Car crashes have the potential to be financially devastating, which is one reason why New York mandates vehicle insurance coverage. Every driver has to have a policy on their vehicle to register with the state or legally drive on public roads.
In the event of a crash, you may be able to make a claim against both the other driver’s policy when they are at fault and also against your own policy in certain scenarios. If the insurance company responds to your claim by offering you a lump-sum settlement, you should look carefully at the terms before accepting it.
Otherwise, you may end up needing coverage and not having any available to you because you already settled your claim.
How car insurance settlements work
Every policy has specific limits on how much the insurance company will pay for different expenses. You can negotiate for compensation up to the policy limit that applies. The insurance company will want to pay as little as it can without running afoul of bad faith insurance laws.
A settlement is the perfect way to diminish company liability without triggering penalties and lawsuits. When a claimant accepts a settlement, they typically have to sign a release. The insurance company will no longer be liable for future expenses, even if you have tens of thousands of dollars in additional medical bills that you didn’t expect and the settlement was for a fraction of the maximum policy limit.
While you may be able to go back to court and show that the settlement was bad faith insurance, it could take months of litigation to do so. There’s also no guarantee of success when you try to fight back after accepting a settlement.
Settlements typically require analysis and negotiation
People hurt in car crashes should never assume that the insurance company wants to do what is best for them. Instead, they need to scrutinize any settlement offer carefully to ensure they don’t end up with crash expenses that insurance won’t pay.
Accepting a settlement too quickly after a car crash puts you at risk of uncovered losses. You need to take the time to evaluate your expenses so that you know what the crash will cost you and then negotiate with the insurance company by countering a low offer with a more reasonable settlement amount. Knowing your rights and the possible risks after a car crash will help you better handle communication with the insurance company.