Do Insurance Companies Want to Settle Car Accident Cases Out Of Court?

If you decide to initiate a car accident injury lawsuit, there is a strong chance the case will never reach court. This is not necessarily bad news.

In today’s guide, discover why insurance companies often make settlement offers to avoid cases going to trial, and learn more about the car accident settlement process.

What’s In This Article:

    Why Do Insurance Companies Want to Settle Out of Court?

    In car accident lawsuits, the plaintiff (the injured party) sues the person who caused them harm (the defendant) for financial damages. Typically, the defendant’s insurer will be responsible for the plaintiff’s damages.

    If you are involved in a car accident and sustain injuries, you may find the defendant’s insurance company makes a quick initial settlement offer. Insurance claims adjusters have a simple vested interest in offering an early settlement: this will save the company time, work, and money.

    Agreeing to a settlement out of court means you need to sign a release relinquishing all future rights to sue for damages caused by the accident in question. This means you might not get the full value of your claim, especially if the full extent of your injuries is not yet apparent.

    You should speak with a car accident injury attorney before you accept a quick initial settlement offer from the insurance company of the defendant who caused your injuries. A lawyer can explain the importance of attaining MMR (maximum medical recovery). An attorney may also advise you that the initial settlement offer is fair and reasonable, although this is seldom the case without some form of negotiation.

    Settlements Are More Predictable Than Trial

    It can be challenging to predict the outcome of a car accident trial. It may appear straightforward to demonstrate that the other party is liable for the accident. Things do not always go to plan in a trial scenario. Not all witnesses perform credibly on the stand, and not all experts will be permitted to testify.

    It is even tougher to prove damages than to prove fault.

    One common fear held by insurance companies is that a jury could award a sympathetic plaintiff higher damages than the case is worth. Plaintiffs, on the other hand, fear the opposite happening – an award that doesn’t match the initial settlement offer, in addition to more litigation expenses and higher attorney’s fees after going to trial.

    Given the risks both parties face by going to trial, it’s unsurprising that over 90% of car accident claims are settled out of court. Most straightforward car accident claims involve clear-cut liability and damages, making an expensive trial a last resort if all other avenues are exhausted.

    Settlements Are More Cost-Effective Than Trials

    Many cases drag on for months or even years, and the costs of litigation soon mount. In addition to the cost of higher legal fees, the insurers of both plaintiffs and defendants need to pay for court costs, expert witness fees, depositions, and travel expenses if the case goes to trial.

    Plaintiffs Who Settle Receive Compensation Faster

    Some plaintiffs simply don’t have time to allow the litigation process to run its course. Many victims with serious accident injuries face piling medical costs at the same time as lost income. The sooner a case settles, the sooner plaintiffs can escape from this debt and move on with life.

    Collecting a settlement is easier and more certain than collecting a judgment after a case goes to trial. If you agree to a settlement, you just need to wait for a check to arrive in the mail. Even if you take a case to trial and win, the defendant can appeal, adding a year or more to the timeframe. In the event of a judgment exceeding limits on the defendant’s insurance coverage when the defendant has only limited assets, there is no guarantee you will collect at all.

    Where do attorneys come into the picture, then?

    The Role of Lawyers in Settlements

    Most attorneys charge on a contingency fee basis. For car accidents, an attorney will typically receive 33% of any settlement brokered before trial, and 40% of any settlement made after trial begins. The more rapidly the case settles, the sooner the plaintiff’s lawyer is paid. Quicker settlements, then, are more profitable for attorneys due to the time and expense of preparing for trial offering no guarantee of an improved outcome.

    Beyond this, most law offices are not set up to take every case to trial. The average lawyer juggles multiple cases, and they do not have enough hours in the day to take all of those cases to trial. Similarly, the criminal justice system would buckle if most criminal cases played out rather than ending in a plea bargain.

    Car Accident Settlement Process

    If you sustain injuries in a car accident, you are legally entitled to compensation for those injuries.

    You should take care of the following when initiating a claim:

    • Get medical treatment
    • Gather all necessary evidence
    • Calculate the value of your settlement
    • Cooperate with the claims adjuster

    You may receive a prompt and reasonable settlement offer from the insurer, but you are more likely to need to negotiate a fair settlement through your attorney.

    How Long Does the Average Car Accident Settlement Take?

    Most car accident claims resolve quite quickly. Half of all claims settle within six months, with the average time it takes to receive compensation after a car accident between 10 and 11 months.

    Speedy settlements are not always better, though. Sending a demand letter and negotiating a superior settlement takes longer – an average of almost 18 months – but average settlements are nearly twice as high.

    To maximize your chances of an expedient settlement offering you the compensation you deserve, retain an experienced personal injury lawyer.

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