What Happens If You Refuse a Settlement Offer?
Request Free ConsultationThe first settlement offer in a personal injury case is very rarely the best one. Insurance companies typically start with a low figure, hoping you’ll accept before you talk to a personal injury lawyer or fully understand the value of your claim.
If you refuse a settlement offer, you’re not ending the conversation. You’re starting a negotiation. Most cases settle for significantly more than that initial figure, and rejecting an inadequate offer is often the first step toward fair compensation.
Your lawyer can evaluate whether an offer reflects your actual losses and guide you through the process of pursuing compensation that accounts for the full, fair, and complete compensation you need.
Key Insights on Refusing a Settlement Offer
- Rejecting a settlement offer doesn’t mean your case is going to trial. It usually means negotiations continue.
- Insurance companies expect you to reject their first offer. The initial number is almost never their final position.
- You have the right to refuse any offer that doesn’t adequately cover your medical expenses, lost income, and other damages.
- Accepting a settlement is final. Once you sign, you give up the right to seek additional compensation later.
- Hiring an experienced trial attorney gives your case legal authority and levels the playing field, improving your position to secure a significantly higher settlement.
Why Insurance Companies Start with Low Offers
Insurance adjusters don’t see it as their job to help you recover. They’re trying to close your claim for as little as possible. That first offer often arrives quickly, sometimes before you’ve even finished medical treatment or know the full extent of your injuries.
There’s a reason for the rush.
Insurers know that individuals who have been injured are usually under significant financial strain. Medical bills pile up. Paychecks stop coming. A quick settlement, even a small one, might seem like relief. But accepting too early almost always means leaving money on the table, sometimes a lot of it, and that leaves the door wide open for future financial distress.
The initial offer rarely accounts for future medical care, ongoing rehabilitation, or the long-term impact of your injuries on your ability to work. It also tends to minimize or ignore non-economic damages such as pain and suffering, and diminished quality of life.
When you refuse that first offer, you signal that you understand your claim has value. That shifts the dynamic. The insurance company now knows it must negotiate seriously or risk facing a lawsuit.
What Actually Happens After You Reject an Offer
Refusing a settlement offer doesn’t trigger any dramatic consequences. The process simply continues, typically through a series of counteroffers exchanged between your attorney and the insurance company.
Your attorney submits a counteroffer
After rejecting an inadequate offer, your lawyer prepares a counteroffer supported by documentation of your damages. This includes medical records, bills, proof of lost wages, and evidence of how the injury has affected your daily life. The goal is to justify a higher number with concrete evidence the insurer cannot easily dismiss.
The insurance company responds
The adjuster reviews your counteroffer and supporting evidence, then responds with either an increased offer or a request for additional information. This back-and-forth may continue through several rounds. Each exchange typically brings the numbers closer together as both sides work toward a resolution.
Negotiations may take weeks or longer
Settlement negotiations don’t follow a fixed timeline. The process depends on factors such as the severity of your injuries, the clarity of liability, the amount of insurance coverage available, and the extent to which the two sides differ in their valuation.
Your attorney’s goal is to resolve your case as efficiently as possible without accepting less than you need.
Throughout this process, you remain in control. No settlement happens without your approval. Your lawyer advises you on whether each offer is reasonable, but the final decision is always yours.
Reasons to Refuse a Settlement Offer
Not every offer warrants rejection, but many do. Knowing when to say no protects you from accepting less than your case is worth.
The following situations often justify refusing an offer:
- The settlement offer doesn’t cover your medical expenses. If the settlement won’t pay for treatment you’ve already received or care you’ll need in the future, it’s too low.
- You’re still receiving treatment. Settling before you reach maximum medical improvement means guessing at future costs. That guess usually favors the insurance company, not you.
- Lost income isn’t fully accounted for. Your settlement should reflect wages you’ve already lost plus future earning capacity if your injury affects your ability to work.
- Non-economic damages are ignored or minimized. Pain, emotional distress, and loss of enjoyment of life have real value. An offer that dismisses these losses doesn’t reflect the true impact of your injury.
