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Should You Accept or Negotiate a Pre-Settlement Offer?

Posted in Car Accidents on February 4, 2023

Louisiana’s legal process has made it more difficult for car accident victims to receive a fair settlement through the passage of Act 37. Signed into law in 2020, the Civil Justice Reform Act became effective in January 2021 for car accident personal injury claims against insurance companies. 

Suppose an insurance company is unwilling to offer a fair settlement. In that case, plaintiffs could file a lawsuit in a Louisiana court, possibly seeking relief from a trial by a judge if the amount sought was less than $50,000. However, if the claim was for more than $50,000, a jury trial was required to decide the case’s outcome. Act 37 changes the jury trial threshold to $10,000. This new law also causes many other problems for the plaintiff if there’s no choice but to have a jury decide the case.

Fair Personal Injury Settlements May Become More Difficult Under the Threat of Jury Trials

Act 37 makes it more challenging to arrive at a fair settlement because the law makes it more favorable for insurance companies if a jury trial has to be initiated. The plaintiff may want to take a less-than-fair settlement because they cannot afford the advanced deposits required to start a lawsuit that juries will decide rather than a judge. These advanced deposits cover the cost of the selection and service of jurors. The costs can vary depending on where the trial is and how long the trial lasts.

Other sections that make up this law favor the insurance companies in these ways:

  • The plaintiff now has to prove that they mitigated their injuries without fault, such as wearing a seat belt when the accident occurred.
  • Cap certain medical expenses.
  • Limit the discussions of insurance coverage during the trial.

So if a settlement cannot be agreed upon, a lawsuit will have to be filed, taking even more time and costs to recoup compensation for your injuries. While costs are building up and no money is coming in, a choice must be made. The plaintiff can settle for less than what is fair or consider a pre-settlement offer or other financing methods to see the case through.

What is a Pre-Settlement Offer?

A pre-settlement offer is an advance on what the case might be worth. Companies specializing in these advances or loans will provide an advance on what they think could be recovered. However, there are advantages and disadvantages to getting this type of advance.


  • Pre-settlement offers buy time to wait for a fair settlement.
  • Living expenses can be covered.
  • The advance doesn’t have to be paid back if there is no recovery.
  • If the recovery was less than expected, the pre-settlement company takes the loss.
  • The transaction process takes about 24 to 48 hours.


  • High-interest rates of about 20% to 60% annually
  • Fees, in addition to high-interest rates, will add up to more than the advance that was taken.
  • When obtaining compensation from a claim and after paying the attorney and the advance back, there may be little money left over, if any.

Factors To Consider When Evaluating A Pre-Settlement Offer

The first thing to do is consider the case’s estimated value based on the injuries and damages suffered because of the defendant’s negligence. These injuries and damages can include:

  • Medical expenses
  • Property damage
  • Lost wages and future lost wages
  • Impact on quality of life
  • Pain and suffering
  • Costs associated with jury trials, if needed

Once the damages are added up, the next step is to file a lawsuit for that amount. Filing a case is required to procure a pre-settlement advance. However, the good news is that a claim can still be settled before the start of the trial, making the trial unnecessary. 

When a pre-settlement advance or loan company extends an offer, they base their offer on factors, including:

  • How much insurance coverage does the defendant have
  • How much can the plaintiff potentially be compensated in damages
  • Confidence in the defendant’s fault for the plaintiff’s injuries
  • The plaintiff’s cash requirements

These factors will determine the amount of the advance offered, which could be a percentage or a fraction of the case’s estimated value.

The loan’s terms are other factors to consider when evaluating a pre-settlement offer. If vetting different companies does not result in comfortable terms, consider other forms of financing that may have better interest rates, such as a personal bank loan, a home equity line of credit, or credit cards to help with expenses. While cash advances from credit cards are expensive, they are still less costly than a pre-settlement offer. 

How To Negotiate With An Insurance Adjuster

Insurance Adjuster Law

So, now that financial help is available to relieve the stress of not being able to contribute to living expenses, this provides firmer ground in which to negotiate with an insurance adjuster. Have a settlement amount in mind, adding up the costs and noneconomic damages suffered. Refrain from offering the minimum amount that will be the bottom line. Instead, submit an amount higher so there’s room for negotiation.

Offers and Counteroffers

Once the settlement amount is submitted, of course, the insurance adjuster will counter with a lower amount. The desired result is to reach a consensus of a number in the middle of the two settlement amounts but not lower than the plaintiff’s bottom line.

The first offer the insurance adjuster presents should never be accepted and should be countered. If the insurance adjuster’s first offer was reasonable but too low, counter with a lower number to show a willingness to compromise. However, if the insurance adjuster’s first offer is ridiculously low, ask the adjuster to justify that amount in writing.

Settlement Agreements

Once a settlement amount has been agreed upon, confirm the settlement terms in a letter and send it to the adjuster. The letter can reiterate the amount that was settled, what injuries or damages the settlement covers, and when the documents are expected to be received.

Minimize Financial Stress During Negotiations

Allowing for time and minimizing financial stress during negotiations is the most important part of negotiating with an insurance adjuster. Trying to negotiate a settlement under financial distress and desperation will not work. It may result in a lower payment that will not compensate for all the damages suffered.

Taking advantage of the financial assistance available to relieve financial stress during negotiations will net a fair settlement that will fully compensate for damages. Contact the firm today at (504) 500-5000 or at our website to schedule an appointment.