The first settlement offer from a workers’ comp adjuster may be unfairly low. Here’s how to recognize and respond to lowball offers.
Injured workers sometimes choose to settle their workers’ comp claims instead of receiving monthly benefits. Settlements are usually for a one-time lump sum or structured settlement.
Workers’ comp insurance companies can be aggressive and often give low first settlement offers. They hope you quickly accept the offer so they can save money and close your case.
If you know the extent of your injuries and are willing to settle, you can respond to the adjuster’s first offer with a fair counteroffer. From there, you will negotiate to reach a reasonable settlement.
An experienced workers’ compensation lawyer can determine how much you should expect from a settlement based on the severity of your workplace injury, the amount of work you’ve missed, and your permanent disability status.
Six Signs the First Settlement Offer is Too Low
Some claims adjusters approach the settlement process reasonably. If a worker was clearly injured at work and suffered verifiable injuries, the adjuster may propose a fair settlement out of the gate.
But insurance companies are in the business of making money, not looking out for an injured worker’s best interest. Be wary if the adjuster makes an unsolicited settlement offer. Watch out for any of these six signs that might indicate the offer is unfairly low.
1. The Adjuster Makes a Quick Offer
It usually takes a few weeks to a few months for a workers’ comp case to settle. The adjuster might make a quick lowball offer, banking that you haven’t fully considered all of the future medical expenses associated with your injury.
If you’ve been out of work for a few months and have bills piling up, the adjuster might offer a lump-sum settlement knowing that you need money.
Even if you think you might be back to work in a few more weeks, there’s more at stake than wage loss benefits. What if you end up needing physical therapy or surgery for your work injury?
If the adjuster can get you to waive future medical coverage as part of the settlement, the insurance company comes out ahead.
2. They Dismiss Your Medical Evidence
Sometimes an insurer will make an offer while dismissing specific evidence in your case. They may dispute your doctor’s disability rating of your injury, or suggest you should have been able to return to work.
Adjusters use this tactic to try and convince you that your claim is worth less than you thought. If they’re successful, they’ll talk you into accepting an offer that is below a reasonable settlement for your type of work injury.
When the adjuster challenges your medical status, or threatens to send you for an Independent Medical Evaluation (IME), it’s time to contact an experienced workers’ compensation attorney.
3. The Offer Doesn’t Include All Applicable Losses
The total settlement amount should include compensation for unpaid medical bills, future medical care, lost wages, and other out-of-pocket costs that a worker incurred.
If an offer doesn’t adequately consider all of these, it’s likely under par.
4. They Give No Explanation for the Offer Amount
Some insurers routinely try to avoid paying certain injury-related costs. They’ll offer a lump-sum settlement with no breakdown to explain how they arrived at that number.
It’s up to you to know the full value of your workers’ compensation claim, including correct wage replacement benefit calculations, mileage reimbursement for traveling to medical appointments, the cost of assistive devices, and more.
5. The Adjuster is Pressuring You to Settle
Adjusters typically follow a lowball offer with intense pressure for you to accept it. They may say, “You won’t get another offer this good,” or “We’re doing you a favor. I’d take it if I were you.”
Adjusters tend to pressure claimants when they know they’re not represented by a workers’ compensation lawyer. Some adjusters will engage in underhanded tactics like holding back on your wage benefits. They’re willing to risk having to pay a penalty if they can “starve” you into being desperate enough to take whatever they offer.
6. The Adjuster Starts Casting Blame or Guilt
Adjusters might try to get you to take the offer by dumping guilt on you for even filing a claim. The adjuster may say you’re making your employer lose money, or that your workers’ comp case is harming your co-workers.
Don’t let an adjuster bully you into accepting an offer. Stand firmly by your claim and stay rooted in asking for a fair settlement.
If you have questions about workers’ comp or you’re unsure about a potential settlement, you can always get a free consultation with a local attorney.
How to Evaluate and Respond to a First Offer
Severe or permanent injury claims should always be handled by a worker’s comp attorney. Most attorneys offer free consultations, so it costs nothing to get personalized legal advice. Also, most states limit the attorney fees charged for workers’ comp cases, so you won’t have to worry about losing a big chunk of your settlement.
If you’re recovering from relatively mild injuries and your doctor doesn’t think you’ll suffer any lasting effects, it should be easier to decide on your own if a settlement offer is fair.
