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April 19, 2024 | Personal Injury

What Happens When You Reject an Insurance Settlement Offer in New York

When claimants are presented with an insurance settlement offer, they face a significant decision-making process that can have far-reaching consequences. This decision involves weighing the offered settlement against the potential benefits and risks of accepting or rejecting it.

Rejecting an offer from the insurance company in New York can lead to complex outcomes, impacting the claimant's ability to recover damages and pursue further legal recourse. Claimants need to approach this decision with careful consideration and a thorough understanding of their rights and options. 

What happens when you turn down a settlement offer

By turning an offer down, you will initiate a series of immediate and long-term consequences, each influencing the trajectory of your claim.

In the short term, rejecting an offer prolongs the resolution timeline as negotiations continue or legal action is pursued. This delay can extend the time it takes to receive compensation, potentially impacting your financial situation and ability to address immediate needs.

Ultimately, the rejection of a settlement offer opens the door to various possible outcomes, each with its own implications:

  1. In some cases, parties may opt for mediation, a facilitated process aimed at settling with the assistance of a neutral third party. Mediation can provide an opportunity for both sides to explore creative solutions and avoid the costs and uncertainties of litigation.
  2. Alternatively, if mediation fails or is not pursued, the dispute may proceed to arbitration. Arbitration involves presenting the case to a neutral arbitrator who will render a binding decision. While arbitration can offer a quicker resolution than litigation, the outcome is final and may not be appealed.
  3. Ultimately, you might end up with litigation, where the case is adjudicated in court. Litigation involves formal legal proceedings, including pretrial discovery, hearings, and potentially a trial. While litigation can be time-consuming and costly, a judge or jury can determine the outcome based on the evidence presented.
  4. In some cases, rejecting an offer may result in the involvement of new insurance adjusters or insurers, particularly if the initial representatives cannot resolve. This can bring fresh perspectives to the process but may also lead to further delays.

It's smart to carefully weigh the risks and benefits of rejecting an offer, considering the potential for continued discussions, alternative dispute resolution methods, or escalation to legal proceedings. 

Seeking guidance from a qualified personal injury attorney from our law firm can provide valuable insight and assistance in navigating these complex decisions and achieving a favorable resolution.

Gilberto Hernandez had this to say about us:

"The attorneys and the paralegals rocked! They worked tirelessly until my case was settled and got me the amount that I deserved. I was always well informed of how my case was doing. Highly recommended!"


Additional reading: New York personal injury statute of limitations

When and why do insurers extend offers in New York

Insurance companies typically extend offers at various stages of the claim process in New York, with the timing and motivations influenced by several factors.

Early settlements

Initial offers are often made before a full assessment of the claimant's damages and liabilities has been completed. Insurers may extend early offers as a strategic move to resolve claims quickly and minimize their financial exposure.

Early accident settlement offers are notoriously going to be much lower than you deserve, so our best advice is to NOT accept them. Remember that insurance companies are a business, at the end of the day. Their prime motivator is to make money NOT to give you a 6-figure payout.

Additional reading: no-fault car accident settlement amounts in New York

After investigation and evaluation

After a thorough investigation and evaluation of the claim, insurers may extend offers once they understand the claimant's damages and the insurer's potential liability. This stage typically occurs after the claimant has provided evidence, such as medical records, property damage estimates, and witness statements, to support their claim.

Pre-litigation negotiations

These offers are often motivated by the desire to avoid the time, expense, and uncertainty associated with litigation. Insurers may also consider the potential reputational damage and negative publicity resulting from prolonged legal disputes.

In response to legal action

When you file a claim against the insurer, offers may be extended during various stages of the litigation process. Insurers may make offers to settle the case before trial, during pre-trial proceedings, or even during trial, depending on the circumstances and evidence presented.

These offers are partly motivated by the wish to minimize potential legal expenses and the risks of a jury award that could exceed the settlement amount.

Do you have to accept the settlement offer?

The decision to accept or refuse an offer is entirely voluntary. It rests with the claimant (the injured party), who has the legal and contractual right to make this choice based on their assessment of the offer's adequacy and fairness.

In New York, as in many other jurisdictions, no laws or regulations mandate that claimants accept settlement offers. Instead, New York law upholds the principle of voluntary settlement agreements, which allow parties to negotiate and reach mutually acceptable resolutions without coercion or compulsion.

Claimants should carefully evaluate offers in light of their rights, interests, and case specifics. Factors to consider include:

  • The extent of damages
  • The strength of the evidence supporting the claim
  • Potential future costs
  • The likelihood of success in litigation if negotiations fail

While insurance companies may pressure claimants to accept settlement offers quickly or attempt to portray the offer as the best possible outcome, claimants must exercise caution and seek legal advice if necessary.

Additional reading: negotiating medical bills after settlement

How to evaluate an insurance settlement in NY

To ensure an insurance offer in New York meets your needs and upholds your rights, follow these simple steps for a thorough evaluation:

  1. Assess whether the amount covers all relevant damages, including medical bills, property damage, lost wages, and pain and suffering.
  2. Evaluate the long-term implications of accepting the offer, including any ongoing medical treatment, rehabilitation needs, or potential future costs.
  3. Compare the figure to similar cases and assess whether it provides fair and just compensation for your damages and losses.

After assessing a settlement offer against your damages and long-term needs, the next step involves weighing the pros and cons of accepting or rejecting the offer. This decision is critical as it can significantly impact your financial recovery and peace of mind.

Pros of Accepting

  • Immediate resolution of the claim.
  • Closure and peace of mind for the claimant.
  • Avoidance of legal fees and uncertainties associated with litigation.

