Car Accident Settlement Process

The car accident settlement process begins when your car accident happens and it ends when you receive a check compensating you for your injuries and other damages.

Gathering Information

If you're physically able, you start at the scene of your accident to gather information that you'll need to document your claim. Click here to learn the 8 things you should do at the scene of your accident and use this accident investigation form to collect information at the scene.

Click here to review the 8 things you should do AFTER your accident. Mainly, you do 2 things after your accident . . . recover from your injuries and gather information. It helps to keep a diary. To make things easy, use this diary form.

Presenting Your Claim to the Insurance Company

When do you present your claim?

While you start gathering information right away, you don’t present it to the insurance company and try to settle your claim until . . .

. . . you completely recover from your injuries.

Maybe you won’t recover completely from your injuries. Perhaps your injuries will be permanent. In that case, you wait until your medical condition becomes stable. This is sometimes referred to as “maximum medical improvement,” and it is, basically, a medical opinion. Your treating doctor will tell you when you reach “MMI.”

Of course, if your body disagrees with your doctor . . . if you continue to have significant symptoms after your doctor says that you are at MMI . . . you should return to your doctor for further treatment or seek a second medical opinion before you make your injury claim.

Why do you wait to present your claim until you recover or reach MMI?

Because, when you settle your claim, you make a trade. The insurance company, on behalf of the driver who caused your accident, pays you money to compensate you for your various harms and losses, including medical bills, lost income and pain and suffering. In return, you sign a release giving up your right to make any more claims arising out of this accident.

Obviously, you don’t give up your right to make more claims until you know the full story of your injuries . . . until you recover from your injuries or reach MMI.

Are there any deadlines?

You bet!

Each state has a “statute of limitations” which establishes a period within which your car accident claim must be either settled or filed in court.

If you cannot settle your claim and you file a case in court as little as 1 day too late, your case is DOA! It will be dismissed and you cannot re-file it. There are no excuses and very few exceptions.

The primary exceptions concern claims by minors and claims by mentally disabled persons. They may be given more time to file their claims. But remember, statute of limitations law can be very tricky stuff and not for the normal do-it-yourselfer.

Statutes of limitations vary depending on the type of case you are filing. For a car accident claim, they vary from state to state from as little as 1 year up to as many as 6 years. There may even be different statutes of limitations for some of the claims that arise out of car accidents, such as wrongful death claims.

Soon after your car accident, especially if your injuries are severe and it will take quite a while for you to recover, you must learn the statute of limitations in your state. Research your state’s law or, better, consult with a lawyer who specializes in car accident claims.

Once you know the statute of limitations, note it on your calendar, circle it in red and put stars around it! In addition, I recommend that you also put on your calendar a reminder 6 months before the statute of limitations will run.

That is the latest you should decide whether to hire a lawyer.

Don’t wait until the last month before the statute of limitations is up to walk into a lawyer’s office and try to hire her. Nothing scares a lawyer more than a statute of limitations that is about to run. Rules concerning filing court cases, naming all of the right defendants and serving court papers on them can be quite technical and unforgiving and even one minor screw-up can be malpractice.

Smart lawyers (and would you want to hire any other kind?) probably won’t take your case at the last minute. If they do, they may want to charge a higher than normal fee. Either way, you lose.

Here’s one more time limit trap to beware.

Before you can make a claim against a government – a city, county, state government, the federal government – you must comply with special requirements including such things as giving early notice of your claim (within 30 to 180 days) and giving notice and presenting your claim in very specific and precise ways.

If you have a claim against a government . . . let’s say, for example, your car was rammed by a government vehicle or you claim that a government caused your accident by failing to properly design or maintain a roadway . . . I urge you to consult promptly with a lawyer who handles injury claims against governments.

What’s the first thing you do to begin settlement negotiations?

The first step is to submit a “demand package” to the insurance company for the driver that caused the accident. (I’ve never liked that term, so I call it a “settlement package” since it is the start of a negotiation that you hope will result in a settlement.)

The settlement package includes the documents that you have gathered to prove your claim and a letter to the insurance company.

In that settlement letter, you explain how the car accident happened, why their policyholder is responsible and all of the consequences of the accident . . . all of the ways that the accident and your injuries have affected your life.

You conclude by telling the insurance adjuster how much you will accept to settle your claim. This is known as your “demand.” That’s why most in the industry call this a demand letter.

Your settlement letter must be well organized, thorough, authoritative and supported by evidence that proves what you are saying.

What happens after you send your demand package?

The insurance company reviews the information that you submit . . . they call this “evaluating the claim” . . . and then contacts you with its response. Some call you, others send a responsive letter. This could be a couple of days later or a month later. If you don’t have a response in a month, contact the adjuster and find out why not.

The insurance company’s response to your claim might be that they don’t owe you anything. They might take the position that you have not proven your right to recover for your injuries. If this happens, contact a car accident lawyer in your area right away.

Or, if “liability” is clear, the insurance company’s response will probably be that they don’t owe you as much as you have “demanded.” The response definitely won’t be “how should we make out the check?”

