When someone else’s negligence injures you, you have two years in California to file suit for your injuries and three for property damage.

But these are not the only deadlines in the claims process. Various time limits, both statutory and contractual, govern the actions of both parties, including when you, as an injured victim, must accept or reject a settlement offer.

Basics of the Claims Process in California

Settling with an insurance company begins with filing a claim. Once the insurance company receives the notice of the claim, it must contact you within 15 days of acknowledging its receipt.

During this initial contact, the adjuster will likely ask you for a statement regarding your injuries. You are not obligated to respond to the adjuster and can decline to answer any questions.

If you do end up making a statement, keep it simple and stick with the facts. Do not say anything that the adjuster could use against you or that could decrease your claim. The adjuster will look for any evidence that speaks to fault and hopes you will give it to him.

Settlement Offer and Negotiations

Once the insurance company has acknowledged that it has received your claim, the law gives it 40 days to decide whether to pay, reduce, or reject the claim. During this time, both sides will review and discuss the evidence for the case.

When the evidence clearly shows that a person was negligent, the negotiations may proceed much more quickly. However, complex claims, especially those involving more than one party, take longer.

Also contributing to extended negotiations are the dollar amounts of the damages, which are the losses you suffer due to your injury. You must present evidence to back up every dollar you are claiming in damages.

Insurance companies are in the business of disputing dollar amounts to save money. They even deny claims regularly. However, a claims denial is not always the end of the story when you have an experienced personal injury lawyer representing you.

Once both sides reach a fair number, you, as the claimant, will decide whether to accept the figure or not. If you reject the offer, negotiations may continue, or you may have to go to trial. When this happens, you can expect the entire compensation process to take much longer.

How Long Do You Have to Accept a Settlement Offer?

In California, insurance companies frequently make settlement offers under statute 998 of the California Code of Civil Procedure. This statute requires injured parties seeking compensation to accept or reject the offer within 30 days of its transmittal or before the commencement of a trial or arbitration proceedings.

The insurance company can revoke the offer until you accept it. This revocation may occur for many reasons, including new, material information about the incident.

The offer will be considered withdrawn if the 998 is not accepted within 30 days or before a trial or arbitration proceedings. Additionally, evidence of the offer itself cannot be used later during the trial as evidence of responsibility or to calculate damages.

Understanding 998 Offers and Settlements

A 998 offer is California’s version of pre-trial settlements. The court highly favors pre-trial settlements because they conserve judicial resources and time. Additionally, they get cash into the hands of injury victims much more quickly than a trial would.

Although settlement awards are often lower than those given by juries, the time requirements for trial and the high need for financial resources make settlement the preferred option.

On top of that, the provisions of statute 998 contain a disincentive for trial.

Shifting Costs

A 998 offer is more than just an offer for settlement. Both sides must realistically evaluate their chances of success at trial, and it penalizes the party that rejects the offer if they do not get a more favorable court judgment.

The penalty is financial and consists of making that party pay for many of the various costs typically associated with a trial, including certain:

  • Court fees and costs
  • Costs to hire experts
  • Transportation expenses
  • Jury fees
  • Costs for investigations

For example, suppose that you are in a car accident that was no fault of your own, and you suffered an injury. In that case, you have your personal injury attorney spearhead the negotiations on your behalf. One day, a 998 offer from the insurance company for $15,000 comes in, and you decide to reject the payout.

If you receive an award of $20,000 at trial, you will not face penalties because you received a better judgment at trial than what the defense was offering.

However, assume you receive an award of $13,000. Since you did not receive a better judgment at trial, you will have to face a few penalties, including:

  • The payment of the defendant’s legal costs accrued by the defendant post offer
  • Loss of ability to claim your post-offer legal costs
  • The payment of the defendant’s expert witness fees (not mandatory)

The penalties work both ways. The defendant must pay if the defendant rejects your 998 offer for $18,000 and the jury awards you $20,000.

When to Accept or Reject a Settlement Offer

Before you accept or reject any settlement offer, there are important things you should understand. First, it is essential to realize that once you accept a settlement offer, you give up your right to sue for the current damages you have incurred.

If you later realize that the settlement amount is insufficient to cover your losses, you will be unable to demand more compensation.

This situation does not bar you from ever suing the defendant or other related parties for other causes of action. It only prohibits you from relitigating the current issue and seeking more compensation.

