Recognizing the lowball.

Why insurance companies lowball first

It's a numbers game. Insurance carriers settle thousands of claims a week. A meaningful percentage of injured people will accept the first offer — particularly when they're hurting, can't work, and have bills piling up.

If 30% of claimants accept the first offer at 25% of fair value, the carrier saves enormous sums system-wide. The 70% who push back and negotiate eventually get closer to fair value — but the strategy still pays because of the volume of early-accepters.

The first offer is a screening device. Adjusters are trained to test whether you'll take the easy money. If you do, they pocket the difference. If you don't, they begin a more serious negotiation — but rarely starting from the first number.

This is true everywhere, but it's especially true with the at-fault driver's carrier in Texas and New Mexico. Your own carrier (in UM/UIM claims) may be more measured initially, but the principle is similar: never assume the first offer reflects what your case is worth.

Three telltale signs you're being lowballed

Sign 1: The offer comes fast

A genuine attempt to fairly value your case requires complete medical records, projected future treatment, lost wages documentation, and an assessment of permanent impairment. None of that is possible in the first 30-60 days. An offer made before all medical treatment is complete is almost certainly a lowball.

Sign 2: The offer is verbal or vague

A serious offer includes a written demand letter from your side and a written response from the insurer, broken down by damages category — medical bills, future medical, lost wages, pain and suffering, etc. A casual phone offer of "we can probably do $25,000" is not a real offer; it's a probe.

Sign 3: The offer is "all-in" or "to make this go away"

Adjusters use this framing to pressure quick acceptance: "We can wrap this up today for $20k." The framing implies that the offer is a favor, that it's time-limited, and that going through the proper claims process would somehow be worse. None of that is true.

The math: full value vs. first offer

Let's say you have:

• $25,000 in medical bills (paid by health insurance, but with a lien)
• $8,000 in lost wages (4 weeks off work)
• $12,000 in projected future treatment (3 PT sessions/week for 12 weeks, plus a follow-up MRI)
• Ongoing pain that may require an epidural injection ($3,500)

Total economic damages alone: ~$48,500.

Plus pain and suffering, loss of enjoyment of life, and (depending on severity) potential future surgery — for a soft-tissue case with disc involvement, total case value might range $90,000-$180,000 depending on whether surgery becomes necessary.

The insurance company's first offer? Often $15,000-$25,000.

That's 10-25% of fair value. That's the lowball.

Why “we’ll pay your medical bills” is misleading

A common adjuster pitch: "We'll cover your medical bills — what more do you want?"

What "medical bills" means matters. Your bills aren't just what the hospital charged. They include:

• The full billed amount (often higher than what insurance paid)
• Future medical costs related to the injury
• Medical liens (your health insurance's right to be reimbursed)
• Out-of-pocket co-pays, deductibles, and uncovered services

And "medical bills" is just one damages category. A fair settlement also accounts for:

• Lost wages — past and future
• Loss of earning capacity (if your injuries affect your ability to work long-term)
• Pain and suffering (physical and emotional)
• Loss of enjoyment of life
• Permanent impairment or disfigurement
• Loss of consortium (if the injury affects a spouse/family relationship)

An offer that only addresses medical bills — or only the "covered" portion of medical bills — is by definition incomplete.

The release form trap

When an insurance company makes an offer, they typically attach a release form. Signing the release ends your right to bring any future claim related to the accident — even if new injuries are discovered later, even if your existing injuries get worse, even if you find out the at-fault driver had additional insurance you didn't know about.

Releases are broadly written. A standard release waives all claims, known or unknown, against the released parties — forever.

Never sign a release without an attorney's review. Many serious injuries (TBI, disc problems, mental health consequences) don't fully manifest for months. A signed release prevents you from being compensated for them when they do.

How to counter a lowball offer

The proper response to a lowball isn't to counter with a slightly higher number. The proper response is to make a thorough demand based on:

• Complete medical records
• Treating physician statements about prognosis and future care needs
• Wage loss documentation
• Expert opinions on future earning capacity (if applicable)
• Photographs and journal entries documenting pain and impact on daily life
• Comparable verdicts and settlements in similar cases

A thorough demand letter — typically 10-20 pages with attachments — does several things at once:

• Establishes your case is being handled by competent counsel who will not accept a lowball
• Documents your damages in a way that's hard for the adjuster to dispute internally
• Forces the carrier's reserve-setting process to account for the real value of your case
• Sets up Stowers exposure in TX (where applicable) or its equivalent

Read about the Stowers doctrine in Texas →

When to walk away from settlement

Not every case settles. Sometimes the gap between the carrier's best offer and fair value is too wide, and filing suit is the right move.

Reasons to walk away from settlement and litigate:

• Best offer is still less than 60-70% of conservative case value after thorough demand and multiple negotiations
• The carrier is denying liability altogether when the evidence is clear
• The statute of limitations is approaching and the carrier is dragging its feet
• The case has significant policy limits available that the carrier won't pay
• You've reached MMI (maximum medical improvement) and future damages are now clear

Filing suit doesn't mean trial. The vast majority of personal injury suits still settle — but they settle after suit is filed and discovery has begun, often at multiples of the pre-suit offer.