How do I know if I an insurance settlement offer is fair?
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How do I know if I an insurance settlement offer is fair?
I was a passenger in a auto that hit another car. My wrist was fractured and I had to wear a cast for 2 weeks. The insurance company offered me $1100 to settle. Should I take this amount?
Asked on August 23, 2014 under Personal Injury, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
To evaluate a settlement, first determine what is the most you could get if you went to trial and win. That is the sum of:
1) Out-of-pocket (not paid by insurance) medical bills;
2) Lost wages, if any;
3) If you have suffered weeks (or longer) of significant impairment or disability, some amount for "pain and suffering." This amount can vary tremendously, but as very rough rule of thumb, for an injury like yours, would typically be equal to 50% - 100% of your medical bills.
That's more-or-less the most you could get. If you settle, you always take less: that's because if you settle, you get the money months or years faster, with significantly less cost (e.g. no legal fees for discovery or trial; no expert witness [doctor] fees), and more certainly (e.g. you're sure to get it if you settle; whereas going to trial is never certain--even good cases lose).
So typically, if you settle, you accept between 1/4 and 1/2 of what you could get at most if you went to trial and won.
If $1,100 is more-or-less 1/4 or more of the sum of 1) to 3) above, then, as a rough, general rule, the settlement is reasonable.
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