Never cash the first check sent by your insurance company.
Receiving an insurance check after a stressful and costly experience can be exciting. A check is immediately cashable and can help you cover expenses right away. However, there’s a reason your insurance company sent the check so quickly, and it wasn’t to be helpful. Insurance companies like to pretend that their first offer is official and final, but that’s not really how the system works.
The first check they send is often a lowball offer, and cashing it is a form of acceptance. If you cash the check, you disqualify yourself from seeking further compensation, even if the insurance company did not honor the full extent of compensation in your policy. You can often earn more if you reject the initial offer and negotiate for a higher settlement.
If you have been injured in a car accident, you can fight back against tempting lowball offers with the help of Nadrich Accident Injury Lawyers. We are here to assist you in your accident aftermath.
Reasons Not to Cash an Insurance Check
That first insurance check is designed to tempt you, but here are the reasons you shouldn’t cash it:
- The check is probably a lowball offer, less than you can earn with a little negotiation
- Time can reveal more damages that need to be covered
- The check is a trap, and cashing it absolves your insurance company of further responsibility to you
- The check might come with a catch
- If they sent the first check, they will send another check if you negotiate a better settlement
Cashing an Insurance Check May Disqualify You From Further Compensation
Most insurance companies include a policy that if you cash an insurance check, you are accepting the company’s full potential compensation and liability. This means once you cash the check, you are likely disqualified from further compensation, even if additional costs or liability matters arise in the future. You will not be able to negotiate for a larger settlement and the insurance company isn’t obligated to help you any further.
The Check Will Likely Be a Lowball Offer
In addition to cutting off further compensation, that first check is usually a lowball offer. Insurance companies stay in business by collecting premiums and paying out as little as possible. They make the first check available and tempting so that customers will accept a smaller payment and then be unable to ask for more.
The lowball offer is often less than your policy could potentially pay out under the circumstances. It is often possible to negotiate a significantly higher settlement if you can resist cashing the first check and work with an experienced personal injury lawyer for a better deal.
Considerations Before You Cash an Insurance Check
When you receive a check in the mail from your insurance before any negotiations have taken place: stop. Consider whether cashing the check is in your best interest before you take it to the bank.
What Is Your Settlement Worth?
Don’t accept an insurance settlement until you know what your accident and settlement should be worth. The value of a settlement will be determined by a combination of factors, including:
- Economic damages – medical costs, car repairs, lost wages, disability, etc.
- Non-economic damages – pain and suffering, trauma, loss of enjoyment, mental anguish, etc.
- Punitive damages – in response to intentional harm or significant neglect on the part of the defendant
Always consult with a car accident attorney to determine the full value of your settlement before you accept an insurance check.
Does The Check Disqualify You From Future Compensation?
In most cases, accepting that first check will disqualify you from future compensation. In fact, it is often printed on the check itself. Look for the phrase “full and final” in your policy, settlement email, or insurance letter or printed on the check. This phrase indicates that the check will be the last compensation you can expect to receive if you choose to cash it.
Was All Evidence Considered?
Often, the first insurance check is sent before all the evidence has been documented and thoroughly considered. In some cases, not all the evidence (such as your long-term medical prognosis) is available by the time that check arrives.
All insurance companies must handle your claim in good faith, which means you can ask them to make sure they have considered the full extent of your injuries, the property damage to your car, the fault of the other driver, and the potential lost wages you experienced before their next settlement offer. If they haven’t or could not have considered all these factors, you don’t want to accept the check because it is likely undervaluing your accident.
What Factors Impact the Value of My Car Accident Settlement?
There are many factors that can impact your claim and what your settlement is worth. It is vital that all these factors be considered and quantifiable before a fair and complete settlement can be reached. These factors include:
- Medical costs
- Rehabilitation expenses
- Vehicle repairs
- Loss of wages
- Property damage
- Pain and suffering
- Temporary or permanent disability
- Disfigurement
- Trauma
- Excessive fault of the other party
What To Do If You Receive a Check From Your Insurance
If you receive a check from your insurance company, don’t cash it right away. First, assess whether the check reasonably matches the value of your claim. Some insurance companies do offer a fair settlement right away, especially if your case is fairly simple with no lasting injuries. However, the more complex the situation and the more medical considerations involved, the more difficult it can be to tell if the check is a fair settlement.
If you aren’t sure whether the check is worth your full and final compensation, your best next step is to discuss the matter with an experienced car accident lawyer before moving forward. You can assess the value of your case together and determine whether you should cash the check or negotiate for a better settlement.
Don’t Cash Your Insurance Check Yet! Contact a Car Accident Lawyer to Maximize Your Settlement
If you have been recently injured in an accident, getting the best insurance settlement is more complex than it seems. That first check may be tempting, but cashing it might not be the best course for your long-term recovery and complete rightful compensation. For legal support in assessing the value of your settlement and negotiating a better offer with the insurance company, call Nadrich Accident Injury Lawyers at (800)718-4658 or contact us online. Our lawyers are here to help you get the accident compensation you deserve.
