The Insurance Company's First Offer Is Too Low. What Do You Do Now? (Colorado)

If the insurance company’s first offer feels too low, it almost always is. Don’t sign anything yet. A first offer is built on what the insurer knows that day (usually a few weeks of medical bills), not on what your claim is actually worth, and once you sign the release, the claim is over for good.

I hear the same story on intake calls all the time. Someone gets hit, and a week or two later Progressive or GEICO calls with an offer: $1,500 plus your medical bills paid. Sometimes $3,000. Sometimes as much as $10,000 toward medical. It sounds like real money when you’re hurting and the bills are stacking up. Then the case gets worked up properly, and it resolves for $25,000, $50,000, or $100,000. Every case is different, but the gap between the first offer and what a case is worth is usually huge.

Why Is the First Offer So Low?

The first offer is low because the insurer makes it before anyone knows what your injuries will cost. That’s the point of making it early.

A few things are going on:

• You’re still treating. Two weeks out, nobody knows whether your neck pain clears up in a month or turns into injections, an MRI, or surgery. If you settle now, every bill after that is yours.
• The offer covers bills, not your claim. In Colorado, an injury claim includes your medical bills, lost wages, and non-economic damages like pain, limits on what you can do, and the disruption to your life. A “$1,500 plus medical” offer pays a small slice of one category and calls it done.
• “Plus your bills” is less generous than it sounds. Often the insurer means it will pay your health insurance lien or negotiate directly with your providers. That way the insurer pays the discounted rates health plans pay, not the full billed amount, and the savings go to the insurer instead of you. Handling the bills and liens is part of what a lawyer does to get you the most out of a settlement.
• Liens come out of your settlement. If your health insurance or a provider paid for treatment, they may have a right to be paid back from your recovery. An early offer doesn’t account for that. (More on how that works in my post on Colorado’s make-whole doctrine.)
• The insurer is betting you won’t sue. Insurance companies pay claims based on risk. A claimant with no lawyer, or a lawyer who never files, is low risk. That’s what the offer reflects.

Can the Insurance Company Even Make an Offer in the First 30 Days?

Usually not. Colorado law prohibits the other side from trying to settle with you in the first 30 days after the crash if you’re seeing a doctor or were hospitalized. That covers most people who were actually hurt.

Under C.R.S. § 13-21-301, if you’re injured and under the care of a healthcare provider or in the hospital, anyone whose interest is adverse to yours (like the at-fault driver’s insurance company) can’t:

• negotiate or try to negotiate a settlement with you within 30 days of the crash,
• get or try to get a general release of liability from you within 30 days, or
• get or try to get a statement from you (written, oral, or recorded) for use in settling the claim within 15 days.

If a settlement or release is signed in violation of the statute, it’s void. A statement taken in violation can’t be used against you in a lawsuit over the injury. The statute doesn’t stop police officers from taking statements as part of their normal investigation.

What Should You Do When the First Offer Is Too Low?

Don’t accept it, don’t sign a release, and don’t feel pressured by a deadline the adjuster made up. Here’s the order I’d work through.

1. Don’t Sign Anything

A release ends your claim against the driver, usually including anything that comes up later. There’s no going back to ask for more once you find out you need surgery.

2. Don’t Give a Recorded Statement Yet

Adjusters ask for recorded statements early because they’re looking for something to use later: “I’m feeling okay,” “I didn’t really see them,” “I had back pain before.” You can decline. If you have a lawyer, the adjuster talks to your lawyer.

3. Keep Treating and Follow Your Doctor’s Plan

The value of an injury claim is built on medical records. Gaps in treatment are what insurers point to when they argue you weren’t really hurt. Go to your appointments and tell your providers everything that hurts.

4. Check Your Own Policy

Your own coverage can matter as much as the other driver’s. Look for MedPay, which pays medical bills regardless of fault (what to do when MedPay runs out), and underinsured motorist (UIM) coverage, which pays when the at-fault driver’s limits aren’t enough. Many people don’t know what “full coverage” actually includes until they need it (what “full coverage” means in Colorado).

5. Know Your Deadline

For most car crash injury claims in Colorado, you generally have three years to file a lawsuit. Claims against government entities have a much shorter notice deadline. Don’t let an adjuster stall you past a deadline while “still reviewing” your claim.

6. Make the Insurer Value the Whole Claim

Once treatment is done, or the doctors can say what’s coming, the claim gets valued with all of it: medical bills, future care, lost income, and non-economic damages. That goes to the insurer in a demand. If the response is still too low, the next step is filing suit.

What Changes the Number?

What changes the number is a real willingness to file a lawsuit. Insurers move when they believe the case is going to a jury.

You can see it on my case results page. A few examples:

Several of these came to me after another firm had already worked the case and taken the insurer’s number. In the minimal-damage case, the insurer offered exactly what the medical bills came to and not a dollar more, and the prior firm never made a UIM claim. The full story of the $10,791 case is in State Farm Offered $10,791. We Filed Suit and Got $100,000.

Past results don’t guarantee or predict the outcome of any other case. Every case depends on its own facts, injuries, and coverage. Figures are total recoveries before attorney’s fees, costs, and liens.

Is a Lowball Offer Bad Faith?

It depends on whose insurance company made the offer.

• The other driver’s insurer (third-party claim): That company’s duty runs to its own policyholder, not to you. In Colorado you generally can’t sue another person’s insurer for bad faith over a low offer. Your leverage is a lawsuit against the at-fault driver.
• Your own insurer (first-party claim): If your own company is handling a MedPay or UIM claim and unreasonably delays or denies benefits you’re owed, Colorado law gives you a claim under C.R.S. §§ 10-3-1115 and 10-3-1116, including two times the covered benefit plus attorney’s fees. A low offer alone isn’t automatically bad faith, but an unreasonable one can be.

What Does It Cost to Have a Lawyer Fight the Offer?

At Venyx, the fee is 29% pre-litigation and 33% if we sue. Most firms charge 33 to 35% before a lawsuit and 40 to 45% after. I don’t charge a tech fee or an administrative fee, and you pay nothing unless we recover.

If you already have a lawyer and the case has stalled on a low offer, you can switch. You pay one fee total, because the prior lawyer’s share comes out of my fee (how switching lawyers works). Run your own numbers below.

First Offer FAQ

Should I accept the insurance company’s first offer?

Usually not. First offers are typically made before treatment is finished and before the full claim is valued. Once you sign a release, you can’t reopen the claim if your injuries turn out to be worse.

Can an insurance company offer a settlement right after a car accident in Colorado?

Not if you’re under a healthcare provider’s care or were hospitalized. C.R.S. § 13-21-301 bars the adverse party from negotiating a settlement or getting a release within 30 days of the crash, or getting a statement for settlement within 15 days. A settlement or release obtained in violation is void.

Why did the insurance company offer to pay my medical bills plus a small amount?

Because it’s cheaper than paying the full claim. A “medical bills plus $1,500” offer covers part of one category of damages and leaves out future treatment, lost wages, and non-economic damages like pain and lost quality of life.

Is a low settlement offer bad faith in Colorado?

Not against the other driver’s insurer; third-party claimants generally can’t bring a bad faith claim against someone else’s insurance company. Against your own insurer on a MedPay or UIM claim, unreasonable delay or denial can support a claim under C.R.S. §§ 10-3-1115 and 10-3-1116.

How long do I have to file a car accident lawsuit in Colorado?

For most car crash injury claims, generally three years from the crash. Claims involving government vehicles have a much shorter notice deadline. Talk to a lawyer well before any deadline.

This post is general information, not legal advice. Past results do not guarantee a similar outcome in any other case.