- Liability is clear and the offer is still low. When the other party is obviously at fault and insurance coverage is adequate, a lowball offer is simply a negotiating tactic.
For most claimants, hiring an attorney is the pivotal decision that significantly improves their chances of obtaining the maximum settlement.
How a Lawyer Strengthens Your Position in Negotiations
Insurance companies negotiate injury claims every day. Most injured people do this once in their lives, if ever. That imbalance works in the insurer’s favor, unless you have experienced representation.
An attorney changes the equation in several ways:
- Accurate claim valuation. Lawyers know what similar cases have settled for and what juries in your area have awarded at trial. This knowledge prevents you from accepting an offer that falls far below what your case is actually worth.
- Managed communication with insurers. Adjusters are trained to ask questions and use your answers against you. When a lawyer handles these conversations, you avoid making statements that could undermine your claim.
- The credible threat of litigation. Insurers know that represented claimants are more likely to file suit if negotiations fail. That threat, even if it never materializes, often motivates better offers. Insurance companies prefer to settle rather than face the expense and uncertainty of a courtroom.
Experienced representation levels the playing field and often results in significantly higher settlements than claimants achieve on their own.
When Refusing an Offer Might Lead to Litigation
Most personal injury claims settle without ever reaching a courtroom. Filing a lawsuit is typically a last resort, used when the insurance company refuses to offer fair compensation despite strong evidence supporting your claim.
If negotiations stall completely, your attorney may recommend filing suit. This doesn’t mean you’re committed to a trial. In fact, many cases settle after a lawsuit is filed, sometimes even up to the jury’s verdict or the judge’s decision.
However, the act of filing often motivates insurers to negotiate more seriously because litigation costs them time and money regardless of the outcome.
Once a lawsuit begins, both sides enter a phase called discovery. During discovery, attorneys gather evidence through depositions, document requests, and interrogatories. This process often reveals information that strengthens your position or exposes weaknesses in the defense, potentially leading to more favorable settlement offers.
Even if your case proceeds toward trial, settlement discussions typically continue. Judges often encourage resolution, and many courts require mediation before trial. Mediation brings both parties together with a neutral third party who helps facilitate a compromise. It’s less formal than court, less expensive than trial, and resolves many cases that seemed destined for a jury.
Trial remains an option if the insurer and other liable parties refuse to offer you a fair deal. A jury then decides both liability and damages. While trials carry uncertainty, they also offer the possibility of a larger award than any settlement offer. Your attorney can help you weigh these risks and benefits based on the specific facts of your case.
The Risks of Accepting a Settlement Offer Too Quickly
Refusing a settlement offer carries far less risk than most people assume. Accepting one too quickly, however, can cause lasting harm.
When you sign a settlement agreement, you typically sign a release that ends your legal claim permanently. If your injuries turn out to be worse than expected, if you need surgery six months later, or if you discover you can no longer work in your occupation, you will have no recourse.
This is why reaching maximum medical improvement before settling matters so much. Until your doctors can say your condition has stabilized, neither you nor anyone else knows the true cost of your injury. Settling before that point means gambling with your future.
Insurance companies understand this dynamic perfectly. Their early offers exploit it. They’d rather pay you a small amount today than a fair amount later, when the full picture of your damages becomes clear.
Patience protects your interests. Refusing an inadequate offer preserves your ability to pursue compensation that actually reflects your losses.
What Full, Fair, and Complete Compensation Looks Like
A fair settlement accounts for every way your injury has affected your life, not just the expenses you’ve already racked up. Your attorney calculates the full value of your claim by examining all the factors below. That number becomes the baseline for evaluating any settlement offer. If an offer falls significantly short, refusing it is a sensible decision.
Economic damages
These are measurable financial losses with clear documentation. A fair settlement should account for all of the following that apply to your situation:
- Medical bills, hospital stays, and emergency room visits
- Prescription medications and medical equipment
- Physical therapy and rehabilitation costs
- Future medical care and ongoing treatment
- Lost wages from missed work
- Reduced earning capacity if your injury limits future employment
- Property damage, such as vehicle repair or replacement
Economic damages form the foundation of most personal injury claims because they’re relatively straightforward to calculate and prove with receipts, pay stubs, and medical records.
