What To Do When An Insurance Company Offers You $500 For Your Accident

Getting into an accident can be a stressful and challenging experience. You likely have injuries, vehicle damage, lost wages, and other expenses to deal with. The last thing you want is an insurance company trying to take advantage of you by offering an unreasonably low settlement amount.

If an insurance company like Progressive or another insurer offers you $500 or $1,000 to settle your injury claim shortly after your accident, proceed with caution. This tactic is common, but accepting it could prevent you from getting fair compensation for your injuries and damages.

Why Insurance Companies Make Lowball Offers

Insurance companies like Progressive make quick, low offers to try to get accident victims to settle before they realize the full extent of their injuries and losses.

Some reasons an insurer may make a low offer include:

• Close the claim quickly – The insurer wants to settle fast so they can close the file and avoid future payouts.

• Prevent you from hiring a lawyer – They want you to settle before you talk to an attorney who can advise you of your rights.

• Take advantage of your lack of knowledge – You likely don’t know how much your claim is really worth.

• Hope you are desperate for cash – They hope you’ll take any money offered if you need help with initial expenses.

• Scare you into settling – They may say the offer expires fast or imply it’s your only chance at compensation.

Dangers of Accepting a Quick, Low Settlement

While $500 or $1,000 may seem appealing after an accident, accepting a lowball settlement is risky:

• You likely won’t get further compensation from the insurer. Settlements typically include a waiver preventing you from pursuing more money.

• You may not yet realize the full extent of your injuries and losses. Effects sometimes take days, weeks or months to fully manifest.

• It’s difficult to determine a fair settlement amount without experienced legal help.

• You can negotiate a much higher settlement with an attorney’s assistance.

Essentially, once you settle, it’s over. Don’t accept an insurer’s lowball offer without exploring your options.

What To Do if Offered $500 or $1,000 After an Accident

If an insurer offers you $500, $1,000 or another low amount shortly after an accident, consider the following:

Consult an attorney

Discuss the offer with a personal injury attorney before accepting. An experienced lawyer can advise if the offer seems fair based on your situation and likely damages. They can also negotiate a higher settlement.

Gather evidence

Collect evidence related to the accident, injuries and losses while details are fresh. This can include photos, police reports, medical records and bills, insurance communications and more.

Don’t provide a recorded statement

Insurers often pressure accident victims into providing a recorded statement. This can hurt your claim. Refuse to provide one without your lawyer.

Don’t accept immediately

Politely ask for time to consider the offer and consult your attorney. Be aware that insurers sometimes give very short acceptance periods to pressure fast settlements.

Negotiate a higher amount

Don’t take an initial low offer. Your attorney can help you negotiate a fair settlement based on the value of your damages. Insurers often increase offers substantially with legal representation.

Consider your injuries

Look beyond initial pain. Soft tissue injuries like whiplash can take weeks or months to fully surface. Consult doctors to understand your prognosis before settling.

What Factors Determine the Value of an Injury Claim?

Many factors affect what a personal injury claim is worth. An experienced attorney can help analyze these:

• Medical bills – Current and estimated future treatment and medication costs.

• Lost income – Wages lost due to missing work from the accident and recovery.

• Reduced earning capacity – Potential loss of future earnings if you cannot work the same way.

• Property damage – Repair or replacement costs for your vehicle, phone, clothing, glasses, etc.

• Pain and suffering – The physical and emotional distress caused by your injuries.

• Disability – Costs and losses associated with permanent impairment or disability.

• Out-of-pocket costs – Expenses such as hiring help, medical equipment, accident reconstruction experts, etc.

• Punitive damages – Money awarded to punish egregious behavior that caused the accident, like drunk driving.

Consider all current and future costs your accident caused when evaluating a settlement offer.

Example of a Low Settlement Offer Situation

Here is an example of how an insurer’s quick, lowball settlement offer could impact someone:

Sarah was rear-ended at a stoplight by a driver who fell asleep at the wheel. Her car was totaled. The other driver was insured by Progressive.

Two days after the accident, the claims adjuster called Sarah and offered her $500 plus medical expenses to settle. He said the offer was only good for 24 hours.

Sarah’s neck and back were hurting badly. She decided to consult with an attorney before accepting. Her lawyer requested documentation from Progressive and advised Sarah not to provide any recorded statement.

Over the next month, as her pain persisted, Sarah incurred over $2,000 in medical bills for x-rays, MRIs, chiropractic treatment, and physical therapy. It became evident she suffered a disc injury that could require future care.

With her lawyer’s help, Sarah ultimately negotiated a fair $45,000 settlement from Progressive – 90 times more than their initial offer!

If Sarah had accepted the quick $500, she would have waived rights to the fair compensation she deserved. Speaking to an attorney prevented Progressive from taking advantage of her lack of knowledge.

Get Legal Help With a Low Settlement Offer

If an insurance provider offers you $500 or another low amount to settle your accident claim, contact a personal injury attorney immediately. Don’t accept an offer without exploring your options, rights and best next steps. An experienced lawyer can help maximize your compensation so you can focus on healing.