Insurance companies protect their insured’s in cases of crashes, injuries, property damage and other types of harm. If you have an insurance policy, you expect it to provide the benefits you need when you need them. If another driver crashes into your car or you suffer injuries in another type of event, you expect the responsible party’s insurance company to cover the costs of your injuries and losses.

However, if you have ever filed an insurance claim, you know that insurance companies rarely offer the full benefits you need. Instead, an insurance adjuster will usually begin with an offer that is much lower than fair. With some negotiation, claimants can often persuade the insurer to give them what they need. But what is the point of lowball offers to begin with?

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Businesses First

While insurance companies can be there when claimants are in need, they are not charities.

Consider the following revenue reports for major insurance companies for last year:

  • Progressive = $36 billion
  • State Farm = $82 billion
  • Allstate = $50 billion
  • USAA = $35 billion

These large corporations are businesses first. Their number one goal is to maximize their revenue. The companies must report to shareholders and ensure they do everything possible to increase profits and maintain shareholder satisfaction.

The simplest way to increase profits is to minimize costs. Paying out on claims is a major cost for insurance companies and they often do everything possible to pay as little as they can. If an insurer starts with a fair offer, they have little chance to reduce their costs; so, they typically start with unreasonably low offers.

This is true regardless what type of insurance company you must deal with. For example, you might file an auto insurance claim after a car crash or a homeowner’s insurance claim for a fall or a dog bite. These companies have the same business model that involves making the lowest possible offers to keep their costs down.

Beware the Quick Offer

Why Do Insurance Companies Lowball?Sometimes an insurance company will make a lowball offer before you even file a claim. You might still be undergoing your initial medical treatment and have not even thought about an injury claim yet. Suddenly, the phone rings, and it is the insurance provider of the driver who hit you (or someone else who was responsible for causing your injuries). These offers typically come early – within days or weeks of the injury-causing event.

Too often, people think it is a positive thing to hear from the insurance company before they file a claim. This might make it seem like the insurer is willing to help you and on your side. The adjuster will likely tell you they have your best interests in mind and want to resolve the matter as soon as possible. Then, they make an offer that is far lower than you deserve without even knowing the details of your injuries.

Some people fall into this trap and accept these quick lowball offers for different reasons, including:

  • They do not realize they can negotiate for significantly more money.
  • They think this is how people routinely resolve insurance claims due to a lack of experience dealing with insurers.
  • They want to avoid a long and stressful legal process so it seems attractive to resolve the matter right away.
  • The stack of medical bills is already growing, they have lost income, and there are more financial stressors. An immediate settlement might seem beneficial to get a check as soon as possible.

Often, by making a quick offer, insurance companies can successfully convince a claimant to accept much less than what is fair for their case. This is particularly common when a claimant has not hired a personal injury attorney to advise them.

What Happens if You Accept a Lowball Offer

Often, when you learn you made a mistake, you can take steps to resolve the situation. This is sadly not the case when you accept a lowball insurance settlement.

In most cases, accepting a settlement requires you to sign a legally-binding agreement. You agree to accept a specific amount of money from the insurance company. In exchange, you give up all your rights to seek additional compensation for this specific event and injury.

Such a liability waiver, or “release”, is standard in insurance settlement agreements making it nearly impossible to reopen a claim once the document is signed. If you accept less than you need, you will not have the chance to seek more.

Imagine a person hurt in a car crash is undergoing treatment for a traumatic brain injury (TBI). They think they just had a minor concussion and expect the symptoms to clear up in a few weeks after some limited treatment. The insurance company calls and makes an offer that covers their medical bills and lost wages up to that point, which seems reasonable, so the TBI victim accepts the offer and waives future rights to seek compensation.

After they cash the check, the injured person soon realizes their TBI symptoms are getting worse – not better. They must take a long hiatus from work, need ongoing help at home, and have multiple visits with a neurologist. When the injured person accepted the offer, they did not know they might need any of this ongoing treatment or time away from work. Yet, they cannot request more from the insurer since they have already signed the agreement for the lowball offer.

Insurance companies make quick offers because they know claimants do not always have the full understanding of their future losses or case value. Unfortunately, there might be little you can do to seek additional funds. This is simply how insurance works.

You always want to know the full extent of your injuries and expected future losses before you accept a settlement. This takes time, which means a quick offer is usually not wise. Accepting a lowball offer keeps the money you deserve in the pockets of giant insurance corporations and shareholders, instead of going to injured people who deserve it.

Always discuss offers with an injury lawyer before you accept anything at all from an insurance adjuster.

Signs You Received a Lowball Offer

Accepting a settlement offer from an insurance company might not be so concerning if insurance adjusters honored the true value of injury claims. However, as discussed, insurers work hard to do the opposite and undervalue claims.

