Left turn

How Does the Settlement Process Work in a Car Accident?

Being injured in a car accident can turn your life upside down in an instant. One moment you’re going about your day, and the next you’re dealing with serious injuries, mounting medical bills, lost wages from missing work, and extensive property damage to your vehicle. The physical, emotional, and financial toll can be overwhelming.

If another driver was at fault for causing the car accident, you have the right to seek compensation for your losses through a personal injury claim or lawsuit.

Most car accident cases are resolved through the car accident settlement process rather than going all the way to trial. But how exactly does the claims process for the car accident settlement work?

This comprehensive guide will walk you through all the key steps, from reviewing accident and police reports to first filing your personal injury claim to potentially negotiating a fair settlement agreement with the other driver’s insurance company.

Having a car accident lawyer familiar with personal injury law on your side can make a big difference in protecting your rights and maximizing your settlement amount for your property damage and car accident claim.

Crossen Law Firm in Indiana specializes in representing clients who have been injured in car accidents. With extensive experience in personal injury law, their team of attorneys is dedicated to helping accident victims navigate the complex legal process and obtain the compensation they deserve.

From minor fender benders to serious collisions, Crossen Law Firm has the knowledge to handle a wide range of accident cases. They understand the physical, emotional, and financial toll that car accidents can take on individuals and their families, and they work tirelessly to advocate for their clients’ rights and best interests.

If you’ve been injured in a vehicle accident in Indiana, you can trust Crossen Law Firm to provide compassionate and skilled legal representation every step of the way.

What Is a Car Accident Settlement?

A car accident settlement is a formal agreement between the injured victim (or plaintiff) and the at-fault driver’s insurance provider. In the settlement, the insurance company agrees to pay the victim a negotiated sum of money as compensation for their injuries, damages, and losses related to the accident.

By entering into a settlement agreement, victims in car accident claims release the at-fault driver, insurance company, and other parties involved from any further liability.

accept the settlement

In other words, once you accept the settlement, you cannot go back and try to seek more compensation later related to the same accident.

Most car accident claims end up settling before going to trial.

Injury victims, the person at fault, and insurance companies often prefer to settle out of court to avoid the extra time, costs, and uncertainty involved in litigation as part of the car accident settlement process.

However, settlements for car accident claims only work if the offered amount is enough to fully compensate the victim for their economic damages (e.g. medical bills, lost wages) and non-economic damages (e.g. pain and suffering).

An experienced car accident lawyer will work hard to negotiate the maximum possible settlement and seek compensation for your unique situation.

If the insurance company is unwilling to offer a fair settlement amount after negotiations, your personal injury attorney may advise filing a personal injury lawsuit and taking the case to trial instead.

Steps in the Car Accident Settlement Process

While every situation is somewhat unique, the typical car accident settlement process involves the following steps:

1. Hiring a personal injury attorney

The first step after you seek medical attention immediately at the accident scene is to consult with an experienced car accident lawyer. Personal injury attorneys handle car accident cases on a contingency basis, which means you don’t pay any upfront costs or fees.

The experienced attorney will only collect a portion of any settlement or award at the end of your case, incentivizing them to maximize your compensation.

2. Filing an insurance claim and demand letter

Your lawyer will investigate the details of your car accident, gather evidence demonstrating the other driver’s negligence (fault), including the police report and witness statements, and calculate the total damages you have suffered. This includes current and future medical expenses, lost wages, property damage, pain and suffering, and any other economic or non-economic losses.

Using the accident report and other information, your attorney will file claims or a car accident lawsuit with the insurance company of the at-fault driver and your own insurance provider (if you have applicable underinsured/uninsured motorist coverage). Part of filing the claim is sending an official demand letter requesting the insurer of the other driver pay out a specified amount to compensate you for lost income and other expenses.

3. The investigation process for the insurance company

Once your claim has been filed, the insurance company will open its own investigation.

An insurance adjuster will typically want to take your statement, review the police report and photographs, inspect vehicle damage, go over your medical records, and possibly provide expert witness statements.

