lost opportunities to earn wages caused by the need to take time off to recover after their accident. If the insurance company that underwrote the policy for the person who caused the crash offers a settlement, someone who is unable to work and worried about their expenses might eagerly accept it.
What they may not realize is that a settlement helps absolve the insurance company of future responsibility even if a victim’s costs continue to go up due to new symptoms or a longer time away from work than initially estimated. The risk of losing future compensation is why accepting a car crash settlement can be a gamble.
Insurance companies want to save money
Most insurance companies are for-profit organizations, which means that they seek to keep operating costs low while they maintain the maximum possible profits through a combination of receiving premiums and re-investing company resources. The best way to achieve that in the insurance world is through minimizing sizable claims and keeping as much capital to rev-invest as possible. A settlement is the perfect tool to achieve that goal. It allows the company to theoretically fulfill its obligations while still controlling total costs.
Failing to pay at all could lead to bad faith insurance claims, but people may not feel confident about bringing a claim when they have received at least some compensation. Although the courts will recognize ridiculously low settlements as a form of bad faith insurance, it will usually be necessary for the person making a claim to demonstrate why the settlement offer was inappropriately low.
Rather than settling and then coping with the aftermath later, it is often preferable for individuals involved in collisions to carefully evaluate a settlement before responding. If it is too low, the best solution might involve countering it with a more realistic figure or preparing to take the party at fault for the crash to civil court.
Those who are unsure about whether a settlement is reasonable or not may need to talk with a professional who has experience putting a price on crash injuries and handling insurance company strategies. Responding appropriately to a settlement offer after a collision may help protect people from long-term financial hardship after a wreck.