Your Car Accident Injury Claim: Settle or Sue in Court?

If you've been injured in a car accident, you might think a lawsuit and trial will get you the best result, but settling your claim is usually the quickest and safest option.

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  • Many people imagine themselves ending up on the witness stand in a courtroom when they file a car accident lawsuit, but only a small fraction of civil cases end in trial. According to the U.S. Department of Justice, of the 7.4 million civil claims filed in state courts in 2005, only 26,950 ended in a trial.

    So, why do most people choose to settle their claims while only a few roll the dice on a jury verdict? Here's what you need to know about when to settle and when to sue after a car accident-related injury:

    • You can settle a car accident claim before or after a lawsuit is filed.
    • Car accident lawsuits tend to be expensive, time-consuming, and unpredictable for the person suing (the "plaintiff") and the person being sued (the "defendant").
    • Car accident settlements offer both parties the benefit of lower legal costs, less risk, and a faster and more private resolution of their dispute.
    • An effective demand letter is the centerpiece of the settlement negotiation process.
    • The "settle or sue" question almost always comes down to money.
    • A lawyer can help you decide whether a lawsuit and trial is the right move in your case.

    In this article, we'll take a look at both options: settling your car accident injury claim and going through with a court or jury trial.

    Settling a Car Accident Claim

    If you've been injured in a car accident as a result of someone else's carelessness ("negligence"), you have a legal right to be compensated for your losses. You could go straight to court and file a personal injury lawsuit against the at-fault driver. But most people prefer to make a third-party insurance claim first and try to negotiate a settlement.

    What Is a Settlement?

    A car accident settlement is essentially an agreement to resolve a dispute outside of court. In most cases, the person who was injured in an accident (the "claimant") demands compensation from the at-fault party's insurance company for property damage, medical bills, lost wages, and pain and suffering. The insurer then makes a settlement offer, which the claimant can accept, reject, or counter.

    When a claimant and insurer agree on a settlement amount, the claimant signs a document called a release. The release puts in writing the insurance company's agreement to pay the claimant a certain amount of money in exchange for the claimant's promise to not pursue a lawsuit related to the accident.

    Advantages of a Car Accident Settlement

    Over 90% of personal injury cases settle for good reason. If you've been injured in an accident, the potential advantages of settling your case before going to court include:

    • ensuring you'll get paid
    • getting paid faster
    • not having to pay as much in court costs and attorney's fees
    • not having to go to court multiple times
    • avoiding the stress and unpredictability of a trial, and
    • keeping the details of your claim private.

    Insurance companies and at-fault drivers also benefit from the speed, certainty, ease, confidentiality, and lower cost of a settlement versus a trial.

    Learn more about the advantages of settling a personal injury case.

    Disadvantages of a Car Accident Settlement

    Settlements are a compromise. If you've been injured in an accident, the main disadvantage of settling your claim is that you'll probably have to accept less money than the maximum you could get if you were to file a lawsuit and win at trial.

    And you could settle your case too soon. If you settle your claim before you reach "maximum medical improvement" you risk selling yourself short. Once you settle your claim, you're agreeing to release the at-fault driver from any liability in connection with the car accident. If your injuries turn out to be worse than you thought or complications arise, you can't go back and ask for more money later.

    Get Settlement Talks Started with a Demand Letter

    A demand letter is a formal request to settle a dispute before you file a car accident lawsuit. A good demand letter should:

    • explain why the other side is legally responsible (liable) for the accident
    • describe the nature and extent of your injuries and losses, and
    • conclude with a demand for a specific lump sum payment to settle your claim.

    Writing an effective demand letter takes patience and preparation. You have to gather the records necessary to back up your claims about liability for the accident and damages.

    For example, if you received medical treatment, you should request all of your medical records from your provider as soon as possible. This step can take several months and many medical providers charge a fee for the records.

    If you missed work, you should also request your employment records—showing your typical hours and salary before the accident, and any time you missed as a result of your injuries, including time off for doctor appointments.

    When you finish gathering your supporting documents, write a clear and straightforward demand letter. Your letter should stick to the facts about how the accident happened and why the other driver was at fault. If the police report supports your position, be sure to include a copy.

    Next, your letter should clearly describe your accident-related losses, including property damage, injuries, medical treatment, medical expenses, lost income, pain, discomfort, and disruption to your life caused by the accident.

    Your letter should end with a specific demand to settle your claim. Ask for more than you're willing to settle for so that you have plenty of room to negotiate, but nothing too unreasonable. You want the insurance company to take you seriously.

    Be careful to send your demand letter to the right person or entity. In most cases, you'll be sending it to the person who caused the accident and that person's insurance company. Settlement talks should begin shortly after the insurance adjuster assigned to handle your case receives your demand letter.

    Learn more about personal injury insurance claims after a car accident.

    How Likely Is It That My Case Will Settle?

    Again, the vast majority of car accident claims settle, so it's highly likely that your claim will settle too.

    The core question to ask is whether the risk of losing at trial—and receiving zero compensation—outweighs the difference between the insurance company's settlement offer and your estimate of the value of your car accident claim.

    What Is the Average Car Accident Claim Settlement?

    Martindale-Nolo surveyed readers across the United States about their experiences with car accident claims from 2015 through 2020. The overall average settlement award was $23,900, but most readers received less than $10,000.