The insurance company may also ask you to provide a recorded statement about how the accident happened. It’s important for car accident victims to have a lawyer present during the claims process to ensure they don’t accidentally say anything that could jeopardize their claim.

Insurance companies know how car accident settlements work and are motivated to pay out as little as possible or deny valid claims altogether.

4. Review of the initial settlement offer

After completing its investigation, the insurance company will decide if its policyholder was at fault for the accident. If so, they will likely extend an initial settlement offer to you.

But this first offer is virtually always a lowball amount that doesn’t come close to covering your full damages and losses.

Your attorney will review this first offer and advise you on whether it is reasonable or not. Accepting the insurance company’s first settlement offer is rarely a good idea unless your economic damages were very minor and circumstances were extremely straightforward.

5. Negotiating for a higher settlement agreement for car accidents

If the first offer is unacceptable, your car accident lawyer will engage in extended settlement negotiations with the car insurance company adjuster of the other driver. This will likely involve going back and forth proposing higher amounts and making additional demands.

Your attorney needs to make a strong case substantiating your damages using evidence like medical bills, proof of lost wages, and testimony from expert witnesses.

Most personal injury cases are eventually settled through this type of extended negotiation.

6. Filing a personal injury lawsuit

If all reasonable settlement negotiations fail to produce an adequate offer from the insurance company, your lawyer may recommend you file a lawsuit for your bills and medical expenses and take your case to trial.

The case will then enter a lengthy litigation process involving additional rounds of information gathering (discovery) and preparations for trial. Your personal injury lawyer will attempt to negotiate a settlement up until the trial officially starts, as it tends to be in both parties’ interests to avoid the uncertainty and costs of a trial verdict if possible.

However, the decision to accept a settlement offer or proceed to trial is ultimately up to you as the client.

An experienced attorney is there to advise you on what outcome is likely after your car crash, but you remain in control of finalizing any settlement or taking your case through trial.

7. Receiving your settlement check

When you and the insurance company do reach an agreed settlement, you’ll sign a release giving up your right to pursue any further legal action against the at-fault parties. The release will also spell out exactly how much the total settlement amount is and the terms of finalizing the agreement.

After you’ve signed the required paperwork, the insurance company of the other driver will issue your settlement in the form of a lump sum payment or structured settlement payout broken into installments.

Your car accident lawyer will also take their agreed-upon contingency fee out of the final settlement amount once it is disbursed.

What Damages Are Covered by Car Accident Settlements?

The goal of any car accident settlement agreement is to compensate you (the car accident victim) completely for all the losses and damages you’ve suffered as a result of your injuries after car accidents.

An experienced car accident attorney will demand an auto accident settlement amount for your car accident claim covering all potential economic and non-economic damages, such as:

  • Past, current, and future estimated medical expenses related to treating your injuries. These include ambulance fees, emergency room costs, hospital stays, doctor visits, medications, physical therapy, medical equipment, in-home care services, and other injury-related treatments you’ve incurred or expect to need. 
  • Income lost due to being unable to work immediately after the accident, as well as any diminished future earning capacity because of long-term injuries or disabilities.
  • Property damage costs for repairing or replacing your vehicle damaged in the crash.
  • General pain and suffering damages from the physical pain, emotional trauma, and diminished quality of life caused by permanent debilities, disfigurements, or scarring.
  • Other out-of-pocket expenses related to the accident, such as costs of hiring in-home assistance for household chores like cleaning, transportation fees, or childcare services you’ve needed while recovering.

In exceptional cases, you may also be eligible for other damages like loss of consortium (damage to your spousal relationship) or punitive damages meant to punish the at-fault party and have them pay compensation for egregious negligence or intentional harmful acts.

Factors That Impact Car Accident Settlements

Several factors influence the potential value of a settlement in any given car accident claim. In general, more severe injuries resulting in higher economic damages and significant non-economic damages tend to lead to higher settlement amounts.

Cases with “clear liability” where the other driver was definitively at fault for the accident also have higher values.

