Texas Car Accident Settlement Example

After a car accident injury claim in Texas, here's how an insurance settlement might play out.

Margaret is driving down an off ramp on a freeway in Houston. The ramp narrows from two lanes down to one, and a car in the other lane accelerates to get in front of Margaret, hitting her car’s right front corner. The collision causes Margaret’s car to veer to the left and hit the retaining wall. Both drivers stop, and the police are called.

Injuries and Medical Treatment

When the cars come to rest, Margaret realizes that her neck and back are hurting. The police call an ambulance for Margaret. At the hospital, the ER doctor diagnoses neck and back strain and sprain and refers her to her general practitioner. (Learn more about Common Car Accident Injuries.)

Margaret sees her doctor later that week, and he tells her to rest for two weeks. After two weeks, she isn’t much better, and so he refers her to a chiropractor. After two months of chiropractic treatment, Margaret feels 80% better. She does exercises at home for another three months and feels recovered. Margaret is the vice-president of a small company. She did not come into work for two weeks, but she did some work from home, and her company paid her as usual.

The Texas Statute of Limitations

Margaret needs to be aware of Texas’s statute of limitations, which is a law that sets a deadline for filing a lawsuit.

In Texas, the statute of limitations for car accidents is two years. This means, if you were involved in a car accident as a driver, passenger, pedestrian, or property owner, you have two years from the date of the accident to file a lawsuit in the state’s courts over an injury or vehicle damage.

If you have not settled the case, and you don’t file a lawsuit within the time period set by the statute of limitations, your case is over unless you fall within one of the very limited exceptions that might stop the clock. Don’t wait until the last minute. If you can’t settle your case well before the statute of limitations expires, it may be time to contact a Texas car accident lawyer. (Learn more about Car Accidents and the Lawsuit Process.)

Fault Rules in Texas

You want to make sure that the adjuster has all of the medical and financial documentation that supports your claim for damages. You also want to make sure that the adjuster has all of the information necessary to evaluate who was at fault in the accident. This is especially important in a case like Margaret’s, where proving liability may be difficult because two lanes were merging into one. Accordingly, Margaret needs to be aware of Texas's rules on comparative negligence because the other driver could claim that Margaret was negligent for not letting him in front of her.

Texas has what is called a “modified comparative fault” rule, where your total damages award is reduced by whatever percentage of the “fault” the judge or jury believes is yours. This means if you are found to be in part negligent with respect to your injury, your award of damages is diminished in proportion to your fault, up to a certain point. If, for example, you were awarded $250,000 in damages, but were found 20% at fault, your damages would be reduced to $200,000. However, if you were found to be 50% or more at fault, you would receive no damages whatsoever from other parties.

In order to maximize your potential recovery, you want to make absolutely sure that the defendant’s adjuster knows that you did nothing wrong. (Learn more about Proving Fault for a Car Accident.)

Are You Ready to Settle?

It's important to note that the other driver may carry only the minimum amount of liability insurance required under Texas’s car insurance laws. In Texas, a driver is only required to carry bodily injury liability coverage in the amount of $30,000 per person and $60,000 per accident, and property damage liability coverage in the amount of $25,000 per accident. If your medical bills and other damages exceed those minimums, but the other driver carries no additional coverage, then an insurance settlement may not cover your losses, and you may want to talk to an attorney about your other options.

In Margaret’s case, her out-of-pocket (compensatory) damages total $9,000. The breakdown looks like this:

  • $6,000 in medical bills (ambulance, hospital, doctors, and chiropractor)
  • $0 lost income (although she lost time from work)
  • $3,000 in vehicle damage

Margaret and her attorney decide that another $15,000 in damages is appropriate to compensate for Margaret’s pain and suffering in connection with the accident, and they make an initial demand of $45,000 to settle the claim. After negotiating with the insurance adjuster, Margaret accepts a final settlement of $17,500.

As mentioned above, you want to settle your claim or file a lawsuit (or at least turn the case over to a lawyer) well before the two-year statute of limitations time period runs out. But you also don’t want to settle it too early -- meaning before you are either fully recovered or are as good as you are going to get. This is known as reaching "maximum medical improvement" or MMI.

In Margaret’s case, she was at MMI, and so she was ready to settle. Learn more about Settling a Car Accident Case.

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