Understanding Open-Ended Settlement Offers: What They Are and How They Work

By Eugene Bruno on December 20, 2025

If you’ve been injured by a negligent driver, you may assume that any settlement offer from the other driver’s insurance company is a welcome step toward resolving your claim. But, be careful, because not all settlement offers are created equal.

Lately, the San Diego personal injury lawyers at Eugene Bruno & Associates have been seeing what’s known as an open-ended settlement offer more often. This arrangement is popular with insurance companies because it protects them, but it could leave you stuck with unpaid medical bills.

What Is an Open-Ended Settlement Offer?

If you’ve been injured in a car accident, you may encounter an open-ended settlement offer from the insurance company. These offers can seem generous at first, but it’s important to understand exactly what they mean—and how they can affect the final amount you receive.

An open-ended offer usually sounds like this: “We’re willing to cover up to $10,000 in medical bills and $2,500 for pain and suffering.”

At first glance, that may sound reasonable, but here’s how it really works:

• Caps your coverage: If your medical bills exceed $10,000, the insurance company will only pay up to that limit.
• No leftover payout: If your bills are less than $10,000, you won’t receive the difference. The offer is not a flexible pool of money—it’s a maximum limit for each category.
• Negotiating your bills down: Insurance companies often take that $10,000 figure for medical bills and try to negotiate discounts directly with providers. While this may reduce their payout, the savings usually stay with the insurer rather than being passed on to you.

In short, an open-ended offer may sound like a set amount, but it can leave you with less money than expected if your bills are higher, or it could prevent you from accessing the full amount if your bills are lower. Understanding this is key before responding.

Why Insurance Companies Use Open-Ended Offers

Open-ended settlement offers are designed to keep negotiations in the insurer’s favor. They:

• Test how much you think your claim is worth.
• Leave you responsible for proving your expenses and damages.
• Give the insurer leverage to minimize their payout while appearing flexible.

Without the right strategy, you may unintentionally accept less than you deserve—either because your bills exceed the stated limits, or because the insurer keeps any negotiated discounts for themselves.

How to Respond to an Open-Ended Settlement Offer

1. Consult an Attorney First
   Before responding to any open-ended offer, speak with an experienced personal injury lawyer. They can review the offer, explain what it means for your medical bills, pain and suffering, and other damages, and help you decide whether it’s fair.
2. Gather Your Documentation
   Collect all medical records, bills, repair estimates, and any other evidence of your losses. Your lawyer can help organize this information to present a strong case.
3. Don’t Rush to Respond
   Open-ended offers are not final settlements, they are the start of negotiations. A lawyer can guide you on the right timing and strategy so you don’t accidentally accept less than you deserve.
4. Let Your Lawyer Handle the Negotiation
   Attempting to negotiate on your own can be risky. Insurance companies are experienced negotiators who may use your counteroffer against you. Your attorney can advocate on your behalf, make sure all your damages are accounted for, and maximize the amount you receive.

Speak With an Experienced San Diego Personal Injury Attorney Today

Open-ended settlement offers can be confusing and potentially costly if handled incorrectly, our experienced car accident attorneys at Bruno & Associates can guide you. We help clients evaluate offers, negotiate effectively, and make sure they receive the compensation they deserve.

To learn more, contact us today at 1-888-BRUNO-88 (1-888-278-6688) for a free consultation.