Other key factors that impact settlements include:

  • The extent and severity of injuries suffered by the victim (e.g. brain trauma, spinal cord injuries, permanent disabilities, etc.)
  • Strength of evidence and documentation proving the other driver’s negligence directly caused the accident
  • Potential for the victim’s “contributory negligence” having partly caused the crash, which could reduce their settlement by their percentage of fault 
  • Estimated costs of future ongoing medical care and long-term disability accommodations the victim will need
  • Policy limits of the at-fault driver’s insurance coverage and ability to pay a judgment exceeding those limits
  • Credibility and likability of all parties involved if the case proceeds to a trial setting

The skill of your car accident lawyer also play a crucial role in negotiating for the maximum possible settlement. An attorney who routinely handles car accident cases will know how to accurately calculate all past and future damages and leverage the strongest evidence to your advantage.

How Long Does the Settlement Process Take After a Car Accident?

The timeline for resolving a car accident case through settlement can vary significantly based on its specific circumstances. However, you can typically expect the settlement process to take anywhere from 6 months to a few years in more complex cases.

As a rough overview, a basic timeline might look like:

2-4 weeks

Your attorney investigates the accident, obtains necessary evidence like the police report and your medical records, and files the initial insurance claim.

1-2 months

The insurance company conducts its own investigation and responds with an initial settlement offer after finding their policyholder was liable. This first offer is often very low.

2-6 months

Your lawyer engages in extended negotiations with the insurance company to reach a fair settlement that accounts for all your damages. This back-and-forth negotiating process can take several months.

6 months – 1 year

If negotiations are unsuccessful, your attorney will likely file a lawsuit, which can add 6 months or more before the case is ready for trial.

1-2 years

1-2 year trial

If the case proceeds to trial, it may take 1-2 years or more from the initial accident date before a settlement is reached or a verdict is rendered. Appeals can add further time.

Factors that can extend this general timeline include: severity of injuries, difficulty proving fault, amount of resistance from the insurance company, need for extended medical treatment and disability accommodations, and court scheduling backlogs.

Having an accident attorney on your side helps move the process along as efficiently as possible and maximize the chances of reaching a favorable settlement without unnecessary delays.

Why Do I Need a Lawyer for a Car Accident Settlement?

While you are not legally required to have a lawyer handle your car accident settlement, it’s highly advisable for several key reasons:

Personal Injury Knowledge

Reputable car accident lawyers understand how to accurately calculate damages, build a strong case proving liability, and negotiate with insurance companies from a position of leverage. This experience directly translates to higher settlement amounts for victims.

Relief From Stress and Burdens

Dealing with a car accident claim on your own while also recovering from injuries is extremely challenging. Your lawyer handles all the legal processes, paperwork, negotiations, and case preparations for you.

Contingency Fee Structure

Since car accident lawyers work on contingency fees, you don’t pay anything upfront. The only way they get paid is by obtaining a settlement for you, incentivizing them to maximize your results.

Objective Guidance

Lawyers provide impartial counsel on whether settlement offers are truly fair and reasonable based on their expertise. They ensure you don’t settle for less than your case’s full value.

Ability to Take Your Case to Trial

Should the insurance company refuse to negotiate in good faith, your attorney prepares and takes your case all the way to a civil court trial to seek appropriate damages.

Overall, the costs associated with hiring a car accident attorney are dwarfed by the significant increase in your net settlement amount compared to representing yourself.

Get Help from an Experienced Car Accident Lawyer

Being injured in a vehicle accident can be traumatic and life-altering. You need professional legal representation looking out for your best interests through every stage of the insurance claims process and negotiations after an accident occurred.

At Crossen Law Firm, our seasoned team of car accident attorneys have decades of combined experience skillfully pursuing maximum compensation for clients injured by negligent drivers.

We understand the car accident settlement process and the physical, emotional, and financial hardships you’re dealing with. Our mission is to remove that burden from your shoulders while tenaciously fighting for the maximum possible settlement on your behalf.

As the injured party, don’t get stuck settling for less than you deserve for your car accident claim after a debilitating accident. Our auto accident lawyers provide a free case evaluation to review your case and explain all your legal options for seeking fair compensation.

Contact us at 317-401-8626 or online to get started with our personal injury lawyers.