When is the best point to accept a compensation offer?

Most insurance companies tend to make a low initial offer of compensation in the hope that you will accept. However, some insurance companies will make a high initial offer and then reduce this as your case progresses. So how exactly will you know when to accept an offer or is this just poker?

How early can I settle my claim?

If you have instructed a personal injury solicitor you might receive the offer during the claims process.  If you are dealing directly with the insurer, you may receive an offer directly. 

Either way, you are free to accept an offer as soon as you receive one.

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Insurance company tricks to be wary of

Pre-medical offers

In some circumstances some insurers will make a pre-medical offer immediately - without even seeing any medical evidence.

To be clear, this means accepting a compensation offer before a medical report has ascertained;

  • the extent of the injury
  • the suitable treatments
  • the prognosis for ongoing care

This highly controversial practice has been criticise in parliament - so why do insurance companies do this?

A recent article in the Law Society Gazette highlights the real reason. Insurance companies want to 'buy off 'victims of injury and illness to save themselves money.

See: Should I accept a pre-medical offer?

Early offers

Being contacted by someone offering money when you have just been injured or made ill can seem too good to be true, and it usually is. Insurance companies try to offer just enough to tempt you to settle your claim, not what it may actually be worth.

Even if you have had a medical report, you usually still won't know for certain how long you will take to recover. 

Accepting an early offer is therefore a gamble:

  • If you recover sooner than expected, you will be better off.
  • If your recovery takes longer, you cannot then ask for further compensation.

As tempting as the certainty of an early offer may be, you are strongly advised to negotiate further.

This is where a solicitor really adds value.  A personal injury solicitor will be:

  • familiar with the negotiating tactics of individual insurers
  • demonstrate to the insurer your intent to go all the way to court if necessary (this option would cost then insurer far more)
  • offer assurance as to the level of compensation achievable.

Misleading advice

A commonly reported tactic is when the insurance company tells claimants not to instruct a solicitor. Insurers claim that they will be able to pay more as a result. This is simply not true.

Offering a panel solicitor

Once an insurer knows that you want to seek legal advice they may recommend a panel solicitor.  This panel solicitor will be beholden to the insurer for an ongoing stream of work.

A potential conflict is clear.  How can the solicitor purport to offer independent advice to the claimant if they are commercially dependent on the insurer.

See:  Do I have to use the insurance company's solicitor?

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The real financial benefits of instructing a solicitor

Research carried out by the Financial Conduct Authority (the insurance industry regulator) showed that people who do not accept a first offer from an insurance company and instead instruct a solicitor receive on average 2-3 times more compensation.

This startling statistic shows just how much the insurance industry stand to gain by denying you your right to independent expert advice.

See: Calculate how much compensation I could receive

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So when should I settle my claim?

A solicitor will present with the facts. How much your claim is worth, what risks are involved and what you would need to do to get the maximum compensation.

Even if you do choose to claim through a solicitor, you are still in the driving seat. You should settle your claim when you want to, not when someone pressures you to.

Independent legal advice from Quittance's solicitors puts you in control, not the insurance company.

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Next Steps

All Quittance's panel of solicitors are regulated by the Solicitors Regulatory Authority. This guarantees you receive independent advice that focuses on what is right for you, not how much profit an insurance company can make.

If you have been approached by an insurance company already, you can get immediate help and support by speaking with an expert.

Call us on 0800 612 7456 for a free, no-obligation consultation about your claim.

Gaynor Haliday, Legal researcher

About the author

Gaynor Haliday is an experienced legal researcher and published author. She has had numerous articles published in the press and is a legal industry commentator.

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