What Happens When an Insurance Company Accepts Liability?

If you’ve been injured in an accident that was caused by someone else’s negligence, one of the first steps in seeking compensation is to determine who was at fault. This establishes liability – meaning who is legally responsible for the accident and your resulting damages.

When the at-fault party’s insurance company accepts liability, it can be a huge relief. It means the insurer agrees their policyholder was negligent and owes you compensation.

But what exactly happens after an insurance company accepts liability? Does it guarantee you’ll get a fair settlement? Unfortunately, it’s not so simple. Here’s what you need to know:

An Admission of Liability is Not a Guarantee of Full Compensation

Simply accepting liability does not mean the insurance company will pay out everything you are owed.

Insurers have tactics to lower settlement amounts, even after admitting their policyholder was at fault. Their goal is to pay as little as possible to resolve claims.

So don’t assume an admission of liability means you’ll get full compensation. There is still often negotiation required to get a fair settlement.

The Insurance Company Will Make the First Settlement Offer

After accepting liability, the claims adjuster may ask how much you want to settle for. But it’s best not to name a figure.

Let the insurance company make the first offer instead. Keep in mind their initial offer will always be lower than the claim is worth.

The adjuster may pressure you to accept a low “take it or leave it” offer. But you have the right to negotiate for a fairer amount.

The Insurer May Dispute Certain Damages

The insurance company could accept liability for the accident itself, but dispute the extent of your damages.

For example, they may argue some of your injuries were pre-existing or not caused by this incident. Or dispute how much income you lost.

They’ll agree their policyholder is liable, but want proof your claimed injuries and losses directly resulted from their negligence.

Settlement Agreements Release the Insurer From Further Liability

Insurance settlements require you sign a release agreeing not to seek additional compensation.

So you can’t come back later and demand more money if you discover further injuries or damages.

That’s why it’s risky settling too early before treatment concludes. You may not know the full extent of your injuries and losses yet.

Contributory Negligence May Lower Your Settlement

The insurer might accept liability, but argue you shared some fault. This is called contributory negligence.

For example, if you were texting when hit by the at-fault driver, they may claim you should bear some responsibility.

In these cases, your settlement will be reduced by whatever percentage of fault is attributed to you.

Next Steps After Liability is Established

• Don’t settle too quickly – Wait until treatment concludes to fully understand your damages.
• Calculate your losses – Add up medical bills, lost income, and other costs to establish your claim’s value.
• Hire a personal injury attorney – They can handle negotiations and make sure your settlement is fair.
• Provide supporting documentation – Supply receipts, reports, and other proof to support your claimed losses.
• Send a demand letter – Have your attorney send a letter detailing your damages and demanding reasonable compensation.
• Negotiate – Be prepared for back and forth negotiation to reach a satisfactory settlement.
• Review the settlement agreement – Make sure the terms are favorable before signing the release.

Protect Your Interests After an Insurer Accepts Liability

An admission of liability is positive, but doesn’t guarantee a fair payout. Protect yourself by hiring an attorney, documenting damages, negotiating persistently, and not settling too quickly.

Thoroughly review any settlement agreement before signing. Releasing the insurer from further liability is permanent, so you want to make sure the amount covers your past and future accident-related costs.

With an experienced personal injury lawyer on your side, you can feel confident your rights are protected and you’ll receive the maximum compensation you deserve – even after the insurer accepts liability.

Frequently Asked Questions

What does an admission of liability mean?

It means the insurance company agrees their policyholder’s negligence caused the accident and your damages. So liability is established – but the extent of your damages may still need to be proven and negotiated.

Should I accept the insurer’s first settlement offer?

No. Their first offer will always be lower than what your claim is worth. You have the right to counter and negotiate a fairer settlement amount.

Can I still get full compensation if I’m partly at fault?

If you share some fault for the accident, your settlement will be reduced by your percentage of contributory negligence. But you can still recover compensation, just a lesser amount.

What if I already settled but my injuries got worse?

Unfortunately, if you signed a settlement agreement releasing the insurer from further liability, you cannot reopen the claim for additional compensation. That’s why it’s crucial not to settle until you fully understand your injuries and losses.

How much time do I have to settle?

There may be a time limit, such as a statute of limitations, on when you can file a lawsuit if a settlement isn’t reached. An attorney can advise you on important legal deadlines.

Should I speak to the insurance company directly?

It’s best to let an attorney handle all communication. Insurers may use anything you say against you to lower your settlement. An attorney serves as your legal representative to protect your interests.

The Bottom Line

Accepting liability is a positive step, but doesn’t guarantee the insurer will pay out fairly or fully. Protect yourself by hiring a personal injury lawyer to handle your claim. With an attorney’s assistance, you can negotiate effectively and maximize your compensation.