Non-economic damages
These address the human cost of your injury. They’re harder to quantify than medical bills, but they’re just as real and just as compensable:
- Pain and suffering
- Emotional distress, anxiety, and depression
- Loss of enjoyment of life
- Loss of consortium (impact on your relationship with a spouse)
- Scarring or permanent disfigurement
- Loss of independence or ability to perform daily activities
Insurance companies often minimize non-economic damages in their initial offers. An experienced attorney knows how to document and argue for these losses effectively.
Wrongful death damages
When a personal injury results in death, surviving family members may pursue a wrongful death claim. Compensation in wrongful death cases typically includes:
- Funeral and burial expenses
- Medical bills incurred before death
- Lost financial support the deceased would have provided
- Loss of companionship, guidance, and care
- Grief and emotional suffering of surviving family members
Colorado law specifies who may file a wrongful death claim and imposes strict deadlines for doing so. An attorney can help surviving family members understand their options and pursue fair compensation during an incredibly difficult time.
How Does Comparative Fault Affect Your Settlement?
If the insurance company argues you share some blame for your injury, that doesn’t necessarily destroy your claim. Most states, including Colorado, follow comparative fault rules that allow you to recover damages even if you were partially at fault.
Under Colorado’s modified comparative fault system, you may still recover compensation as long as your share of responsibility doesn’t exceed 49%. Your award is reduced by your percentage of fault, but you don’t forfeit everything.
Insurance companies sometimes exaggerate a claimant’s fault to justify lower offers. They may claim you were distracted, failed to take reasonable precautions, or contributed to the accident in some other way. An experienced attorney knows how to counter these arguments with evidence and protect the value of your claim.
Don’t let accusations of shared fault pressure you into accepting less than you need. These tactics are often negotiating strategies rather than accurate assessments of what happened.
Questions Clients Often Ask About Rejecting a Settlement Offer
Does refusing a settlement offer mean I have to go to court?
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No. Rejecting a settlement offer simply continues negotiations. Most personal injury cases settle without going to trial. Filing a lawsuit is an option if negotiations fail, but even then, many cases resolve before reaching a courtroom.
How long do I have to decide on a settlement offer?
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Settlement offers often come with a deadline, commonly around 30 days, though this is negotiable. You’re not required to decide immediately. Your attorney can request additional time, especially if medical treatment is ongoing or evidence is still being gathered.
What is the statute of limitations for personal injury cases?
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Deadlines vary by state and case type. In Colorado, you generally have three years from the date of a motor vehicle accident and two years for most other personal injury claims. Missing these deadlines usually prevents you from pursuing compensation.
How much does a personal injury lawyer cost?
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Fuicelli & Lee works on a contingency fee basis. You don’t pay anything upfront. We only collect a fee if we recover compensation for you, and the fee is a percentage of your settlement or verdict.
What if the insurance company refuses to negotiate after I reject their offer?
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If negotiations stall, your attorney may recommend filing a lawsuit to push the case forward. Litigation often leads to renewed settlement discussions. Mediation or arbitration may also help resolve the dispute without a full trial.
What’s the difference between mediation and arbitration?
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Mediation uses a neutral facilitator to help both sides reach a voluntary agreement, with no binding outcome unless a settlement is reached. Arbitration is more formal and results in a binding decision made by an arbitrator, similar to a judge.
Take the Next Step Toward Fair Compensation
Fuicelli & Lee has recovered tens of millions of dollars for injured clients across Colorado, including six- and seven-figure settlements and verdicts that far exceeded the initial offers. We prepare every case as if it’s going to court, and insurance companies know it.
That preparation gives our clients leverage at the negotiating table and confidence if a case goes to trial. If you’ve received a settlement offer that doesn’t reflect the true value of your injuries, call us at (303) 444-4444 or contact us online for a free consultation with a personal injury lawyer.