Why did the insurance company start with such a low settlement offer?
Insurance companies are notorious for offering less than you deserve in their first settlement offer. Ever wonder why?
Interestingly, insurance companies need to be sued in order to determine if you have a strong case or not.
Once the insurance company is sued, they can subpoena records from your past and deposition you and the other involved parties.
That's why they give you a low-ball offer. If they don't, you won't sue them, and then they have no information to work with.
The other reason insurance companies make low ball settlement offers is that they know that many injured parties will naively accept the low offer. For many folks, the prospect of taking on a giant insurance company is daunting, and they prefer to avoid the conflict by simply accepting the first offer.
In some cases, they need the money right away. They may not be aware that there is an entire industry, called legal funding, that offers cash advances against future lawsuit settlements. So, they opt not to fight for a higher settlement offer.
There is one final reason why insurance companies make low settlement offers. They know that in order to sue them, you have to find a lawyer.
As it turns out, suing insurance companies has a built-in screening process. Since lawyers typically only take cases on a contingent basis, the insurance companies want to have you vet your case with lawyers who might represent you.
If you cannot get a lawyer, you probably have a weak case and will accept their initial settlement offer.