In this guide
What happens after you say no
- The offer ends. A rejection ends an offer, and so does a counteroffer: legally, a counteroffer is both a rejection and a new offer, so the original “can no longer be accepted.”
- The insurer decides what comes next. It can raise its offer, repeat it, make a lower one or stop negotiating.
- Negotiations can continue. Saying no doesn’t end your claim. Many claims settle after several rounds of offers.
- The filing deadline keeps running. Your state’s statute of limitations doesn’t pause while you negotiate.
The decision is yours — and you must be told about offers
Under ABA Model Rule 1.2(a), which most states follow in some form, a lawyer “shall abide by a client’s decision whether to settle a matter.” And the ABA’s commentary on Rule 1.4 says a lawyer who receives a settlement offer must promptly tell the client its substance, unless the client has already said what they’d accept or authorized the lawyer to accept or reject it. Your lawyer can advise you, but the choice is yours.
Why a lawsuit raises the bar
Many fee agreements charge one-third if a case settles before a lawsuit and around 40% after one is filed, and litigation adds costs such as filing fees, depositions and expert reports. Both come out before you’re paid. Using the calculator’s illustrative defaults:
| Offer today, one-third fee, $500 costs, $6,000 in liens | $30,000 |
| You keep if you accept | $13,500 |
| After a lawsuit: 40% fee, $5,500 total costs, same liens | — |
| Settlement needed just to keep the same amount | $41,667 |
|---|
In this example, a later settlement has to be about $11,667 higher than today’s offer before rejecting it pays off — and that’s before counting the extra months. Enter your own numbers above; your fee agreement and your lawyer’s cost estimate are the inputs that matter.
Formal offers can carry a cost
Once a lawsuit is filed, a defendant can make a formal “offer of judgment.” In federal court, under Rule 68 of the Federal Rules of Civil Procedure, if you don’t accept it and the judgment you finally obtain is not more favorable than the offer, you “must pay the costs incurred after the offer was made.” Many states have their own versions of this rule with different terms. If an offer arrives after your case is filed, ask your lawyer whether it’s a formal offer and what rejecting it could cost.
Before you reject an offer: five questions
- What would I take home from this offer, after the fee, costs and liens?
- What would the case need to settle for after a lawsuit just to match that?
- If I counteroffer, is this offer gone for good?
- Is this a formal offer that could shift costs to me if I reject it?
- What grows while we wait — lawsuit funding charges, interest, my own bills?
Frequently asked questions
Can I accept a settlement offer after I reject it?
Not as of right. Once you reject an offer — and a counteroffer counts as a rejection — the original offer generally can no longer be accepted. The insurer can choose to put it back on the table, but it doesn’t have to.
How many times can you reject a settlement offer?
There’s no fixed limit. Negotiations often go back and forth several times. Keep an eye on your state’s deadline for filing a lawsuit, though: negotiating doesn’t stop that clock.
Do I have to accept the first settlement offer?
No. Whether to settle is your decision. Under ABA Model Rule 1.2(a), which most states follow in some form, a lawyer must abide by a client’s decision whether to settle.
Does my lawyer have to tell me about every settlement offer?
Generally yes. The ABA’s commentary on Model Rule 1.4 says a lawyer who receives a settlement offer must promptly inform the client of its substance, unless the client has already said the offer would be acceptable or unacceptable or authorized the lawyer to accept or reject it.
Will the insurance company withdraw its offer if I reject it?
It can. After a rejection the insurer may raise its offer, stand firm, or make a lower offer later. That uncertainty is the reason to run the numbers before you say no.
Reviewed by
Morgan Hale, Editor. Writes about the financial side of injury claims — fees, liens, timelines and state rules — and checks every page against its sources before it’s published. Not a lawyer; “Morgan Hale” is a pen name. Editorial policy · How we calculate
Sources
- ABA Model Rule 1.2(a) — The client decides whether to settle (American Bar Association)
- ABA Model Rule 1.4, Comment [2] — lawyers must promptly tell clients about settlement offers (American Bar Association)
- Counteroffer (Wex legal dictionary) (Cornell Legal Information Institute)
- Federal Rule of Civil Procedure 68 — Offer of judgment (Cornell Legal Information Institute)
- ABA Model Rule 1.5 — Fees (contingent fee agreements: writing, method, expenses) (American Bar Association)
Not legal or financial advice. InjuryMath is not a law firm and does not sell or broker funding. This page gives general information based on the sources listed; your contracts and your state’s law control. For advice about your situation, talk to a licensed attorney in your state.