Most personal injury claims and lawsuits settle out of court. Despite this reality, the possibility of a trial looms over settlement negotiations because that’s an alternative if negotiations fail. The typical process is seeking a settlement but preparing for court if settlement negotiations break down. A claim can settle any time before a final verdict.
All personal injury cases are different depending on the facts and circumstances, but we discuss some of the common steps in the negotiating process below.
The Initial Consultation
Most personal injury lawyers will offer you a free initial consultation. At the consultation, the lawyer will gather information and evaluate your claim. Seeking a consultation should be your first step in pursuing your personal injury claim.
Complete Medical Treatment
You may have to wait until you complete medical treatment or your doctor certifies that you have reached Maximum Medical Improvement (the point where further improvement is unlikely) before you begin negotiating your claim. Until MMI, it will be difficult to determine how much your claim is worth.
The Demand Letter
Your first formal contact with the insurance company should be a written demand letter.
Your demand letter should include:
- The parties to the accident and their insurance companies;
- A description of the accident;
- A description of damages, including injuries; and
- A general demand for compensation.
Every sentence in a demand letter matters. Your best bet is to have your lawyer draft it for you.
The Insurance Company’s Reservation of Rights Letter
The insurance company will send you a “reservation of rights” letter, which will state that the insurance company:
- Is investigating your claim; and
- Reserves the right to deny your claim if it lacks merit.
A reservation of rights letter from the insurance company is routine and shouldn’t concern you.
Your lawyer will conduct an investigation to piece together exactly what happened and who should bear liability. Asking you questions about the case is only the first step. Your attorney may reach out to police officers who were at the accident scene for accident reports or your medical providers for medical records. Your lawyer will seek admissible evidence, and they might seek the help of experts (an accident reconstruction specialist or a medical expert, for example).
Calculating the Value of Your Claim
If your injuries will require long-term medical treatment or if they involve a long-term occupational disability, it could be difficult to calculate the full value of your claim. For example, you may need to calculate your medical expenses and lost earnings 15 years into the future.
An experienced personal injury lawyer can work with economic experts to estimate the true value of your claim, including future losses caused by your injuries. Remember, if you settle for too little, you can’t come back to ask for more money later.
Insurance Policy Limits
Insurance policy limits are a practical limitation on your recovery. No matter how extensive your losses are, the insurance company has no obligation to pay any amount greater than its policy limits. California’s mandatory minimum auto accident liability insurance of $15,000 per person is a particularly stringent limitation, though some drivers may have higher policy limits.
During the initial negotiation stage, you will need to convince the insurance company that you can win at trial if it comes to that. You do that the same way you win at trial—by presenting admissible evidence and offering rational arguments. Negotiating skills could make a tremendous difference in how much compensation you recover.
Beware of Insurance Adjuster Tactics
Don’t fall for a smile and a warm handshake. The insurance adjuster is your adversary, not your friend. Their pay comes from the insurance company, and they represent the insurance company’s desire to deny your claim or pay as little as possible. Insurance adjusters are professional negotiators with many tricks up their sleeves.
The following are just a few insurance adjuster tactics:
- Persuading you to represent yourself. Insurance companies love claimants who don’t hire lawyers to represent them.
- Monitoring your social media accounts for evidence that they can use against you. Don’t accept any friend requests while your claim is pending. In fact, your best bet is to stay off social media altogether until your claim resolves.
- Drafting a settlement agreement with dense legal jargon and then pressuring you to sign it before your lawyer examines it.
These are only a few tricks that insurance companies use to save themselves millions of dollars every year. Hiring a personal injury lawyer to represent you in negotiations with the insurance company will save you from these tactics.
Filing a Lawsuit
At some point, you might file a lawsuit even though you still plan to settle your claim out of court. The main reason for filing a lawsuit is to gain access to the court-enforced discovery process for gathering evidence from the opposing party and third parties.
Also, you must be aware of the statute of limitations that applies to your personal injury case. If you cannot settle with the insurance company, you will likely file a personal injury lawsuit. Most California personal injury lawsuits must be filed within two years of the accident date. You are barred from recovering compensation in a lawsuit if you miss the deadline.
The Settlement Agreement
A settlement agreement is difficult to draft, and a single mistake could spell disaster. Have your lawyer draft a settlement agreement for you, or carefully review the agreement that the insurance company drafts. Once you sign it, you cannot change the terms of your settlement.
How Can a Personal Injury Lawyer Help?
An experienced personal injury attorney in San Diego, CA can help you at every stage of the settlement process – investigation, negotiation, and drafting a settlement agreement. Your lawyer can also help you file a lawsuit if necessary.
Remember, most personal injury lawyers charge a contingency fee based on a pre-agreed percentage of the compensation awarded in your claim. If your compensation turns out to be zero, your legal fees will also be zero. If you’ve been in an accident, contact our law firm at (619) 777-5555 for help with your claim.