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What is Involved in a Personal Injury Insurance Settlement?

By Florence J. Tipton
Updated May 17, 2024
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Before a personal injury insurance settlement is reached, the injured party must file an insurance claim. After all evidence supporting the claim is gathered, a written request for a settlement is sent to the insurance company. Medical expenses and loss of wages are the primary types of requests for compensation in a personal injury insurance settlement. Some people may also seek a personal injury award for pain and suffering. Negotiations for a fair settlement are the norm and rarely does the injured person receive the initial amount requested.

A personal injury claim is generally filed before the investigation process begins. Promptly filing a claim is especially important if a statute of limitations — which is a time limit for establishing a claim — exists. As soon as possible after an accident occurs, the injured person should begin collecting evidence that will support her claim for a personal injury insurance settlement. The evidence is an attempt to establish who was at fault for the accident.

Some people may hire a personal injury attorney whose firm will investigate the accident and gather pertinent details to strengthen the case. If applicable, photographs are taken and records of visits to the hospital or doctor’s office for medical treatments are gathered. The number of days missed from work is also documented.

Once the details of the accident are collected, a written demand letter is sent to the insurance company. Either the injured party or representing attorney will send the letter to a representative at the insurance company. This formal demand for a personal injury insurance settlement is a basic outline of the strengths of the case against the insured.

An argument is made regarding why the insured is liable for the accident and subsequent injuries. The letter should state explicitly the amount needed to cover medical expenses and personal loss suffered after the accident. This amount is typically higher than the amount an injured person expects to receive. Requesting a high insurance payout leaves room for negotiations.

The claims adjuster for the insurance company may respond either in writing or by telephone with a counter offer for the personal injury insurance settlement. The claims adjuster may raise questions concerning full liability for the accident and some of the medical treatments. The offer is usually much lower than the amount requested in the demand letter.

The attorney representing the injured person may decide if the offer is fair and recommend whether to reject or accept. If the offer is rejected, negotiations continue with both sides providing arguments to justify the accident settlement offer. A confirmation letter is sent to the insurance company once the offer is accepted.

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Discussion Comments
By Logicfest — On Apr 01, 2014

@Vincenzo -- your legal fee will usually be less if the case doesn't have to go to trial. Personal injury cases are usually taken on a contingency basis, meaning the attorney charges a certain percentage of the settlement so you don't owe legal fees unless your lawyer get results.

It's a good idea to shop around a bit and find out what those fees actually are. Reputation is important, too -- a lawyer with a low contingency fee might not be very successful at resolving personal injury cases. Oh, and find out what the contingency fee is if the case settles and what it is if it goes to trial -- that fee will almost always go up substantially if your case goes to trial.

By Vincenzo — On Mar 31, 2014

Here's the good news for people with viable personal injury claims -- a good lawyer can negotiate a decent settlement and usually keep the matter from heading to a long, drawn out court proceeding. In fact, most personal injury cases are settled before a suit is filed.

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