Why Should You Talk to an Attorney Before Accepting an Insurance Settlement Offer?

by  Adv. Umapathi Natarajan  




3 mins


Insurance Settlement

An insurance settlement is the amount that is received by the claimant after an insurance claim is accepted by the insurance company. The insurance settlement is only given for claims that abide by the guidelines stipulated by the insurance company. However, an insurance settlement should only be accepted after an attorney consultation. This is to ensure that the value of the insurance settlement is as high as it should be, and the remuneration is appropriate. Some lawyers deal specifically with insurance cases, and their input on a potential insurance settlement would be invaluable.

How is an insurance settlement calculated?

The value of an insurance settlement depends on many factors. This includes the type of policy, the value of the insurance premium paid, and the extent of the damage for which the insurance settlement is being applied for.

  • The upper and lower limits of the insurance settlement are explicitly laid out in the agreement itself. In this way, the type of policy determines the possible values of the insurance settlement.
  • Payment of a monthly premium, or lack thereof, plays an important role in the insurance settlement. Failing to pay these on time may result in the agreement being vitiated. On the other hand, the amount that is paid as the premium also determines the value of the insurance settlement.
  • The extent of damage is used as a yardstick for the insurance settlement in case of insurance claimed in relation to situations such as motor vehicle accidents.
  • The circumstances relating to the accident can also affect the insurance settlement. For instance, if the claimant has to bear some liability for a motor vehicle accident, their settlement might be lower than expected.

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What is a settlement offer?

A settlement offer is the amount that the insurance company is willing to pay as a result of the insurance policy that a particular person has with them. As mentioned above, this takes into account the type of insurance policy that was bought, the frequency, consistency and value of the premium paid, the extent of the damage in certain cases, and the liability of the claimant in the incident that occured.

Settlement offers are meant to compensate policy holders for a certain loss. Settlements depend on the type of policy, and certain types of insurance only allow settlements after verifying that a loss has occurred, as well as the circumstances of the loss, whereas other types of insurance provide for an immediate payout on the occurrence of a certain event.

An example of the former would be car insurance or house insurance, where it has to be confirmed that the damage was not caused by the claimant themself. An example of the latter would be life insurance, where the death of the policy holder is sufficient to warrant the payout.

However, the process for availing the amount within the policy is long and arduous. It involves many complex forms and documents, and outside assistance may be necessary to navigate this procedural maze.

How to get an insurance settlement?

Insurance companies are known to drag their feet when it comes to paying out an insurance settlement. This makes it important to follow the procedure for submitting an insurance claim to the letter, as any deviance might require you to go through the process all over again.

  • Inform the insurance company of your claim as soon as possible. The sooner the claim is registered, the sooner it will be accepted.
  • Ensure that the person you are communicating with for verifying the insurance claim is authorised to carry out such a task.
  • Submit all relevant forms and documentations that are required at the earliest.
  • If possible, hire a lawyer to guide you through the process of filing the requisite documents to ensure that nothing is missed.

If all the procedures are followed properly, the insurance settlement offer should arrive shortly after all the formalities have been completed.

If you have not hired a lawyer at this point, it would be advisable to speak to one before accepting the insurance settlement. An insurance lawyer would be in a position to examine the insurance settlement in the context of the circumstances of the incident that necessitated the settlement.

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What can an insurance lawyer help me with?

Insurance lawyers are well-versed in the law governing insurance. This allows them to give advice on a wide range of topics related to insurance.

  • Insurance lawyers are familiar with the general terms of insurance policies, which enables them to identify which policies are beneficial and which ones would be detrimental.
  • An insurance lawyer would be able to determine whether the terms of a particular insurance policy are legally enforceable. This is particularly helpful while considering an insurance policy that appears to be manifestly unfair, and can aid in renegotiating the terms of the agreement.
  • Insurance lawyers are familiar with the formalities that are required for filing an insurance claim. Contacting one before filing the claim can help in ensuring that all the documents are submitted on time, and are compliant with the necessary standards.
  • Insurance lawyers are also equipped to evaluate the value of the insurance settlement, and can provide advice on whether the offer should be accepted or not.
  • Sometimes, an insurance company may offer an insurance settlement that is lower than it should be. In such cases, an insurance lawyer would be able to recommend an alternate course of action to get you the settlement that you deserve.
  • They may advise you to file certain documents that would result in a reevaluation of the insurance settlement, or help you communicate your desire for a more favourable settlement to the insurance company.
  • In case the insurance settlement seems shady, the insurance lawyer can also take the steps necessary to initiate relevant legal actions.

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After receiving an offer for an insurance settlement, it is imperative to consult a lawyer immediately. A lawyer would be able to examine the insurance settlement and guide you as to whether to accept the settlement or not. In this way, an attorney consultation is of the utmost importance when presented with a settlement offer

After receiving an offer for an insurance settlement, it is imperative to consult a lawyer immediately. A lawyer would be able to examine the insurance settlement and guide you as to whether to accept the settlement or not.

Adv. Umapathi Natarajan

Adv. Umapathi Natarajan


4.9 | 151+ User Reviews

With 24 years of independent practice, Advocate Umapathi Natarajan has gained extensive experience in handling legal cases while providing legal consultancy and advisory services with a focus on achieving results in an ethical and professional manner. Advocate Umapathi Natarajan, who can speak English, Tamil, and Telugu, possesses excellent communication skills that enable him to articulate arguments persuasively in both written and verbal forms.

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