Car accidents are inherently stressful, and the claims process can often feel lengthy and overwhelming. Protecting your rights throughout that process can be challenging, particularly if you feel pressure from an insurance company to resolve your claim quickly. Auto insurance providers are generally motivated and eager to settle claims efficiently and for the lowest reasonable amount, but that doesn’t mean that you’re required to accept an offer before you’re ready. 

Can an insurance company force you to settle or end your claim? In short, no. Whether private or government-backed, an insurer cannot force or compel you to settle your motor vehicle accident claim. Understanding your rights will help better protect you against these sort of unethical practices. 

What Are Common Pressure Tactics That Insurance Companies Use?

If you feel pressured to resolve your claim before you are ready, it’s important for you to understand that you still have the right to reject all offers and continue pursuing compensation. To pressure you into settling your claim, you may run into insurers with behaviours such as:

  • Pushing for a quicker settlement. Insurers are incentivized to have you settle your claim quickly, before the full extent of your injuries and the long-term impacts to your life are known.
  • Suggest an offer is “final”.
  • Minimize your claim. By minimizing the seriousness of your injuries or your losses, an insurer may try to make you believe that your losses are less than they actually are.
  • Delay claims to encourage offer acceptance.
  • Request broad and extensive medical examination.

By creating this “appointment fatigue,” insurers can add undue pressure to settle your claim to get away from the medical examinations. As well, this adds unnecessary fees to juggle during the recovery process. 

What are My Rights as a Claimant?

Understanding your rights can help better protect you against undue pressures from insurers and broker agents. If you are making a claim, remember you have the right to:

  • Refuse a settlement offer;
  • Continue negotiations;
  • Seek legal advice before signing any final forms or releases;
  • Start a lawsuit or continue one within the limitation period for the event;
  • Request clarification or further information on the insurer’s position for an offer.

What Other Leverage Does the Insurance Company Have?

While insurers aren’t legally able to force you to settle your claim, they aren’t without leverage during the process. Some things that the insurance company can do to help persuade or encourage a settlement agreement may include:

  • Provide settlement offers lower than what you believe the claim value to be;
  • Deny, dispute, or discredit parts of your claim;
  • Delay negotiations while collecting evidence that may go against your claim;
  • Defend a lawsuit if you choose to pursue legal action for your claim. 

How Do Settlements Work?

For a claim to reach a settlement, a voluntary agreement needs to be made between each party. In cases of motor vehicle accidents, this typically looks like a voluntary agreement between you and the insurer providing financially for the damages of your claim. A voluntary agreement means that: 

  • You have the right to accept or reject any offer on your terms;
  • You are not required to settle if the amount offered is too low;
  • Once a settlement is agreed upon and accepted, it is final and legally binding.

If You Don’t Agree, You Don’t Settle!

During negotiations, if conversations have broken down and have come to an unfavourable place where you aren’t confident or comfortable settling your claim, there are some options available to you. If negotiations are unsuccessful, you can continue negotiations and try to reach a higher settlement value. It is within your right to start or continue a lawsuit against the at-fault party until a settlement is reached. 

If you are unable to reach a settlement through the negotiation process, the value of your claim may ultimately be decided by a court. In that case, the matter proceeds to litigation for a final determination. While this can result in a higher financial award than what was offered in settlement conversations, there is also the risk that the court may award less. 

Other Things to Keep in Mind

Ultimately, you are in control of whether or not you settle your claim. An insurer can negotiate, but they can’t force you to accept an offer, that decision is yours and yours alone. To help prepare and protect your rights, there are a few important considerations to keep in mind regarding your car accident claim:

Deadlines (limitation periods)

Depending on the province where the accident occurred, there is a set limitation period in which you must start your lawsuit. If you don’t start your claim prior to this limitation period closing, you risk losing your right to make a claim. 

Limitation periods are set to start the day the accident occurred, was “discovered,” or the first day in which you should have reasonably been able to report the incident depending on the facts of the case in question. 

Although in certain circumstances the limitation period can be much shorter, generally speaking the limitation period lasts for 2 years in Nova Scotia, New Brunswick, Newfoundland & Labrador and PEI.

Pressure tactics from insurers

Some insurers choose to follow less ethical practices, and may choose to encourage you to settle your claim quickly. Often the goal of the insurer is to settle the claim before the full extent of injuries becomes known, especially serious and chronic injuries like a traumatic brain injury or whiplash. 

Once you have settled your claim, it is legally binding and final. This means that if you are unhappy with the outcome, or if new evidence or injuries comes to light, you will not have the opportunity to bring the claim back again. 

Seeking legal advice to help your claim

Many people find success in consulting legal advice before accepting a settlement offer. An experienced legal team can advocate for your best interests, and may be largely impactful in claims with serious injuries. 

Should I Settle?

Unfortunately, there’s no magic 8 ball ready to tell us when the right time to settle a lawsuit is. There are a multitude of factors that you need to consider before you settle your car accident claim, and rushing to do so isn’t in your best interest. Though there isn’t a one-size-fits-all, there are factors that will typically weigh most heavily in discussions of when to settle. Some situations where settling your claim during the negotiation process might make sense may include:

  • Liability is clear; 
  • The settlement offer is reasonable considering the damages;
  • You want a guaranteed outcome;
  • Your injuries are minor with clear prognosis and low to no long-term impact;

Alternatively, there are some claims that it makes more sense to proceed with a lawsuit, instead of settling. Some situations that might suggest you would find greater benefit by proceeding to a lawsuit include:

  • Liability is unclear or contested;
  • The settlement offer is significantly lower than your actual losses, or the projected value of your claim;
  • Your injuries are chronic, or have uncertain recovery timelines and prognosis;

Significant factors like the at-fault motorist having minimal or no insurance, and needing to access the underinsured or uninsured motorist coverage policies, would also support proceeding with a lawsuit. 

Potential Benefits of Settling Your Car Accident Claim

Knowing when to settle your car accident claim can seem like a daunting task, but remember that there are legal professionals available who can help guide you through the process. Some of the benefits of settling your claim might include:

  • Certainty: a settlement is a guaranteed outcome;
  • Timely: a settlement offer can be reached in as little as a few months;
  • Lower Fees: typically reaching a settlement offer requires lower administrative and transactional costs;
  • Less stress.

Potential Risks of Settling Your Car Accident Claim

Alternatively, there are some key trade-offs you should consider if you do choose to pursue a lawsuit for your claim. A lawsuit can include discoveries and going to trial, but is also likely to include visits to various experts and medical examinations. Some of these considerations may include:

  • Risky: going to trial can mean higher, or lower damages awarded;
  • Lengthy: the litigation process is traditionally a long process, and can take years to reach completion;
  • Costly: litigation means legal fees, expert evidence, and other costly additions;
  • More involved, more stress.

The Bottom Line

There are some situations where settling your claim is appropriate, the compensation is fair and the risks are low. Taking your claim through to litigation may be appropriate for your case if there is a meaningful dispute, low-ball offers, or long-term and complex injuries. More often than not your claim may include both, and initiating a lawsuit may strengthen your negotiating position, and help bring conversations to an agreeable resolution. Ultimately, if and when you choose to settle your car accident claim is up to you.