How Does Settlement Work in a Car Accident?

The settlement process is reasonably complex. If you understand it well, it can go quickly. But if you don’t understand it well, it can take quite a while, and you still might have your claim denied.

Insurance attorneys are highly familiar with the process. As such, they’ll be able to guide you through the process efficiently.

Filing Your Claim

Filing a claim has become quite a bit easier since the invention of the internet and smartphones.

What used to require a phone call and a lengthy conversation with an agent can now be easily completed by pulling up an app while still at the scene of the accident. You can even take a picture of your damaged car or injuries and submit them to the insurance company on the spot.

But just because the claims process has gotten easier doesn’t mean it’s gotten more efficient. When you file a claim on your own, you risk providing information to the insurance company that will harm your case.

Your attorney can help mitigate that risk by advising you about what you can safely tell the insurer and what you should keep to yourself.

The Investigation

The next step of the settlement process is one that you typically won’t have much control over—the investigation.

Usually, the insurance company will investigate the accident and try to uncover evidence that provides a basis for either denying your claim or lowering your compensation. However, your attorney can intervene in this step.

Your insurance attorney collaborates with experienced investigators who will also work to collect evidence. But unlike the insurance company, these investigators are trying to find evidence that supports your claim. Your attorney will then forward that evidence to the insurance company, forcing it to consider its decision closely.

The Decision

Once the investigation has wrapped up, the insurance company will issue a decision in your case. Depending on the evidence, it may decide to deny your claim.

Denials are typically made if the insurance company determines the policy doesn’t cover your claim, or the facts of your case don’t support compensation. Your claim might also be denied if you make procedural errors when filing it, though the insurance company will likely give you a chance to correct those mistakes.

While your attorney can’t directly affect the decision, the insurer is less likely to deny your claim if you’re represented by an attorney. Insurance companies know that skilled attorneys are prepared to go to trial (and win) if their clients’ claims are denied. More often than not, they’re not willing to take that risk.

The Initial Settlement Offer and Negotiation

If the insurance company approves your claim, it will make an initial settlement offer. Many people think this offer is set in stone and take it, regardless of whether it covers their needs after the accident. That simply isn’t the case.

Unless the settlement offer covers all of your expenses, you shouldn’t accept it. Instead, allow your attorney to make a fair counteroffer based on the expenses and losses you incurred due to the accident.

The insurance company will then have the choice to refuse the offer, accept it, or continue to negotiate. It’s far less likely that it will refuse outright knowing that you have an attorney on your side.

What Comes After Negotiation?

If the negotiation goes well, the only step left in the settlement process is receiving payment. However, if it goes poorly, you may need to file a lawsuit to get the compensation you deserve.

Lawsuits come with both advantages and disadvantages. The biggest advantage is that a successful lawsuit will often get you more money than you would have received from a negotiated settlement.

The biggest disadvantage is that it often takes at least a year to resolve a lawsuit, and it could easily take a few years if the suit is sufficiently complex or contentious. That’s a long time to wait for the money you need to pay medical bills and recoup lost wages now.

However, the insurance company also doesn’t want to face a lawsuit. Litigation is often very costly for insurance companies in terms of both legal fees and the toll it can take on their reputation. And if the company loses the suit, it will be on the hook for legal fees and whatever award the jury assigns.

Consequently, filing a lawsuit will typically be enough to bring the insurance company back to the negotiating table with a bigger offer.

The answer to this question depends on where you live. In some states, your insurance company will cover your costs regardless of who was at fault. In others, the at-fault driver’s insurer covers all costs resulting from the accident.

Assuming you’re in the latter circumstances when you get into a car accident, and the other party is clearly at fault, you’ll need to make your claim with the other party’s insurance company.

After that, the process is essentially identical. The only notable difference is that the insurance company will likely try to collect evidence that shows you were at least partially to blame, and the issue of the fault may become legally contentious.

Just because you’re at fault doesn’t mean you can be denied compensation for your claim. The process should still work as previously described, with the only major difference being that your insurance company might increase your rates after the accident.

It’s still better to pay higher rates after a car accident than to not get compensation for medical bills and other costs.

If your claim is denied, you have two options: you can appeal or file a lawsuit.

Your Morgan and Morgan attorney will suggest which option you should take based on the circumstances of your claim. If an appeal is feasible, it will usually get you compensation much quicker than if you resort to a lawsuit.

Typically, you’ll be paid by check or direct electronic transfer to your bank. You’re then responsible for paying all of your bills and expenses directly.

In some cases, the insurance company might issue the check to your attorney, who will then draw up a separate check with their payment percentage subtracted. You can negotiate alternate payment schemes if you’d like, but usually, it’s best to let your attorney assist with paying debtors than have the insurance company pay them directly.

You should always hire a lawyer as soon as possible following an accident of any kind—a car insurance attorney should probably be your first call after dialing 911.

While your attorney likely won’t be able to come to the scene of the accident, they’ll be able to help in other ways, such as providing procedural instructions and real-time legal advice.

It will behoove you to have an attorney on record before you speak to the police or contact the insurance company. Doing so will allow you to direct the insurance company to contact your attorney for future inquiries.

Attorneys from Morgan & Morgan always take car accident cases on a contingency basis. If you win the case and collect money from the insurance company, your attorney will get a percentage of that money. But if our attorney isn’t able to win you compensation, you won’t spend a dime.

This arrangement essentially means that your attorney’s services are free and ensures that they’re always working in your best interests.

Occasionally, an insurance company will throw out a reasonable figure in its initial settlement offer. If you think the offer will cover all or most of your expenses, you can consider accepting it to receive the financial aid you need more quickly. Money in your pocket usually has more value than the money you receive months or years later.

Never sign anything without consulting with your lawyer first. Insurance companies often claim you must sign away your right to sue or push for greater compensation. This is rarely true.

By signing this type of paperwork, you could get significantly less compensation than you deserve. As a rule, if the insurance company asks you to sign anything, it’s wise to refuse and speak with your insurance lawyer immediately.

Insurance companies aren’t that different from other companies. They’re large corporations that turn massive profits by spending as little money as possible. Unfortunately for accident victims, they often seek to avoid spending money by denying claims or underpaying claimants.

If you’ve been involved in a car accident, you can’t afford to be underpaid for your hardship. Contact the veteran insurance attorneys at Morgan & Morgan as soon as possible to schedule a free case evaluation and get help with your car accident settlement.