Second, you should never accept or reject any offer without knowing your case’s approximate value. If the insurance company transmits a settlement offer, how do you know whether it is a good or reasonable offer?

By consulting with a personal injury lawyer before dealing with the insurance company, you will get a better idea of the value of your personal injury claim and the reasonableness of the insurance company’s settlement offer.

What Happens After You Accept the Offer?

What happens after accepting a settlement offer depends on where you are in the claims process. If you are still negotiating and have not yet filed a lawsuit, the insurance company will have you sign a release or settlement agreement.

This paperwork typically states that you accept the terms of the settlement. It also releases the defendant from further liability on the particular claim.

If negotiations have broken down and a lawsuit has already been filed, you will also have to file a Request for Dismissal to end the legal action. In the case of multiple defendants, you may also be required to file a Motion for Good Faith Settlement if you are not settling with all the defendants in your suit.

Details Regarding Compensation Payout

Once you finalize the documents, the insurance company will cut you a check for the settlement amount. It could be weeks before you receive the check if the claim was simple. In more complex cases, it could take months.

If you have a personal injury attorney handling your case, the insurance company will mail them the check. Your attorney will then place the check in a type of trust account until the case reaches its final resolution.

Then your lawyer will settle any debts or liens associated with the case, including:

  • Medical care treatment expenses
  • Court costs
  • Attorney’s expenses and fees

Once your personal injury attorney takes care of all your financial obligations, they will forward the remaining proceeds to you along with an itemized rundown of all the expenses they paid.

Before all of this, however, you will have decided how you want your compensation paid out. The two types of payments injury victims may choose from are a lump-sum payout and a structured settlement.


Choosing the lump-sum option gives you complete control over the entire compensation package. It is an excellent option for those who know how to handle and invest large sums of money without oversight. The danger lies in burning through the lump-sum payout too quickly.

Structured Settlement

A structured settlement pays your compensation over a long time. The payments can come in many ways and amounts. If you are looking for guaranteed income for years to come, a structured settlement is preferable to a lump-sum payout.

You may also choose to start a structured settlement with a lump-sum payout, which may help you deal with any significant financial issues you have. Periodic lump-sums are also an option that works well to offset inflation over time.

How A Personal Injury Lawyer Can Help

A personal injury lawyer is your advocate during the claims process. Every effort they make is to safeguard your interests and seek the highest compensation they can get for you.

While the insurance company and its adjusters seek to limit their payouts or deny claims, a personal injury attorney will fight to get your claim honored and paid out with a decent sum.

Advise You on the Value of Your Claim

It makes sense to reject an offer for settlement if it is far below the value of your claim. But how do you know what your claim is worth? The majority of injury victims are not experts in personal injury damages. Although many losses do have price tags, other compensable losses do not. How do they figure in your claim for compensation?

The answer is to retain a personal injury attorney with a proven track record of successfully recovering compensation for their clients. Although it is difficult to give an exact number, an attorney with experience will likely know the ballpark in which your claim falls and, consequently, the validity of any offer you get.

Draft the Demand Letter

A demand letter drafted by a seasoned professional who understands the language and tone of claims negotiations will request compensation for damages caused by a negligent actor.

Keep Your Claim Viable

As mentioned, the claims process involves many deadlines and other timing requirements. As an injury victim, you do not need to worry about missing deadlines when you have retained the services of a personal injury lawyer. They will fulfill all of the timing and other legal requirements while you take the time you need to heal.

Negotiate With Insurance Companies

Insurance adjusters field claims every day. They are trained, experienced, and well-versed in the procedures and strategies used in personal injury claims cases. When you go through the process alone, you face these professionals who know how to make quick, subpar settlement offers look attractive.

A personal injury attorney also knows how to negotiate settlements effectively for their clients. No one can guarantee high-dollar payouts, but injured individuals who have a fierce negotiator on their side typically receive more compensation than those who go through the process alone.

Speak to a Personal Injury Lawyer Today

Never go through the claims process alone if you want the highest payout possible. Schedule a consultation with a personal injury lawyer and get the qualified help you need to fight for the compensation you deserve.

Remember that insurance companies do not have your best interests at heart, even when offering compensation. By retaining the services of an experienced personal injury attorney, you have someone who truly cares about you fighting for your rights and best interests. Contact The May Firm for a free consultation today.