    Your settlement might be more or less than the average settlement amount. Factors that are likely to affect your settlement amount include:

    • the severity of your injuries
    • the length of your recovery
    • how obvious it is that the other driver was at fault
    • your financial losses, and
    • available insurance coverage.

    Learn more about the "average" personal injury settlement.

    Filing a Car Accident Lawsuit

    Sometimes, despite your best efforts, you won't be able to settle your car accident claim. The other driver might say that you were at fault for the accident. Or the insurance company might make a lowball offer that you're unwilling to accept without a fight.

    You have a right to your day in court—here's what you can expect when you get there.

    Advantages of Going to Court

    Perhaps the biggest advantage of taking a car accident claim to trial is that you could end up with a much higher court award than you expected. Juries are unpredictable and the amount of money you receive if you win your case will be up to them to decide. You could end up with far more than the insurance company offered.

    Other potential advantages of going to court include:

    • you're more likely to have a lawyer advocating for you in court
    • you get to tell your story publicly, and
    • you have a chance to hold the defendant accountable for causing you harm.

    Disadvantages of Going to Court

    Going to court is a hassle and the outcome of a lawsuit is out of your control.

    Other potential disadvantages of pursuing a lawsuit include:

    • having to pay court costs and attorney's fees
    • waiting months or years for the legal process to play out
    • potentially receiving no compensation if you lose at trial, and
    • not being able to collect on your judgment even if you win.

    How to File a Car Accident Lawsuit

    Every state has a small claims court that offers people a simple, low-cost way to resolve disputes involving relatively small amounts of money.

    If you want more than the small claims court limit in your state, you'll have to file a lawsuit in civil court, probably with the help of a car accident lawyer.

    Typical steps in a personal injury lawsuit include:

    Step 1: File and serve a complaint. A complaint is the first official document in the case, laying out what the plaintiff says the defendant did and how the plaintiff was harmed by the defendant.

    Step 2: The defendant's answer. The defendant has a certain amount of time, typically a month or so, to answer the plaintiff's complaint. Many defendants hire a personal injury lawyer to represent them or their insurance company may hire a lawyer for them.

    Step. 3: Discovery. In the discovery phase, both sides exchange information about the case in a back-and-forth process that includes written questions and answers (interrogatories), face-to-face questioning (depositions), and requests for documents, like medical records.

    Step 4: Settlement negotiations. Lawyers typically talk about settlement throughout the lawsuit process as they learn more about the case and the risks and benefits of going to trial crystallize. Judges almost always require lawyers to attend a settlement conference with the judge before starting a trial.

    Step 5: Trial. If your car accident case is one of the few that doesn't end in a settlement, a judge or jury will hear the evidence and decide whether it's more likely than not that the defendant is liable (at fault) for the car accident. If the defendant is liable, the judge or jury then decides on the amount of damages to award.

    How Long Will a Car Accident Lawsuit Take?

    Car accident lawsuits follow the same steps, but the amount of time each step takes varies from case to case.

    From start to finish a car accident lawsuit will probably take at least one year to complete. Some cases settle almost immediately after a lawsuit is filed and discovery begins, while others drag on for years while the lawyers argue over liability and damages.

    How Much Money Can Someone Sue for After a Car Accident?

    You can sue the at-fault party for the full amount of your damages. At a minimum, you'll want to recover your accident-related medical expenses and property damage. But you're likely entitled to more than that if you've been harmed by someone else's negligence, including compensation for your:

    • lost wages (past and future)
    • pain and suffering (physical and mental), and
    • loss of enjoyment of life.

    As a practical matter, the defendant's insurance coverage will be a big factor in how much compensation you get. If the at-fault driver's insurance policy has a limit that is lower than your damages, the driver is underinsured. The insurer will only pay you up to the insurance policy limit. You'll have to go after the driver's personal assets for the rest or turn to your own uninsured/underinsured motorist coverage.

    Can I Still Settle After Going to Court?

    You don't give up your ability to settle if you file a lawsuit. You can settle any time before or after you file a complaint until a final verdict is reached.

    Learn more about how a personal injury lawsuit is settled.

    Do I Need a Lawyer for a Car Accident Injury Claim?

    You don't need a lawyer for a car accident injury claim. In fact, you may be able to get more compensation for your injury and a faster resolution if you handle your own claim after a minor accident instead of hiring a lawyer. But you have to be willing to research the law and stand up for yourself with insurance adjusters and lawyers.

    The skills of a knowledgeable car accident attorney are often worth the money you have to pay the lawyer to represent you. You probably need a lawyer if any of the following are true:

    • your injuries are serious or disabling
    • your case is legally or technically complex
    • you don't feel comfortable handling your own claim, or
    • the insurance company delays or denies your claim.

    Learn more about when to lawyer up after a car accident.

    Next Steps: Should I Settle or Go to Court?

    The "settle or sue" question usually boils down to how much the insurance company is offering you and what you think your car accident case is worth.

    If you believe your case is worth a lot more than what the insurer is offering, you probably should file a lawsuit. But if the offer is close to what you think your case is worth, you should think hard about whether the stress and cost of going to court are worth the potential reward.

    If you are on the fence about whether to settle or sue, a lawyer's opinion and experience with similar car accident cases can be invaluable.

    Learn more about how an attorney can help in a car accident case. You can also connect with a lawyer directly from this page for free.

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