Most motor vehicle accident claims are settled out of court, although some such cases are settled in the midst of legal proceedings. Settling your motor vehicle accident claim with an insurance company might be something you can handle yourself if your claim is small and uncontroversial. The larger and more controversial your claim gets, however, the more resistance you can expect from an insurance company and the more important it is to have an experienced personal injury lawyer on your side.
Negotiating with professional insurance company representative over a sizable claim is no easy task – in fact, a competent auto accident attorney is usually able to increase the size of your settlement enough to more than cover the lawyer’s fees. The following description should give you a rough idea of the sequence of events that might need to take place before you receive a settlement check.
The Demand Letter
The demand letter is a detailed formal letter that your lawyer sends to the insurance company (whether yours or the other driver’s) in which you attorney presents your most persuasive claim for compensation. Ideally, it should be drafted by an experienced lawyer, because every sentence is likely to have consequences.
The demand letter sets out the facts and arguments of your case – how the accident happened, for example, and why it was the other driver’s fault (if your claim is fault-based). It will also present your claim for compensation in detail — $36,300 in medical bills, $100,000 in future medical expenses, $12,500 in lost wages, etc., for example. Your lawyer will know to make an initial compensation demand that is justifiable, but may be significantly higher than what you ultimately expect to receive. This gives you room to negotiate.
If the insurance company denies your initial demand (as it likely will), you will need to begin the process of negotiation. Here again, a personal injury lawyer can come in handy – most people simply lack the skills to negotiate their claim with experienced insurance company executives. Although mediation is an option if you reach an impasse, the threat of a lawsuit (and the willingness to carry it out) might work when all other strategies fail.
The Settlement Agreement
Before you receive a settlement check, you will be expected to sign a settlement agreement with the insurance company. Have your lawyer examine the agreement carefully before you sign anything, and don’t be afraid to demand modifications of any clauses that you think are unfair. Never sign anything without your lawyer’s approval.
Remember that the insurance company will almost certainly insist on a clause barring you from ever filing a lawsuit against them over the same accident once you receive your settlement. This means that you must make sure you receive a compensation amount that is enough to cover all of your future losses (such as future medical bills and lost earnings), because you won’t be able to come back and ask for more later on.
Pitfalls for the Unwary: The Statute of Limitations
Every state has enacted a statute of limitations that sets a deadline beyond which you will not be permitted to file a lawsuit over a motor vehicle accident. The deadline for most states is two or three years after the date of the accident. If you miss the deadline, the insurance company will have no motivation to negotiate with you anymore, because you won’t be able to sue them. Don’t let the insurance company lull you into missing the statute of limitations deadline through constant delays.