Individuals injured in car accidents can seek compensation for the expenses and effects of their injuries through their state’s car accident claims process. If the insurance provider fails to offer a fair settlement before the claim goes to trial, the claims process allows victims to use the state’s civil court system. However, most car accident claims settle before they reach the courtroom to avoid the expense and uncertainty of litigation.
Each car accident case is different. The details and various factors of your accident can significantly impact the outcome of your case. Hiring a car accident lawyer to represent you allows the time necessary to focus on your recovery.
How the Settlement Process Begins
According to the Centers for Disease Control and Prevention, unintentional injuries—such as those resulting from car accidents—are the fourth leading cause of death in the U.S., behind only heart disease, cancer, and COVID-19. Most traffic accidents result from negligence (reckless or careless behavior) from one or more roadway users. The negligent individual is generally liable for injuries caused in accidents, with compensation through their auto liability policy.
The claims process generally begins when the claimant’s attorney establishes a value to the claim and sends a demand for the claim’s total value to the at-fault party’s insurance provider, along with details of the accident that caused the injury and documentation of expenses.
The insurance provider has three options when receiving a third-party insurance claim (a claim made on a policy of their insured by someone other than the insured).
- They can accept their insured’s liability and pay the claim as demanded.
- They can deny the claim and provide the claimant and their attorney notification and a reason for the denial.
- They can offer to settle the claim out-of-court for less than its full value.
What an Attorney Can Do During the Settlement Process
Up to 96 percent of all claims in the U.S. resolve through a settlement, not litigation.
If the at-fault party’s insurance provider makes a settlement offer, your car accident attorney can take the following actions:
- Confer with you about the offer, advising you whether the offer fairly compensates your injuries.
- If you wish to accept the offer, your attorney can relay that information to the insurance provider, who will then ask you to sign a settlement agreement.
- If you do not want to accept the offered settlement, your attorney can negotiate with the insurance provider to get them to increase their offer.
Some of the things an attorney cannot do during the settlement process include:
- Pressuring their client into accepting a settlement offer.
- Accepting settlement offers for their client. The claimant is the only one who can decide whether to accept an offer.
- What Often Happens to Claimants who Don’t Have an Attorney
Attorneys bring some essential qualities to the table regarding settlement negotiations: experience and understanding of the law.
They also know the common tactics that insurance companies use to avoid paying out large amounts on claims, such as:
- Making low settlement offers early after the accident when the victim is less likely to have an attorney or understand their claim’s value. This type of settlement offer is often made with the statement that it is the “maximum” amount of compensation available, though it usually isn’t. Many individuals who do not have an attorney and receive a settlement offer before they know the value of their claim will accept the offer and later realize it wasn’t enough to cover the expenses and effects of their injury.
- Convincing the victim to offer a recorded statement and then asking redundant or misleading questions to use the statement against the claimant to reduce the claim.
- Convincing the claimant to release their entire medical history for the insurance adjuster to evaluate the claim. There are only limited reasons why an insurance adjuster needs to see medical records, and they never need to see the claimant’s entire medical history. This tactic often yields records that they use to portray the pain the victim feels as stemming from a pre-existing condition rather than an injury caused in an accident with the insured.
Filing the Claim in Court
If the at-fault party’s insurance provider fails to pay the claim’s value or gets the claimant to agree to a settlement offer, the victim can file their claim in court. However, the settlement process does not necessarily end when you file suit. Filing a lawsuit is the catalyst that makes the insurance provider increase their settlement offer. This increase is because litigation is expensive and allows the insurance provider little control over the outcome.
Once a Settlement Offer Has Been Made
A settlement offer can be made anytime during the claims process, even after the trial begins, but before the court renders a decision.
Settlement negotiations may discuss:
- Whether the at-fault party’s insurance policy covers accidents like the one that caused your injury.
- The at-fault party for the accident. In many cases, there is more than one source of liability.
- The extent of the injuries suffered. Claims involving permanent injuries are generally valued higher, particularly if the injuries result in the victim’s inability to earn in the same capacity as before the accident.
- The necessity of the type and duration of treatment the victim receives for their injury.
