Detailed Answer
If an insurance company’s settlement offer after an accident looks unreasonably low, you have several steps available under Missouri law to challenge it. Below is a clear, step-by-step explanation of the common paths people use, what to expect, and the legal tools that may apply in Missouri.
1. Start by understanding your coverage and damages
Read your policy carefully. Identify the type of coverage (liability, first-party personal injury protection (PIP), uninsured/underinsured motorist, collision, etc.), the policy limits, any deductibles, and any contract-specified dispute processes (for example, appraisal or arbitration clauses).
2. Document everything and build a demand package
Collect medical records, itemized medical bills, repair estimates, photos of damage and injuries, wage-loss documentation, and a clear timeline of the accident and treatment. Prepare a written demand that summarizes liability, itemizes economic losses, and estimates non‑economic losses (pain and suffering). A complete demand letter gives you more leverage in negotiations.
3. Make a reasoned counteroffer and communicate clearly
Respond in writing to the insurer’s offer. Explain why the offer is inadequate and attach supporting documents. Set a reasonable deadline for a response. Keep communications professional, focused, and factual. Avoid giving recorded statements without knowing the insurer’s tactics.
4. Use the insurer’s internal appeal and complaint channels
Ask to speak to a claims supervisor or the insurer’s internal appeal/claim review unit. If you don’t get a satisfactory response, you can file a consumer complaint with the Missouri Department of Commerce & Insurance (DCI). The DCI can review whether the insurer followed Missouri insurance regulations and can facilitate investigation: Missouri DCI – Consumer Help.
5. Check for contract-based dispute procedures (appraisal or arbitration)
Some insurance policies include an appraisal clause for property or vehicle damage that lets each side pick an appraiser to resolve the amount of loss. Other policies require arbitration for certain disputes. If your policy contains such a clause, follow the contractual process carefully. These processes can be binding and can be faster than court.
6. Try alternative dispute resolution (mediation)
Mediation is a voluntary process where a neutral third party helps you and the insurer negotiate. Courts and many local bar associations offer mediation services. Mediation often succeeds where direct negotiation fails because a mediator can point out legal risks and likely trial outcomes to both sides.
7. Prepare to file a lawsuit if negotiations fail
If the insurer refuses a fair offer, the next step may be to file a civil lawsuit. Filing begins the formal litigation process: discovery (document exchange, depositions), expert reports, motions, settlement conferences, and possibly trial. Make sure you file before Missouri’s statute of limitations runs out—missing the deadline can bar your case. See Missouri statutes on civil limitations: Mo. Rev. Stat. Chapter 516 (Limitations).
8. Consider a bad-faith or “vexatious refusal” claim
Missouri law allows remedies when an insurer unreasonably refuses to pay a valid claim. Under the insurance statutes, if a court finds the insurer acted vexatiously or without reasonable cause in refusing payment, the insured may be entitled to attorney fees, court costs, and other relief. See Missouri insurance law: Mo. Rev. Stat. Chapter 375 (Insurance Regulation) and the specific provision addressing vexatious refusal: Mo. Rev. Stat. § 375.420. Pursuing a vexatious-refusal claim usually requires stronger proof than a simple low offer—it is typically reserved for insurers that unreasonably withhold payment or act in bad faith.
9. Know the practical tradeoffs
Lawsuits cost time and money. Before filing suit, weigh the insurer’s offer against your expected recovery at trial, the cost of litigation (attorney fees, experts, court costs), and the time to resolution. Many injury attorneys offer free consultations and work on contingency—the attorney gets paid only if you recover—so consult an attorney to evaluate the realistic outcome and expenses.
10. After judgment: collection and post-judgment remedies
If you win a judgment, the insurer must pay under the court order. If the insurer still refuses payment, post-judgment collection remedies are available through the court. In some instances, prevailing plaintiffs may recover costs and attorney fees if allowed by statute or contract.
Key Missouri resources:
- Missouri insurance laws and code: Mo. Rev. Stat. Chapter 375
- Vexatious refusal statute: Mo. Rev. Stat. § 375.420
- Missouri statutes of limitations (civil actions): Mo. Rev. Stat. Chapter 516
- Missouri Department of Commerce & Insurance – consumer help: insurance.mo.gov/consumers
Helpful Hints
- Document everything: keep medical records, invoices, receipts, photos, repair estimates, and a log of calls and emails with the insurer.
- Get timely medical care and keep copies of all treatment notes and bills; delayed treatment can hurt your claim.
- Do not sign a full release or accept a settlement check until you fully understand the release’s scope; releases typically end your ability to seek more money later.
- Ask for the insurer’s policy limits in writing if the at‑fault party’s coverage is limited; multiple avenues (UM/UIM, liability) might exist.
- Consider hiring an attorney early if injuries are serious, fault is disputed, or damages are high. Attorneys can handle negotiation, preserve evidence, and advise on bad-faith options.
- Use mediation before filing suit—mediators can produce reasonable settlements without the time and cost of litigation.
- Be mindful of deadlines: follow contract notice requirements and state statutes of limitations in Chapter 516 of the Missouri Revised Statutes.
- Filing a complaint with the Missouri Department of Commerce & Insurance may prompt additional review but does not replace filing a lawsuit when legal relief is needed.
- If you are considering a claim for vexatious refusal or bad faith under Mo. Rev. Stat. § 375.420, collect strong evidence showing the insurer’s unreasonable conduct—mere low offers alone may not suffice.
Next steps: Put together a demand packet, consider a consult with a Missouri personal-injury attorney to evaluate the strength of your claim and whether to pursue mediation, appraisal, or litigation, and track all deadlines carefully.
Disclaimer: This article provides general information about Missouri law and common legal steps after an insurance company makes a low settlement offer. It is not legal advice and does not form an attorney‑client relationship. For legal advice specific to your situation, consult a licensed Missouri attorney.