Most personal injury claims resolve out of court through a negotiated settlement. A settlement is an agreement between the injured claimant and the at-fault party's insurance provider; the insurer offers the claimant compensation in exchange for a release from further liability. While settlements usually happen before a court trial, the parties can settle before a judge or jury. Here are some factors that affect the time it takes for a personal injury claim to settle.
Hiring a Lawyer and Starting Your Claim
After the expenses of an injury caused by another person’s negligence begin piling up, many people hesitate to speak with a lawyer about the accident because they are afraid to find out how much they will have to pay for one. A lawyer offers services that will benefit your claim. Importantly, lawyers have the experience to keep the claim moving forward instead of getting bogged down or having the process controlled by the at-fault party’s insurance company.
Fortunately, many personal injury attorneys work on a contingent fee basis, meaning you do not have to pay for your lawyer’s services until your claim reaches a favorable resolution. In other words: there is no reason to wait to speak with a lawyer, and doing so early allows them to begin working on the case as soon as possible.
Every Claim Has a Time Limit
The statute of limitations is a deadline that state lawmakers place on filing a claim as a lawsuit in court. Most states have statutes of limitation for personal injury claims between one and four years. For example, the statute of limitations in Pennsylvania is two years from the date of injury. In Florida, however, most victims must file personal injury claims within four years of the accident date.
Failing to file the lawsuit by the deadline will generally result in losing the ability to use the court system to seek compensation. Without the ability to pursue the matter in court, personal injury claimants usually find that the insurance company will not offer a settlement because the claimant has no legal recourse.
After hiring a lawyer, one of the first things they will do is investigate the accident that caused your injury. This investigation is different than a police investigation at the accident scene, which occurs to determine if anyone broke the law. It is also different from an investigation conducted by the at-fault party’s insurance company.
Your lawyer will investigate to:
- Identify all at-fault parties and their respective insurance companies
- Gather evidence to prove liability, such as a police report or accident report, photos of the accident, and information from witnesses
- Collect documentation to prove your injuries and show expenses
Waiting for Maximum Medical Improvement
While the lawyer investigates your claim, they may also wait for you to reach maximum medical improvement (MMI). MMI is a term often used in personal injury and worker’s compensation claims to refer to the point at which a doctor determines that an injured person’s condition will make little further improvement, even with continued treatment. Until a person reaches MMI, accurately estimating a claim’s value is difficult. Once a person reaches MMI, it is easier to calculate past expenses and estimate future costs for permanent injuries.
Some injuries take longer to heal than others. Many claimants become frustrated by continual follow-up visits with their doctor. However, attending appointments and following your doctor’s orders is crucial to your personal injury claim.
Valuing the Claim
Many individuals believe that a claim’s value is a straightforward total of the expenses you have incurred as a result of the injury. This is true when calculating your economic damages—the compensation sought for your expenses. However, personal injury claimants can also seek compensation for non-economic losses, such as pain and suffering or emotional distress. Because these losses do not come with a bill or a receipt, lawyers use a formula to calculate them.
Some of the issues that affect the value of non-economic damages include:
- How much insurance the at-fault party has: Liability policies all have policy limits, which set the maximum amount payable for injuries.
- How severe your injuries are: More severe injuries usually have a more significant financial and emotional impact than minor ones and require a higher level of compensation.
- Whether you were partially to blame for the accident: In most cases, even if victims were partly responsible for causing the accident, they can still seek compensation from others who were also liable.
Submitting a Demand
After investigating your case and estimating your claim’s value, your lawyer will submit a demand package to the at-fault party’s insurance provider. The demand package contains a demand letter outlining the claim’s details and settlement requests, as well as documentation and evidence to support the claim.
When the at-fault party’s insurance provider receives the package, they will assign a claims adjuster to evaluate the claim. The claims adjuster works for the insurance company to protect its bottom line.
Depending on your state’s laws, the claims adjuster usually has between one and three months to review and respond to the claim. Failing to respond to the claim promptly is a bad faith insurance practice.
The claims adjuster can respond to a claim in three ways:
- They can accept their insured’s liability, accept the claim, and process it for payment.
- They can deny the claim and notify the claimant of the reason for the denial.
- They can offer to settle the claim for less than its value.
Juries only decide 0.8 percent of cases in the U.S. Instead, most cases settle well before trial.
Settlements are the preferred method of claim resolution because:
- Litigation is expensive for everyone
- Settlements usually take less time
- A settlement allows both parties to have a say in the resolution
Generally, the insurance adjuster’s first settlement offer will be less than half of the claim’s value. Your lawyer will negotiate with the adjuster on your behalf to get them to increase their offer. Your lawyer will also provide the guidance you need to understand the offer so you can make an informed decision about whether to accept it, continue negotiations, or file a lawsuit in court.
While filing a lawsuit protects your right to use the court system to seek compensation, it does not stop the settlement process. Filing a lawsuit is often the catalyst to more productive settlement negotiations, as the insurance company wants to avoid the expense of a trial and the uncertainty of having a judge or jury decide the matter.
Issues that Can Delay a Settlement Agreement
Personal injury cases often take one to three years to settle. This time can be shorter if the claim is straightforward or low value.
Some of the issues that can delay a settlement agreement include:
- Disputes over who caused the accident that injured you: If the claims adjuster is not convinced that their insured caused the accident or there were multiple responsible parties, sorting out who caused the accident can add time to the settlement process.
- The severity of your injuries: Severe injuries can substantially increase the value of your claim due to more medical treatment needed, more significant wage loss, and more psychological effects. In most cases, the higher the claim value, the more difficult it is to settle.
- Disputes over other provisions in the agreement: Often, settlement agreements are not just about the amount of compensation. The claimant could request that the at-fault party admit guilt in the settlement, or the insurance company could insist that there is a provision in the agreement that states that the settlement is not an admission of guilt. There can even be provisions about whether either party can disclose the terms of the settlement. These disputes can also delay the process.
After an Agreement is In Place
Once you accept a settlement agreement, the insurance company may take several weeks to send your compensation.
Some things need to happen first, such as:
- If you filed a lawsuit, your attorney would file a motion to dismiss the case from court.
- You will be required to sign many documents, including the settlement agreement and a liability release that releases all claims you have against the at-fault party.
- Once all the documents in the agreement are signed and returned to the insurance provider, they will process the payment and send it directly to your lawyer.
- Your lawyer will then deduct the percentage of the funds you agreed to pay them for their services. Additionally, they will use some funds to satisfy medical liens placed on the settlement by health care providers or group insurance providers.
- To finalize the case, you will sign additional documents. Then, your lawyer will disburse the remainder of the funds to you.
If another person negligently injured you and you need answers to legal questions, contact an experienced personal injury lawyer for a free case evaluation. The amount of time it takes to settle a personal injury claim varies, but the sooner you reach out, the faster a lawyer can start fighting for your rights.