Evaluating the Offer
The insurance provider’s claims adjuster offers a settlement after evaluating the claim. An insurance adjuster’s evaluation often includes interviewing the insured to get their side of the story, investigating the cause of the accident, interviewing the claimant, and documenting expenses, such as medical bills or estimates on the claimant’s vehicle repair costs.
This evaluation determines:
- How likely the claimant will prevail in court, should they file a claim.
- How much a judge or jury would likely award the claim in court.
Generally, an initial offer from a claims adjuster will be less than half of the claim’s value. When evaluating the offer, the claimant must understand that the case’s value is not based solely on the medical expenses and car repairs they incurred due to the injury.
Instead, claim values depend on:
- How much insurance coverage the at-fault party has.
- The severity of the injury and its effect on the sufferer’s ability to work, including the lost wages they incurred from being too injured to work and the likely future impacts on their earning capacity.
- The effects the injury has on the claimant’s quality of life. For example, if they suffered an injury resulting in chronic pain or frequent and intense medical treatments, the claimant can seek compensation for pain and suffering. If the injury took away the ability to participate in hobbies you found important, you can seek compensation for the lost enjoyment of life.
Back to the Negotiating Table
A fair settlement offer in a car accident case should, at minimum, compensate the claimant for:
- Wage loss
- Loss of future earning capacity
- Property damage
- Medical expenses
- Pain and suffering
If the settlement offer fails to compensate for the above financial and psychological costs, a claimant will generally have their attorney continue negotiating with the claims adjuster. This process can involve gathering additional documentation and evidence to prove liability and expenses.
Accepting the Offer
Once the claims adjuster makes a settlement offer that fairly compensates the injury, the claimant—through their attorney—verbally accepts the offer. The attorneys will draft an official settlement agreement, and you will sign the paperwork. If the attorneys filed a lawsuit, they will notify the court, which will dismiss the case. The settlement agreement will include a provision that releases the at-fault party and their insurance provider from further legal action.
Receiving Your Compensation
After the parties sign the settlement agreement, the insurance company will process the compensatory award for payment. Within about six weeks, the claimant’s attorney will receive a check in both the claimant’s and the attorney’s name.
The attorney will deposit the check into their legal trust account and negotiate any past-due accounts that the claimant has due to their injury, including healthcare providers, government insurance programs, and group health insurance providers who placed a lien on the settlement.
A medical lien is a contract between the provider of the service and the claimant stating that the proceeds of a settlement will cover the service costs.
The claimant’s attorney will also withdraw from the compensation the cost of their services. Most car accident attorneys work on a contingent fee basis, meaning they do not get paid until there is a successful outcome to your claim. Instead, the claimant will contract with their attorney when they begin working on the claim. The contingency agreement will outline the lawyer’s services and their percentage of the settlement or court award.
Once the lawyer satisfies all liens and deducts their payment, the claimant will meet with their attorney to finalize the case. The attorney will give the claimant a packet including the settlement agreement, a breakdown of services provided, and the remainder of the compensation for the claim.
How Long It Takes
Nobody can predict how long your case will take to settle.
Some issues that can delay the settlement process include:
Difficulty obtaining reports from healthcare providers treating the claimant that are necessary to prove the severity of the claimant’s injury or the expense of their treatment.
- The length of time it takes a claimant to reach maximum medical improvement: when the injury stabilizes, and the sufferer’s healthcare providers no longer believe that the sufferer will see any additional improvement to the condition, even with continued treatment. Attorneys often wait to establish a value to a claim until the claimant reaches maximum medical improvement to be reasonably sure of the claimant’s future expenses and effects.
- A high valued claim. The higher the value of the claim, the harder the insurance company will work to reduce it. The insurance company may request that the claimant submit to an exam by a healthcare provider of their choice to determine if the injury is as severe as claimed.
- Disagreements on the settlement agreement terms, even though both sides agreed to a settlement amount. Settlement agreements often include provisions such as the inability to disclose the amount of the claim publicly or admission of guilt by the at-fault party. A settlement agreement finalizes when these issues resolve.
While it is possible to obtain a settlement offer very quickly after an injury occurs, obtaining one that fairly compensates you usually takes time and patience.
If an accident injures you, our experienced car accident lawyers can explain the claims process and help you get back on your feet. For a free case evaluation, contact a car accident lawyer near you today.