If it is, if the insurance company accepts your initial demand, you have requested too little . . . probably far too little.

After the initial positions are staked out, there is normally a give-and-take, back-and-forth negotiation process. With preparation, patience and good luck, this process will lead to a car accident settlement.

What should you know about dealing with insurance claims adjusters?

One thing that can be said about all adjusters is that they don’t work for you. It is not their job to educate you or to protect your interests. To the contrary, they are trained by their employer to give you as little of the employer’s money as they can, to protect the company's ass--ets. They are commended when they settle a case for less than they were authorized to pay.

Never lose sight of this fact, no matter how friendly the adjuster acts.

If that’s true, if the claims adjuster is only looking out for the insurance company and protecting its vault, do you have much chance of settling your claim?

Claims settle out-of-court . . . in fact, the overwhelming majority of claims settle . . . because the insurance adjuster and the insurance company have to resolve claims. They couldn’t possibly take every claim to court. That would be too expensive.

The adjuster that you are dealing with may have hundreds of cases for which she is responsible. She wants to settle them for as little as possible, but her job is to get them settled if at all possible.

If you show the adjuster that you know what you’re doing, that you know the settlement value of your claim and that you are willing to be patient, you have a good chance of settling your claim for a fair amount.

What arguments should you expect the claims adjuster to make to try to defeat or minimize your claim?

The insurance claims adjuster’s response to your claim will probably come from this list . . .

❏ their policyholder was not negligent. They owe you nothing.

❏ you caused the car accident. They owe you nothing.

❏ you were a joint cause of the car accident. They owe you nothing, or less, depending on the law of your state.

❏ there wasn’t much damage done to the cars by the crash. It was a “minor collision.” (They apparently don’t understand that 3,000 pound cars made of steel and other hard materials are made to withstand crashes, but muscles, tendons, ligaments and other body tissues aren’t.)

❏ you were not hurt in this accident.

❏ your injuries are the result of something else, such as . . .

❏ a prior accident.

❏ a later accident.

❏ the normal aging process.

❏ a satanic curse. (I just put that in to make sure you’re paying attention. I haven’t actually heard this one . . . yet.)

❏ you were not hurt as badly as you and your doctors say you were.

❏ your injuries are “only soft tissue.”

❏ there is a “gap” in your treatment, where you went for a period without being treated. To the adjuster, stopping treatment means that you had recovered from your injury or were not injured as badly as you say. When you resume treatment, they will argue that there is some new (usually unspecified) cause for the new treatment.

❏ you got too much medical care, it wasn’t all necessary.

❏ you paid too much for your medical care. The charges are not reasonable.

❏ you haven’t proven that you had to miss work, or miss as much work as you did.

❏ any other cockamamie thing that they can think of to try to avoid responsibility altogether or reduce their obligation to you.

In the usual case, the insurance adjuster will raise several of these arguments.

How do you respond to the claims adjuster’s arguments?

I know what you’re thinking. How can they say these things if they aren’t true?

Welcome to the claims settlement process.

If there is any evidence to support an argument, you will hear it. In support of his arguments concerning the cause or severity of your injuries, the adjuster will often refer to your medical records. Adjusters pour over your medical records looking for things that can be used to defeat or diminish your claim.

There’s almost always something in your medical records they can rely on. For example, if you are over 25 or so, you probably have degenerative (aging) changes in your spine, so the adjuster may try to blame that fact for your neck pain, not the obvious cause of two 3,000 pound vehicles violently colliding and snapping your neck back and forth.

When these arguments are made, and they will be, counter them with facts.

Don’t argue. Don’t get angry. Just go back and point out the facts. Show that while their version is possible, it is far more likely that a judge or jury would believe your version.

How long does the negotiation go on?

There’s no absolute answer to this question. It varies. But don’t be in a hurry.

Some lawyers won’t settle a case until they have had at least 3 conversations (or exchanges of letters) with the claims adjuster. They think that the adjuster won’t make her best offer until then.

When an adjuster tells you she can’t pay any more than she has offered, that may not be true. She may be testing you.

Tell her that you’ll get back to her, then go over the evidence again, looking for something new to point out, or to emphasize. Then, contact her and continue the negotiations as if the last conversation had not occurred. Ask her to “take another look” at the claim in view of the new matter that you have pointed out or emphasized for the first time . . . and offer more.

That process won’t automatically produce a better offer but, at least, it gives you the best chance of assuring yourself that you really have gotten the adjuster’s best offer.

Is the settlement process the same in no-fault states?

No, but . . .

Since you can’t normally recover for pain and suffering in those states, you don’t have to prove it. You don’t have to prove fault either. You only prove and recover medical bills, lost income and other financial losses.

But remember that, even in no-fault states, there are circumstances under which you can make a claim against the at-fault driver. Therefore, even if your accident happened in a no-fault state, approach your claim the same way you would if your accident had happened in a fault state. Because you may end up making a fault claim against the at-fault driver.

Click here to go from "car accident settlement process" to a general discussion of car accident settlements.