The Insurance Company Offered Me a Check. Should I Take It?

Few things are more upsetting than an automobile accident. Beyond the damage to your car, you have to consider how you’ll get to work and run everyday errands. And what if you were injured? On top of repair bills, service fees (i.e., mowing the yard, housework), and possible loss of income, medical bills pile up.

checklistIn these dire situations, it’s tempting to take the first check your insurance company offers just to get your life moving again. Don’t do that. Once you sign on the dotted line, you’ve removed your ability to seek further compensation, with very few exceptions.


Before you accept that check, talk to an experienced car accident lawyer. They will help you discuss your options, assess the total damages your accident could entail, and help you predict what future costs might arise in the future.

Why Would I Reject the Check the Insurance Company Offers?

Your insurance company’s first concern is not you. It’s paying out as little as possible while getting the issue over and done with efficiently.

While the insurance adjuster might be friendly and helpful, their job is to make sure as little money goes to a claimant as possible.

If they can keep the claim from going to the courts and dragging things out, even better.Hence, many insurers will make claimants wait weeks or more with no updates on their claim, only to dangle a check in front of them in hopes they’ll sign.

Usually, that check only pays for a portion of their damages and can leave them on the hook for costs like lost wages and long-term medical rehabilitation.

Why Do People Take The First Check?

There are a number of reasons why someone who’s just been in a serious car accident takes the first compensation offered by their insurance company, and they’re all understandable.

They just want the affair to be over and get on with their lives. Bills are piling up, they can’t work and they need money fast. They don’t want to be the “type of person” who files a lawsuit because of the stigma surrounding it.

The truth is, people who file lawsuits want what’s fair under the law. Again, your insurance company’s bottom line depends on paying out less money than they take in, so they’re not inclined to offer much on the first go around. Apart from this concern, once things seem to settle down for you, more costs may arise.

Particularly medical costs, as a serious automobile accident can cause long-term damage to a person’s body that may not be immediately apparent. Once the claimant takes that check, their legal path to recover is all but sealed off, and any medical expenses that arise are no longer the responsibility of your insurance company.

Typical expenses that aren’t considered in an initial insurance settlement offer include:

  • Hospitalization costs
  • Specialist treatment, including surgery
  • Physical therapy
  • Long-term care
  • Lost wages
  • Pain and suffering

The first check offered might be too low to cover these expenses, as well as ones that aren’t immediately apparent.

Medical problems that stem from an accident can cause other unforeseen problems down the road. To help you know with more certainty whether or not an insurance company’s first offer reasonably covers your losses, it helps to understand the categories of damages available in a typical car accident injury case.

Compensatory Damages Versus Punitive Damages: What’s The Difference?

Generally, there are two types of damages a lawsuit addresses, compensatory and punitive damages.

accident insurance check


Compensatory Damages

Compensatory damages are those awarded to compensate a victim for what is lost, both economic and noneconomic. Economic damages, called “special damages,” account for dollars-and-cents losses the accident victim experiences.

They are usually fairly straightforward to calculate. Medical bills and repair costs can be quickly tallied up with receipts and estimates. The only danger is neglecting to claim more obscure costs, like medical care contractors, or predicting future costs, like rehabilitation.

Economic compensatory damages include:

  • Medical treatment
  • Income loss
  • Property loss

Non-economic damages, called “general damages,” may be subjective and more difficult to calculate.

Non-economic compensatory damages include:

  • Pain and suffering
  • Emotional distress
  • Loss of enjoyment
  • Loss of consortium

Compensatory damages are awarded in an attempt to help the claimant get back what has already been spent and what has been lost due to inability to engage in normal activities, including work. This encompasses medical bills, car repair, and lost wages.

Claimants may also be compensated if their enjoyment of life has been reduced due to a car accident, including changes in their relationship with their spouse, family, and friends.

Punitive Damages

Punitive damages are not meant to compensate for any economic losses or physical stress. They are intended to punish the party at fault for the accident. Importantly, punitive damages are not awarded in cases where a car accident injury claim was settled out of court.

The case must go through a trial process, and punitive damages are awarded by a jury at the conclusion of a verdict in favor of the plaintiff (injury victim). Punitive damages are rarely awarded in anything but the most egregious of cases, and most states have a cap. Florida, for instance, limits the money paid in punitive damages to either three times the amount of compensatory damages or $500,000, whichever is greater. However, a Nashville car accident lawyer would have to follow those state laws; so be sure to talk to a lawyer in your state. 

Damages caps like these are intended to avoid juries awarding massive payments, some of which simply cannot be met by the at-fault party. A number of factors go into a verdict deciding how much is paid out in punitive damages after an accident. Already paid medical expenses, future medical expenses, time spent recuperating, loss of income from work, or loss of enjoyment are all considered.

Punitive damages may be available if your accident involves extreme reckless conduct or negligence. Because of this possibility, it’s always worth evaluating your case with the help of an experienced car accident attorney before you accept a liability insurer’s first settlement offer.

How Are Damages Calculated?

Settlement offers are made in writing and must state the total of compensation being offered before the claim can be settled. Insurers make settlement offers and are often responsible for paying legal fees when their policyholders cause harm.

Different insurers use different settlement formulas to determine the appropriate amount of compensation. The aim is to make it easier to determine non-economic damages, such as for pain and suffering or emotional distress.

One common formula is the per-diem formula, which takes into account the number of days the victim was in pain, frequently using their wages as a guide to pay a daily rate. Another method involves calculating actual losses and then applying this amount by a “pain multiplier”, typically a number between 1.5 and 5.


Other factors that are considered include:

  • Severity of injuries
  • Costs of reasonable and necessary medical expenses
  • Loss of past and future wages
  • Degree of fault for the accident. Florida, for instance, follows the “pure comparative negligence doctrine” laid out by Statute 768.81, which means damages can be barred or reduced according to your degree of fault.
  • The types of insurance both parties have
  • The amount of evidence and documentation you provide
  • Your attorney’s ability to argue your case


While your insurance company may use these factors and formulas to determine how much compensation they payout, you are under no obligation to take their first offer. Like all businesses, they exist to make money. Additionally, speak with a Fort Lauderdale car accident lawyer for more information. 

Accordingly, they may offer a low-ball claim to keep from cutting into their profit margin.

Have questions? Call our accident attorneys at (800) 560-5059 anytime,
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About The Author

Michael Steinger

Michael Steinger

The Florida BarFlorida Bar Young Lawyers DivisionMillion Dollar Advocates ForumMillion Dollar Advocates ForumBest Workers Compensation Attorneys in MiamiBest Car Accident Lawyers in MiamiLawyers of distinction

MICHAEL S. STEINGER, founding partner of Steinger, Greene & Feiner, believes in representing real people, not big businesses. Since the firm’s creation in 1997, Steinger, Greene & Feiner has never represented an insurance company or large corporation, and he vows to keep this promise. Over the course of his career, Michael has handled thousands of Florida accident cases, recovering millions of dollars for his clients and earning him membership into the Multi-Million Dollar Advocates Forum. Staying up-to-date on the ever-evolving laws protecting injury victims and their families, Michael is an active member of the American Bar Association, the Palm Beach, and St. Lucie Bar Associations, and sits on the Auto Insurance Committee of the Florida Justice Association.