How To Respond To A Low Settlement Offer

In a typical personal injury case, after the extent of your injuries and your "damages" are made known, you, or your lawyer on your behalf, are required to send a demand letter to the person responsible for the injuries, or the insurance company acting on the person’s behalf. 

Usually, the insurance company will respond to your demand letter with an unreasonably low - or "low-ball" - settlement offer, and how you respond to this offer will make or break the outcome of your case.

It can be tempting to respond straight away when you first receive an offer, even if far lower than what you hoped, however, it’s important that you don’t make any rash decisions, and that you process the details fully and respond appropriately.

In this article, we’ll explain why the decisions you make at the beginning of your claim influences how your case plays out and the end settlement you receive. 

Try to Remain Calm and Analyze the Offer

One of the biggest mistakes you can make is to fire back a response, as this is when emotions are running high, particularly if you’re angry, upset, or in desperate need of money. You need to remain calm and give yourself time to go over the offer and think about how you’ll respond.

It’s also important to maintain a professional relationship with whoever you’re responding to, whether it’s an insurance company or a defense attorney. It’s standard procedure for a low offer to be made at first, and this is typically just a starting point for further negotiations. 

Respond in writing 

You should always respond in writing to the offer, however, it’s fine to call or email the insurance adjuster before writing a formal response, as this is a good opportunity to ask any questions before you proceed.

The responses to these questions will provide guidance when you're drafting your formal response and counteroffer, and prevents any miscommunication which could slow the process down. 

The initial low offer could be due to insufficient information about your injuries or other claimed losses. If this is the case, you may need to provide the adjuster with the relevant updated medical bills, proof of lost income, or any other necessary documents.

If you didn't do this in your initial demand letter, it’s also a good opportunity to focus on the more emotional points of your case in your response and counteroffer. 

While it’s likely that the factual timeline of the accident and your medical treatment are described in detail in your initial demand letter, such as the cost and date of your surgery and treatments, and the physical symptoms or injuries experienced, you could perhaps place more emphasis here on the emotional effects of the injury you sustained. 

Your formal follow-up correspondence is an opportunity to focus on your non-economic damages, like the emotional distress of the injuries you sustained. For example, perhaps you can no longer enjoy your favorite hobbies or you have had to take leave from work.

These impacts will differ depending on your case and circumstances, but it’s likely that any physical injury will have taken its toll mentally and emotionally, too. 

Formulate Your Counteroffer

The next step you need to take is to calculate your counteroffer, and while tempting, it's not going to go down well if you respond to a low personal injury settlement with an equally unreasonable - but far higher - counteroffer.

As we said above, maintaining a professional relationship with the other party is key, and you should also ensure your approach to the negotiation is thorough and detailed. 

When formulating your counteroffer, consider the amount you think you deserve, the limits of the applicable insurance coverage, and the at-fault party's potential assets.

While you may feel that you deserve $40,000 based on your injuries, the other party may have low insurance policy limits. In this case, the insurance company may offer you a figure of around $20,000. A reasonable counter offer to this would be between $30,000 and $35,000.

This won’t be the final offer you make, as it’s standard for a personal injury settlement process to consist of back-and-forth offers, which can feel frustrating and pointless, but every move you make will play a role in getting you that end settlement. 

One thing you should bear in mind is it’s important to avoid accepting the insurance company's settlement offer before you've fully healed from your injuries, or at least until you have a grasp of the full nature and extent of your injuries.

This is to ensure that the settlement will cover any necessary future medical treatment you may require. Once you accept the settlement and sign a release, it’s final - you can't go back and file a personal injury lawsuit or ask for a higher offer, so think carefully before you do so. 

Final Verdict

It’s perfectly normal to get a low settlement offer the first time around, so don’t worry if this happens to you, as it’s seen more as a starting point and the insurance company is simply testing you.

Even if you’re desperate for money, it’s important to try and hold off accepting the offer too soon, as once you’ve signed a release for the settlement, there’s no turning back. 

Instead, think carefully about how to respond, or if you have a lawyer, discuss this thoroughly with them before responding with a counter-offer. It’s also a good idea to call or email the insurance adjuster to ensure they’re fully aware of the details of your case and to ask any questions before responding in writing.

This will allow you to clear up any misunderstandings before writing your response letter which will contain a counter-offer. As we said, it’s important not to settle too low, but also to be realistic, especially if you’re dealing with a defendant who has a low insurance policy limit. 


Thank you for visiting. This website is for informational purposes only. None of the information provided is intended to constitute, nor does it constitute, legal advice, and none of the information necessarily reflects the opinions of Misty Rock Capital LLC dba or anyone associated, employed or affiliated with Misty Rock Capital LLC dba