8 Reasons to Never Accept an Insurance Company’s First Offer

Your First Offer vs. Your Final Offer

When disaster strikes, we understand the rush to remedy the damage as soon as possible. However, taking time to consider your insurance company’s offer can save you money, up to tens or even hundreds of thousands of dollars. Keep reading to find out more about what’s involved in the insurance company’s initial offer, what you stand to gain, and how to begin the negotiation process.

8 Reasons You Shouldn’t Accept Insurance’s First Offer   

1. Low Initial Offers: Insurance companies often start with low offers to minimize their payout. By not fully covering your damages, they save money.
   
   
2. Incomplete Assessment: The first offer might be based on an incomplete evaluation of the damage, missing, hidden, or long-term costs. If there is damage outside of the adjuster’s scope of evaluation, be sure to bring it to your insurance company's awareness so you can be compensated fairly.
   
   
3. Negotiation Leverage: Rejecting the initial offer opens the door for negotiation, potentially leading to a higher settlement. The best way to get more help is simple: Ask for it! You’ll never have the opportunity to receive a larger claim settlement check unless you begin that conversation.
   
   
4. Professional Advice: Consulting with a public adjuster or attorney can reveal that the first offer is inadequate compared to what you’re entitled to. If you’re unsure about the fairness of your insurance company’s initial offer, an experienced claims dispute attorney can help you get the money you are owed better than you, a contractor, or a public adjuster, is able to get. What’s even better is that they’re paid on net new money alone, so you really can’t lose by enlisting professional help.
   
   
5. Future Costs: The initial settlement offer may not consider future costs related to repairs or replacements, leading to out-of-pocket expenses later on. Catastrophic events and subsequent property damage can sometimes unfold in a domino effect, leaving property owners way out of their depth and totally unprepared. Taking steps to negotiate your insurance company’s initial offer is a small effort that can make a big difference in the grand scheme of things.
   
   
6. Pressure Tactics: Insurance companies may pressure you to accept quickly to avoid additional payouts. Be sure to notice language like “best and final offer” and be aware they may be pressuring you to rush into accepting their initial offer.
   
   
7. Full Entitlement: Holding out for a better offer ensures you receive the full amount you’re entitled to under your policy. Many people use “wait and see” tactics during negotiation to pressure the insurance company into making an even better offer.
   
   
8. Comparable Estimates: Obtaining multiple estimates from contractors can highlight discrepancies between the actual repair costs and the first offer. As with negotiating other deals (like the purchase of a house, for example), exploring estimates from third parties can help give you grounds to challenge your insurer’s first offer and help you get more money for repairs.

6 Insurance Claim FAQs

Q: What should I do immediately after an incident?

A: Before you even begin the claims process, you should first assess the damage and document it with photos and videos. This will help provide evidence to your insurance company throughout the claims process. You should also take time to look over your insurance policies. Depending on your insurance policies, there may be deductibles or limitations to what is covered. And finally, before you submit a claim, you may want to consider seeking alternative estimates. This will help you prepare for how much you might expect repairs to cost, and can also be used as evidence during the claims process should you need to negotiate your insurance company’s initial offer.

Q: How long do I have to file a claim?

A: Generally, it’s best to file your claim as soon as possible after the incident so you can get going on repairs sooner and so that the specific details about everything that happened are fresh in your mind. Your insurance company must begin investigating your claim within fifteen days after it is filed. 

Q: What if the insurance company denies my claim?

A: Read your insurance denial letter carefully; it should thoroughly outline the reasons for denial. If you find any discrepancies, be sure to note them. If you believe your claim was wrongly denied, you can file a claim dispute with the insurance company. This process involves additional documentation and evidence to the insurance company (for example, the initial estimates from the contractor).

Q: What if the settlement offer is too low?

A: If the settlement offer is still too low after you’ve done what you can to negotiate the claim payout, you have two options. You can choose to accept the low offer and pay the rest out of pocket, OR you can ask for help and proceed to fight for the money you are owed.

Q: What if the situation gets worse or the insurance company will not offer the needed amount?

A: If your claim dispute continues to be denied, or you believe your insurance company is acting in bad faith, consider talking with an attorney. An experienced insurance claim dispute attorney can help you identify the validity of your claim dispute, navigate the legal system, and fight for the compensation you deserve. 

Q: Who can help advise me with questions and issues about insurance claims + the process?

A: If your property insurance claim is denied, The Lane Law Firm offers free, no-obligation consultations to answer all your questions. We can help you navigate the dispute process and fight for the compensation you deserve. We will carefully review the ins and outs of your policy, evaluate the claim, assist you with the appeals process, and provide legal advice and support throughout the whole process. If necessary, we’ll even represent you in court and make negotiations on your behalf. Call us to get started today.