Adjusters have many ways they do this, and their employers might even offer incentives for successfully settling a claim for less than it is worth. There have been reports of major insurers offering everything from promotions to extra benefits to pizza parties to adjusters who minimize settlement payments to claimants.

Knowing that adjusters receive training and encouragement to lowball you, you should also know the signs that you are not receiving a fair offer. In the end, the best way to know if an offer is too low is to have an experienced injury attorney review everything.

Here are some signs that an insurer made a lowball offer. If you need to discuss an offer you received, never hesitate to reach out to a personal injury lawyer near you.

The Settlement Does Not Address All Your Losses

You file an insurance claim because you need compensation for your losses. If a settlement does not consider all relevant losses, including your human losses such as pain, suffering, loss of enjoyment of life, anxiety, etc., you are receiving a lower offer than you deserve.

An event such as a car crash can result in extensive costs and adverse experiences for you and your family.

An insurance company should investigate and consider all of your losses, which might include:

  • Medical bills you already incurred;
  • The estimated costs of your future medical treatment and needs;
  • Wages you lost from missing work;
  • Your estimated lost future earnings if you cannot return to your previous work;
  • Property damage;
  • Physical and emotional pain and suffering, including permanency of injuries, impairments, disfigurement, etc.

Often, a lowball settlement offer will address your past losses but not your expected future ones. It might cover your financial costs but not the non-economic losses like pain and suffering. If an insurer leaves anything out, the offer is likely a lowball.

The Insurer Questions Your Injuries

Some car crash injuries are immediately life-altering. A catastrophic injury can change the course of your life in ways you might never imagine before the crash. Even an injury that is non-life-threatening and initially seems relatively minor can have lasting and costly effects.

Insurance adjusters are not medical professionals, though they often decide that a claimant’s injuries are not as serious as claimed. Even one wrong word can cause an adjuster to assume your injuries are minor and lower your offer. For example, if an adjuster asks how you are that day, and you reflexively answer “fine” out of politeness, they might note that your injuries are not affecting you. The less severe they think your injuries might be, the lower their offer will be.

Additionally, they might question the cause of your injuries. As the injured party you have the responsibility to prove the event in question caused your injury. If an adjuster believes they can blame your symptoms on a preexisting condition, they might use that to reduce or even deny payment.

Because of these risks, you want a qualified and experienced injury lawyer to handle all of your insurance communications. Never agree to give a recorded statement nor to release all of your historical medical records to an adjuster. Allow your attorney to respond to such requests in a manner that maximizes your compensation.

The Adjuster Tries to Rush the Process

Again, adjusters will often make quick offers – sometimes, even before you file a claim. They might state they are trying to help you, but in reality, they hope you will accept an offer and conclude the process before you even realize what happened.

An insurance adjuster knows the financial pressure of an unexpected crash, event and injury. They recognize that financial stress will only increase with time, so they offer to help you immediately without making you wait for a settlement. This is usually a clear sign of a lowball offer. If you accept the lowball settlement offer, you will only make your future financial situation worse and not help anything.

They Claim You Do Not Need to Hire a Personal Injury Attorney

This is a major red flag during the insurance claim process. You might mention consulting with an injury lawyer, and the adjuster might assure you there is no need. In California, this is actually illegal. They often say they are on your side, ready to advocate for you and that a lawyer will only cost you additional money. This is precisely when you should stop speaking with them and contact a personal injury lawyer.

Of course, insurance companies do not want you to hire a lawyer. You might not know what your claim is truly worth, but an experienced lawyer who has handled many injury claims does know what you deserve. Once you hire a good, qualified trial lawyer, all communications with adjusters will go through your lawyer. The insurance company loses much of its opportunity to convince you to unknowingly accept a lowball offer, costing the company money.

Additionally, hiring a good, qualified trial lawyer does not cost you anything out of pocket. Personal injury attorneys handle claims on a contingency basis, meaning you pay nothing if you do not receive compensation. If you get a settlement, you pay legal fees directly from the settlement. Even after fees, hiring an attorney can help you take home more money than if you accepted a settlement on your own.


  • The lowball offer from the insurance company is $25,000;
  • Your attorney negotiates a fair settlement of $150,000;
  • Even after paying legal fees, you take home around $100,000, which is much higher than the original $25,000 offered.

This is only one example of the value of hiring a lawyer for your insurance negotiations.

Never Accept a Settlement Without an Injury Attorney

Car Accident Lawyer, Ram Fletcher

Personal Injury Lawyer, Ram Fletcher

The bottom line is that you should never deal with insurance companies or accept anything without legal guidance and representation. Doing so risks that you will accept a lowball offer and not be fully compensated for all the damages resulting from your personal injury case. Consult a qualified and experienced trial lawyer about your insurance claim today. Reach out to a personal injury lawyer.