September 2026 by Ilya Filmus, Infinity LawGroup
QUICK ANSWER
Why is the first insurancesettlement offer usually so low?
Because the adjuster making the offer doesn’t work for you. The other driver’s insurance company owes good faith to its own policyholder, not to the person that was hit. Three things usually drive an early low number:
• The offer is priced against the documents in the file on the day the offer is made
• California requires the insurer to answer on a clock, but doesn’t require the number to be fair
• The at-fault driver may carry very little coverage, so the offer is capped by the policy
A low offer can also come later, after medical treatment is finished and billed. That usually points to the demand package or the records behind it, and there are ways to push back on it.
No One Plans on a Car Accident
You got hit a few weeks ago.You’re still going to appointments, and now there’s an offer with a number onit. The number feels off. Less than what you’ve already spent, and the adjusterwas perfectly polite about it.
You’re wondering if you’re being unreasonable. You’re probably not, and the reason has almost nothing to do with how serious your injury is.
That adjuster doesn’t work for you
An insurance company owes good faith to the person who bought the policy. The other driver bought it. You didn’t.
So, when their adjuster calls,they’re handling a claim against their own customer. Their obligations run to that customer, not to you. California law goes a step further. You generally can’t sue that insurer directly over how it handled your claim, because a 1988 California Supreme Court decision took that option away. Complaints about claim handling go to the State Department of Insurance instead.
Now, one qualifier. That insurer isn’t operating with nothing to lose, because the state still regulates how claims get handled, and refusing a reasonable settlement can cost them with their own policy holder later.
But the pressure that would normally push a number up isn’t pointed at you. That’s the real reason the first offer comes in where it does. One exception is worth knowing. If you’re claiming uninsured or underinsured motorist coverage on your own, you are the policy holder, and good faith does run to you there.
An early offer can be priced against an incomplete file
Here’s the other half of it. An early offer is priced against the file as it stands on the day it goes out, and early on, that file is usually thin. An early offer isn’t an insult and it isn’t a verdict on your case. It’s an opening number from someone whose job is to close the file.
It might have a police report,some photos, maybe an emergency room bill. Your treatment may not be finished, which means the full nature and extent of your injuries may not be known yet, to the insurer or to you.
So a low early offer often reflects timing rather than the strength of your claim. That’s not a conspiracy, and it isn’t a verdict on what your case is worth.
What it is, is a signal to reassess. A low early offer tells us to go back through the file, find what is missing, and build a negotiation strategy before anyone responds to that number.
California does give the insurer a clock. They have 15 days to acknowledge your claim and 40 days to accept or deny it once they have proof.
Read that again and notice what’s missing. Both rules are about speed. Neither one says the number they offer you has to be fair. Not sure about your offer? Call our office for a free consultation.
A low offer can come later too
Not every low offer is an early one. Sometimes the number is still low after your treatment is complete and everything has been submitted.
When that happens, it usually points to one of two things. The demand package could be stronger, more thorough and more persuasive about what actually happened to you. Or the records behind it are incomplete, and the insurer is pricing against the gaps.
Either way, a low offer at that stage isn’t the end of the conversation. The paths available usually run in this order:
• A supplemental submission, more thorough and more compelling than the first
• Escalating the file up the chain of command at the insurance company
• Aggressive negotiation on the number itself
• Consulting with an attorney to help get the best offerpossible
Which of those makes sense depends on what the file actually shows. That assessment is the work that happens before anyone answers a number.
Sometimes the problem isn’t the offer, it’s the policy
An offer can also be low because there simply isn’t more insurance behind it. This is a different problem, and it changes what you should do about it.
California’s minimum autoliability coverage is $30,000 per injured person, effective January 1, 2025.*
The minimum went up, and it’s still not much once a hospital stay is involved. If that’s your ceiling, arguing harder with the adjuster won’t move it.
Finding other coverage will. Your own underinsured motorist policy is the first place to look.
What to do with an offer this week
You don’t have to answer it the same day. This sequence keeps your options open.
