After a car accident, pursuing a fair settlement can be a complicated process. Understanding how a car accident settlement works is essential to protect your rights and ensure you receive the compensation you deserve. There are several critical steps in the settlement process.
At the outset of your car accident case, you should know that there is a high likelihood that it will result in a settlement agreement between you and the insurance company representing the other driver. Litigation is rare in car accident cases, and very few lawsuits will ever go to trial.
However, a car accident settlement does not happen overnight. Insurance companies are not in the business of quickly settling claims for their total value. Instead, they want to make things as difficult as possible because they think you may give up and be grateful for whatever you get from them.
Just because you get a car accident settlement does not mean that it is the best outcome for you. Your settlement check may not be enough to compensate you for your current and future damages. When you hire a car accident attorney for your case, there is more of a chance that you will receive the money you need and deserve. They know how to gather evidence, assess damages, and calculate fair compensation for injuries, pain, and suffering.
Do not let the insurance companies push you around in any way and make your case harder than it already is. A Tupelo car accident lawyer can hold insurance companies accountable if they will not pay you in full for your injuries.
You May File a Claim with the Driver’s Insurance Company
Most car accident victims will begin the legal process by filing a claim with the responsible driver’s auto insurance company. By this point, your car accident attorney has already completed an investigation of your accident, and they have compiled the evidence you need to show that the other driver was the one to blame for the accident. In addition, your car accident lawyer will have documentation of your damages and request a certain amount of money from the insurance company. Your car accident lawyer may have presented your claim informally, or they did so through a more formal demand letter.
Insurance companies will take time to consider your claim (and they will often take far more time than you want because they think running out the clock is to their advantage). They will decide to accept liability in your case, or they may deny your claim altogether.
Insurance companies may deny the claim if they do not believe you have presented enough evidence of negligence or that you were to blame for the accident yourself. However, it is rare for insurance companies to deny claims outright, and there is even less of a chance of that happening if a car accident lawyer presents it professionally.
An experienced attorney has the negotiation skills needed to handle insurance companies and their representatives.
The Insurance Company May Deny Your Claim or Make You a Settlement Offer
At some point, insurance companies may make you an offer to settle your claim. Here, they already believe you have a legal right to compensation for your car accident injuries, and they will offer you money in exchange for that right. What the insurance company puts in front of you is merely an offer and is not a conclusive determination of the amount of money you are due.
A settlement agreement results from a lengthy negotiation process between you and the insurance company. It represents the other party who potentially owes you money for their wrongful actions. If there is no settlement agreement, a jury may decide that the other driver owes you money, and they can issue an order in the name of the court that directs the driver to pay you.
Settlement Offers Do Not Always Mean Settlement Agreements
Insurance companies may make you an initial settlement offer that has little relation to the reality of your case. Whether they want to put down a placeholder that telegraphs their future intention to settle your case or they want to catch you unaware of the actual value of your claim, insurance companies are known for extending low initial settlement offers.
In all likelihood, they do not expect you to accept the initial offer. However, if you do not have a car accident lawyer to both help you know what your claim is worth and to fight for you to get top dollar, there is more of a chance that you may accept a settlement offer that does not fully compensate you.
You and the insurance company have likely been going back and forth for some time, exchanging figures and possible settlement numbers. You may do this as part of the informal claims process or during a lawsuit (most car accident lawsuits will result in a settlement agreement, whether it is through direct negotiations or alternative dispute resolution, such as mediation).
At some point, it is in both of your interests to reach an agreement, provided that the insurance company is reasonable during the process. At that point, you will have the underpinnings of a settlement, but it has yet to be a concrete agreement.
You Need to Sign a Written Legal Agreement for a Settlement
A settlement is often a multi-page document that outlines the contours of the agreement between you and the insurance company. Keep in mind that this is a legally binding contract.
Money may only be part of the agreement, and the insurance company wants you to release it from any future liability concerning your claim. In other words, you cannot go back for more money in the future if you underestimate the value of your claim or if you did not get enough damages. The release clause is essential to insurance companies because it allows them to close the claim from their books.