Cons of Accepting

  • Risk of accepting a low offer.
  • Waiver of the right to pursue further legal action if needed.
  • Potential inadequacy for covering future expenses or long-term consequences.

Pros of Rejecting

  • Opportunity to negotiate for a higher settlement amount.
  • Retains the right to pursue legal action if negotiations fail.
  • Potential for obtaining fair compensation through alternative dispute resolution or litigation.

Cons of Rejecting

  • Prolonged resolution timeline.
  • The incurrence of legal fees and expenses associated with litigation.
  • Uncertainty regarding the outcome of further negotiations or litigation.

Making sense of offer evaluations and their potential impact can be complex. Legal expertise simplifies this process, ensuring your interests are fully protected.

Consider consulting with an experienced personal injury lawyer from our firm to make these critical decisions with confidence. Here's an example of why employing a legal expert is important:

We secured $450,000 for a driver that sustained injuries to her back, requiring fusion surgery. Defendants claimed that the accident was caused by our client and, at first, took a no-pay position until we proceeded with litigation.


Additional reading: car accident lawyer fees in New York

Common reasons to reject a settlement offer

These are some of the most common reasons we see for rejecting offers in insurance claims:

  • Inadequate Compensation: Rejection may be warranted if the offer fails to reflect the extent of the claimant's damages, such as medical expenses, property damage, lost wages, and pain and suffering.
  • Lack of Coverage for Future Needs: Offers that do not account for future expenses, such as ongoing medical treatment, rehabilitation, or potential long-term consequences of the injury or property damage, may be insufficient. Claimants should consider the long-term implications of the settlement and reject offers that don't provide for future needs.
  • Disputes over Liability or Negligence: Claimants should not accept offers that undermine their legal rights or fail to hold responsible parties accountable for their actions.
  • Pressure Tactics by the Insurer: Insurers may impose tight deadlines or make low-ball offers to compel claimants to accept settlements quickly. It's essential to take the time to assess the offer thoroughly and seek professional advice if needed.
  • Potential for Higher Compensation through Litigation: Especially if there is a strong likelihood of obtaining higher compensation through legal action. While litigation involves risks and uncertainties, it may be the best option for claimants seeking full and fair compensation for their damages.
  • Violation of Contractual or Legal Rights: If the settlement offer violates the claimant's contractual or legal rights, such as terms outlined in an insurance policy or statutory rights under New York law, rejection may be necessary to protect those rights.

How to decline an insurance settlement offer

Declining the first settlement offer from the insurance company requires careful consideration and proper communication to ensure clarity and professionalism:

  1. Before declining the offer, thoroughly review its terms, including the proposed compensation and any conditions attached.
  2. If you have legal representation, consult your attorney before formally declining the offer. Your attorney can provide valuable guidance on the best approach to take and ensure your rights and interests are protected throughout the process. They may also assist in drafting the formal response to the insurance company. 
  3. Craft a written response to the insurance company, formally declining. Your response should be concise, polite, and clearly state your decision to reject the offer. Avoid using overly confrontational language and focus on presenting your reasons for declining the offer in a respectful manner. This will help the insurance company understand your perspective and may open the door for further negotiation.
  4. Once you've finalized your response, submit it to the insurance company in writing. Use certified mail or another trackable method to ensure your communication is received and documented. Retain copies of all correspondence for your records.
  5. Express your willingness to continue negotiations and explore alternative resolutions to the claim. While declining the current offer, leaving the door open for further discussions demonstrates your commitment to reaching a fair and equitable settlement.

Why you need a lawyer for settlement negotiations

Having a lawyer on your side can significantly benefit your case. Here are several reasons why you should get a lawyer for a car accident in New York:

  • Expertise: We understand insurance law, settlement procedures, and the tactics used by insurance companies. We leverage this knowledge to navigate the complexities of the claims process effectively.
  • Skilled negotiators: We can secure better terms and higher client compensation, accurately assessing a claim's value and advocating for fair settlements.
  • Representation in mediation or court if negotiations fail. We protect clients' rights and vigorously advocate for them during legal proceedings.
  • Guidance and support, explaining legal concepts, answering questions, and keeping clients informed about their rights and options.
  • Increase the chances of maximizing compensation. We build strong cases, gather evidence, and present compelling arguments to secure the best possible outcome for you.

Get expert legal advice now!

At Ajlouny Injury Law, we understand the complexities of settling personal injury claims as an accident victim. It's best to carefully weigh all options and potential outcomes before deciding on an offer from an insurance company. Our team of experienced New York personal injury attorneys is here to provide expert legal advice and guide you through the process. 

Feel free to contact us for personalized assistance tailored to the specifics of your case.

Contact us at [phone_text] to schedule your free consultation with our personal injury lawyers.



Can an insurance company take back a settlement offer?

In general, once an insurance company makes a settlement offer and it's accepted by the claimant, it becomes binding, and the insurer cannot retract it. However, if the offer has not yet been accepted, the insurer may withdraw it at any time before acceptance.

How long do you have to accept a settlement offer?

Typically, insurance companies provide a deadline for accepting an offer, which may range from a few days to several weeks. It's crucial to carefully review the terms of the offer and respond within the specified timeframe to avoid any potential issues.

How long does an insurance company have to settle a claim in New York?

While there's no specific timeframe mandated by law for settling a claim, insurers must conduct timely investigations and reasonably communicate with claimants. If an insurer unreasonably delays or denies a claim, the claimant may have legal recourse under New York's insurance regulations.

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