1. Don’t sign anything. The document you sign couldend your claim for good.
2. Get it in writing. Ask what the number covers, medical bills, lost wages, property damage.
3. Be careful with recorded statements. They’re routine and they’re permanent. More on that in should I talk to the other driver’s insurance company.
4. Wait until you know what your treatment involves.You can’t value what hasn’t been diagnosed yet.
5. Watch the deadline. Talk to an attorney to understand filing deadlines.
6. Call an attorney. Get a free consultation to ensure that you have gotten the best offer possible.
Should you just take it?
That is a hard question to answer without knowing more information. You can call our office for a free consultation. In some situations that is a good path. We will help you make an informed decision about the next steps.
Questions people ask us
Is the first insurance settlement offer usually too low in California?
An early offer is typically an opening position rather than a full valuation, because it is priced against the file as it stands that day, before the insurer has your complete medical records and lost income. California’s Fair Claims Settlement Practices Regulations require insurers to meet response deadlines, but no rule requires a first offer to reflect the full value of a claim. Whether a specific offer is too low depends on the medical documentation, the lost income, and the insurance actually available.
What if the offer is still low after I finish treatment?
A low offer after treatment is complete usually points to the demand package or the records supporting it, rather than to timing. The package may need to be more thorough and more persuasive, or the underlying records may have gaps the insurer is pricing against. Common next steps include a supplemental submission, escalating thefile up the chain of command at the insurance company, further negotiation, and filing a lawsuit if the earlier steps do not move the number.
Can I sue the other driver’s insurance company for offering me too little?
Generally no, not directly. In Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287, the California Supreme Court held that a third party claimant has no private cause of action against the other side’s insurer under California Insurance Code section790.03(h) for unfair claims handling. Those complaints go to the California Department of Insurance. Your claim for your injuries still runs against the at-fault driver.
How long does an insurance company have to respond to my claim inCalifornia?
An insurer must acknowledge notice of a claim within 15 calendar days (Cal. Code Regs. tit. 10, section2695.5(e)) and must accept or deny the claim within 40 calendar days of receiving proof of claim (Cal. Code Regs. tit. 10, section 2695.7(b)). If more time is needed, the insurer must say so in writing and provide updates every 30 days.
What happens if I accept a settlement and my injury turns out to be worse?
Accepting a settlement almost always means signing a release that ends the claim permanently, and that release generally covers injuries discovered later from the same accident. This is the main reason to understand the full scope of your treatment before signing rather than after.
Key takeaways
The adjuster offering you money represents the other driver, and you generally can’t sue that insurer directly over how they handled your claim.
California sets deadlines for responding, at 15 and 40 days, but sets no requirement that the offer be fair.
An early offer is priced against an incomplete file, and signing a release waiving your rights makes that incomplete picture permanent.
A low offer after treatment is finished is a different problem, and it usually points to the demand package or the records behind it.
A low offer sometimes reflects a small policy rather than a weak claim, which points you toward other coverage. Speaking with an attorney can help figure this out.
Where to go from here
An early offer isn’t an insult and it isn’t a verdict on your case. It’s an opening number from someone whose job is to close the file.
What you stand to lose by signing early is the gap between two numbers, and the part of your injury nobody has found yet. Signing a release waiving your rights closes the door on both.
Send us the offer and whatever records you have, and we’ll give you a straight read on where things stand. You can reach us here Schedule a Call Today
This post is part of a fuller look at car accident and personal injury claims in San Francisco and the Bay Area.
Sources: *California Vehicle Code section 16056, as amended by Senate Bill 1107, reported by the California Department of Insurance. The full minimum is30/60/15, and it sat at 15/30/5 from 1967 until this change. Cal. Code Regs.tit. 10, sections 2695.5, 2695.7 (insurer response deadlines). Cal. Code Civ.Proc. section 335.1 (two-year deadline). Cal. Gov. Code section 911.2(six-month government claim deadline). Moradi-Shalal v. Fireman’s Fund Ins.Cos. (1988) 46 Cal.3d 287.