Settlement Agreements Will Contain a Release Clause
There may be other terms you need to negotiate before reaching the actual agreement. For example, the defendant may not want to admit liability as part of the settlement. There will be an actual document reflecting the contours of your agreement with the insurance company that both parties must sign. The insurance company may try to present you with a standard deal, and your car accident lawyer may negotiate language that can work for you.
The release clause makes it essential that you both know the value of your claim now and fight to get enough money for your injuries. If you come away with less money than you deserve, there is nothing that you can do to fix that problem in the future. Your car accident lawyer should advise you to turn down inadequate settlement offers for that exact reason.
You Have to Decide How You Want to Receive Your Money
Your settlement agreement may also state how you want to receive your money. Some claimants wish to get their money all at once in a single lump-sum payment. They may need all of their money now, or they are confident they can manage the settlement funds in the future.
Other claimants may opt for a structured settlement, receiving their money over time. A structured settlement can keep you from overspending your means now, preserving your settlement money.
Agreeing to the settlement’s actual language may take a few weeks. At that point, insurance companies may need to seek their own internal approvals to write the check. Depending on the check size, more approvals may be necessary (although the insurance company likely would not have agreed to a large settlement without the approvals of higher-ups). Even after the settlement’s approval, the insurance company can still take some additional days to transfer the money.
The Money Will Initially Go to Your Car Accident Lawyer’s Escrow Account
Car accident settlement money will not go directly to you; your car accident lawyer will receive it first. Other people may have some right to the funds and must receive payment. For example, your car accident lawyer has worked for you on a contingency basis, and they will receive roughly one-third of your settlement, depending on the terms of your representation agreement.
In addition, medical providers or your health insurance company may have a lien against your settlement for services they have already provided you. They, too, can receive money from your settlement. The fact that you need to pay back medical providers makes it even more crucial to negotiate an adequate settlement agreement.
Finally, suppose you have accepted any money from a litigation financing company to hold you over until you receive a settlement check. In that case, you owe them money from the proceeds of your case, depending on the percentage they own. Your car accident attorney will calculate what everyone is due and transfer the necessary funds to them. That part of the process can take several days, but you are only one step away from receiving compensation for your injuries.
You Receive Your Compensation Shortly After Your Car Accident Lawyer
Once everyone has received what you owe them, your lawyer will transfer the money from their escrow account to yours (assuming you have opted for a lump-sum settlement). If you have decided on a structured settlement, the company that sold you the product will receive the money, and they will begin to make payments to you in accordance with the terms of your agreement.
As you can see, reaching a settlement agreement in your car accident case can be challenging. You may need to fight the insurance companies tooth and nail for every dollar that you get in your case. If they even offer you any money, it may be a fraction of the value of your case, and you will have to pressure them to pay up over time. It can take you many months, or even more than a year, to finally reach a settlement agreement. However, it is crucial to be intentional and not in a hurry to get money because you can get less than you deserve.
You Need a Car Accident Lawyer to Fight the Insurance Company
You cannot get a complete car accident settlement if you try to deal with the insurance company on your own. The insurance adjuster can spot an easy mark, and insurance companies will do everything possible to exert their advantage over you. You only stand a chance of going toe-to-toe with the insurance company when you hire an experienced car accident attorney to represent you in the legal process. Your car accident lawyer knows the insurance company’s pressure points and how to handle them in the settlement process.
Insurance companies may try to play hardball with you, but you can turn the tables on them and beat them at their own game. The best way to do this is by getting help from a car accident attorney at the outset of the legal process, right after you have suffered an injury in the crash. You do not need to pay a car accident attorney when you first hire them, nor do you need to pay their hourly bills during your case. They work for you on a contingency basis, meaning you pay them only if you win your case.
Furthermore, a lawyer provides peace of mind and reduces the stress of the process. Dealing with insurance companies and their adjusters can be intimidating and time-consuming. With a lawyer handling the negotiation process, you can focus on your recovery and personal well-being, knowing your case is in capable hands.
Hiring a lawyer for your car accident settlement negotiations is crucial. They bring experience, advocacy, and peace of mind to the table. Working with a lawyer increases your chances of receiving the compensation you deserve and handling the legal process successfully.
Remember the importance of having a legal professional on your side during this challenging time. A knowledgeable personal injury attorney will level the playing field and increase your chances of securing a favorable settlement. Do not hesitate to contact an attorney today.
