When to Handle Your Own Accident Claim

For car accidents or simple personal injury claims with only modest injuries, it may make economic sense to handle it without hiring an attorney.

Few people realize that, after an accident, it is often possible to get fair compensation by navigating the accident claims process yourself. With basic ­information about how the process works, a bit of organization, and a little patience, you can handle your own injury insurance claim without a lawyer -- and without the insurance company unfairly denying or reducing your compensation.

And you can certainly receive more than you would if you submitted a claim yourself without knowing how insurance ­companies and their claims processes work.

You’ll Save Money on Legal Fees

If you hire a lawyer to handle your claim, the lawyer will take a fee of 33-40 percent of your recovery -- and may charge you for case expenses that can quickly run into hundreds of dollars.

If you’ve suffered any serious injuries or long-term effects, then damages can add up to tens of thousands of dollars or more. In that case a lawyer should be able to negotiate far more than you would be able to on your own, more than making up for the legal fee.

However, when the injuries are modest – think short-term sprains and soft-tissue injuries - a lawyer can usually gain for you only an extra 5% to 20% above what you can obtain for yourself once you ­understand the process. Subtract the lawyer’s fees and costs from the extra amount of the settlement, and you can actually end up losing more than a third of the money to which you are entitled.

The Claims Process Is (Usually) Simple

Despite what the insurance industry and some lawyers would like you to think, settling an ­injury claim with an insurance company can be quite simple. Many simple claims involve no more than a few short letters and phone calls with an insurance adjuster who has no legal training and no more information than you can find on a reliable website (like ours) or in an authoritative book. You don’t need to know technical language or ­complex legal rules. Your right to be compensated usually depends on nothing more than common­sense ideas of who was careful and who was careless.

You Know Your Claim Best

You know better than anyone else -- insurance adjuster or attorney -- how an accident hap­pened. You were there, they weren’t. And you know best what injuries you suffered and what your physical condition, lifestyle impact, and other circumstances have been since.

The Compensation System Is Structured

The amount of fair compensation in any given case does not come out of a crystal ball that only lawyers and insurance companies know how to read. Rather, a number of simple factors -- type of accident, injuries, medical costs -- go into figuring how much a claim is worth.

When the injuries are modest, the amount an insurance company will be willing to pay usually falls into a fairly narrow range, whether a lawyer handles your claim for you or you handle the claim yourself. An insurance adjuster who learns that you are organized and that you understand the claims process will usually settle the claim with you right away, and for virtually the same amount as if you had a lawyer.

Insurers are Motivated to Settle

An insurance company’s willingness to settle your claim quickly has nothing to do with fairness and every­thing to do with the company saving money in the long run. It’s simply cheaper for it to pay you than to prolong the fight.

In the first place, insurance companies must spend money to fight. The longer an adjuster works on a claim, the more money the company is spending on that claim. If lawyers get involved, the company’s expenses become steeper. And if the claim actually goes to court, costs skyrocket. Therefore, once an insurance company knows it is likely to have to pay somewhere down the line -- because you understand how much your claim is worth and will not drop your claim without a settlement -- it makes financial sense for the company to pay sooner rather than later.

The cost of fighting claims is so great for an insur­ance company that it will often pay a claimant at least a small amount -- what is called “nuisance value” -- even if the odds favor the ­insured if the claim went to court. In other words, if it costs an insurance company several thousand dollars in legal costs to fight a claim in court, and there is any chance the company might lose, it is statistically much cheaper for it to pay a quarter or a tenth of that to settle the claim quickly.

If you're not sure whether a lawyer is worth the additional cost, read more in our section on hiring and working with an injury lawyer.

This article is an excerpt from How to Win Your Personal Injury Claim by Attorney Joseph Matthews (Nolo).

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