Factors That Influence Workers’ Comp Claim Values
Each worker’s comp claim is unique. The severity of your injuries and your personal circumstances dictate what might be a “fair” settlement for your claim.
Injury Severity and Prognosis
Suppose you suffered a minor personal injury with a few days off work. In that case, you’d receive an offer for much less than if you suffered a significant injury that requires extensive future medical treatment.
Once you receive an offer, consider the nature of your injury and the actual impact it will have on your future ability to work.
Maximum Medical Improvement (MMI)
Claimants reach MMI when their physician determines their injuries will not improve with further treatment. They may need ongoing treatment to prevent the worsening of their condition.
If an injury hasn’t resulted in a permanent partial disability or permanent total disability, the treating physician will determine an permanent impairment rating for the affected body part.
Many states’ workers’ compensation laws use a “schedule” of injuries to calculate the wage replacement part of a settlement. For example, a settlement might be based on a scheduled 288 weeks allowed for knee injuries x 50% impairment = 144 weeks of the workers’ weekly wage benefit.
Dissatisfaction With an Employer
Some workers are dissatisfied with their employers after suffering a work-related incident. No matter the source of frustration, a settlement offer that’s a little low may seem fair if a worker wishes to part ways with their employer.
Unless you’ve suffered lingering injuries, it may be worth it to you to accept the settlement and move on.
Lost Wages and Pain and Suffering
Fair settlement offers will not compensate injured employees for the total value of their lost wages. Wage replacement benefits are about two-thirds of your pre-injury average weekly wages.
However, your worker’s comp wage benefits are generally not taxable. So don’t get discouraged if a settlement offer seems like it’s not fully compensating you for your lost wages.
Workers’ compensation benefits don’t include compensation for pain and suffering. Again, don’t reject an offer because you believe it lacks compensation for your pain and grief.
Negotiating a Workers’ Compensation Settlement
Just because the adjuster tries to throw some money at you, you are under no obligation to settle your workers’ comp claim. It’s never a good idea to settle your claim before you know the long-term effects of your injuries.
Negotiating a workers’ comp claim is very similar to negotiating a personal injury claim. Depending on the severity of your injuries, negotiations can take up to a few months before an agreement is reached.
If you decide to handle your claim without an attorney, you don’t have to start with the amount in the adjuster’s first offer. Calculate your wage benefits, the number of weeks your injuries will keep you out of work, out-of-pockets expenses, and any future medical costs. Use the combined value to make your settlement demand.
Once you submit your demand, an adjuster will usually respond in one to two weeks. The adjuster may agree to your demand, or they may counter. Several rounds of negotiations can occur before reaching a settlement agreement. Remain calm and polite during the process, even though it can get frustrating.
Once a worker agrees to a proposed settlement, their state’s Workers Compensation Board must approve it before it becomes final. A workers’ comp judge will review the settlement to ensure the claimant understands it and the payment is fair.
Moving Past a Negotiation Stalemate
Workers’ comp insurance adjusters have tricks and tactics designed to lower your injury payout. Delay tactics are commonly used during settlement negotiations.
There are times when the adjuster may delay answering your questions or responding to a counteroffer. Adjusters often do this to force you into accepting a lower settlement offer out of frustration or desperation.
Adjusters often use the following delay tactics:
- Requesting more paperwork
- Asking for medical records that hold little, if any, relevance to your case
- Telling you they haven’t received documents you already provided
- Informing you that a supervisor is reviewing your claim
If you’re facing one of these tactics, continue contacting the adjuster, but wait a week to ten days. Don’t let them think you can’t hold out much longer without a cash settlement. Emails are better because you’ll have evidence of the communication.
In your email, ask the adjuster about any new details concerning your claim and when you may hear back from them. If the adjuster is telling you they’re waiting to hear from a supervisor, ask for the supervisor’s name, phone number, and email address so you can follow up.
You’re Entitled to Fair Compensation
If you’re still striking out, or just can’t get the adjuster to come off a ridiculously low offer, contact a local workers’ comp attorney. Workers’ compensation lawyers know how to effectively respond to delay tactics and finalize a settlement.
When the insurance company has been withholding your weekly wage benefits to force you into settling, a workers’ comp lawyer can be sure you are fully compensated, including any penalties and late fees the insurance company may owe you.
Don’t let an insurer take advantage of you after an injury. You have the right to talk to a workers’ compensation attorney at any time during the settlement negotiations process.
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