Personal Injury Insurance Claim Settlements: What to Know About it

Car accidents sometimes cause bodily injury to others. Those who are injured in car accidents in which others are at fault can file a lawsuit against those at fault or defendants. However, defendants can offer personal injury insurance claim settlements before it happens.

Offering personal injury insurance claim settlements before the lawsuit allows the defendants to save money on defense costs. On the other hand, receiving settlements is sometimes more beneficial for plaintiffs because they can get compensation without spending money on a lawsuit.

What is a Personal Injury Settlement


A personal injury settlement is a resolution between the disputing parties before or after the lawsuit. In the case of a car accident, the disputing parties are the plaintiffs (victims) and the defendants (the insurers of the guilty party).

A personal injury settlement also means an agreement in which the injured persons agree to receive monetary compensation in exchange for terminating a claim for damages against the guilty party. Insurance companies will offer a certain amount of money during the process of settling settlements.

The plaintiffs have the right to reject this offer and ask for a larger compensation. Moreover, plaintiffs must sign a release when they and the insurers reach a personal injury insurance claim settlement agreement. It is a legal document that releases the plaintiffs’ claim against the guilty party.

Types of Personal Injury Insurance Claim Settlements


Companies generally offer two types of personal injury insurance claim settlements. They are:

1. Structured Settlements

Structured settlements provide plaintiffs with periodic installments of income-tax-free payments over a particular period. It can be months to years.

2. Lump-Sum Settlements

Lump-sum settlements present monetary compensation all at once for plaintiffs. This settlement type is the simplest method to pay and accept damages because it fulfills the insurers’ obligation to pay the plaintiffs in one go.

Why do Insurers Offer Personal Injury Insurance Claim Settlements


Insurance companies often offer personal injury settlements when their clients are clearly at fault. They are willing to provide personal injury insurance claim settlements because:

1. Settlement is Private

The lousy publication will negatively affect the reputation of insurance companies. Due to the lousy publication, the public will no longer trust them. Therefore, insurance companies often give personal injury insurance claim settlements than having a lawsuit.

Settlement is private. Moreover, the release often demands the plaintiffs not to tell others, except their lawyers and immediate family. As a result, insurance companies will not get bad publicity.

2. Settlement Allows for Risk Control and Cost Control

The result of a trial is uncertain. It makes insurance companies nervous. There is always a risk that the court mandates them to pay higher compensation than they expect.

To avoid this risk, insurance companies prefer to give personal injury insurance claim because they allow the companies to have better risk control and cost control.

Why Plaintiffs Must Choose Personal Injury Insurance Claim Settlements Over Lawsuits


There is no guarantee that the court will grant victory to plaintiffs. Inadequate evidence will cause them to lose the court battle. Consequently, they cannot get the monetary compensation they hope for. To avoid this uncertainty, plaintiffs must accept the offer of personal injury insurance claim.

Below are a couple of reasons why accepting personal injury settlements is a better option than filing for a lawsuit.

1. Settlement is a Guaranteed Victory to the Plaintiff

Accepting a settlement means that the plaintiffs do not need to worry about a court battle and who will win. A settlement is a guaranteed victory for them because they get monetary compensation from the settlements without spending their money on a court battle.

2. Settlement Enables the Plaintiff to Move On

Plaintiffs who accept a settlement can move on quicker. By taking personal injury insurance claim settlements, they do not need to spend their energy on a court battle. Consequently, they can focus more on their recovery.

Damages and Calculation


The victims or plaintiffs may be eligible for two types of damages, i.e., general damages and special damages. The damages will affect the calculation of the personal injury insurance claim settlements amount.

1. Damages that Affect the Personal Injury Settlement Amount

Insurance companies will calculate the compensation based on various damages. Some of them are property damage, lost wages, lost income opportunities, and medical expenses. These damages are examples of special damages.

In addition, the insurance companies will also calculate the compensation amount for loss of life enjoyment, pain and suffering, disfigurement, lost companionship, and other general damages.

2. How to Calculate the Compensation

The calculation of the compensation also depends on the severity of the damages. Plaintiffs who suffer long-term disability will get higher compensation for lost wages. Severe injury will also give plaintiffs higher compensation for medical treatment and pain and suffering.

On the other hand, plaintiffs may need to calculate the compensation they need on their own. This calculation is handy during the negotiation of personal injury insurance claim settlements.

To calculate the compensation they want, plaintiffs can ask for the assistance of an attorney. An attorney will help them calculate the amount of lost wages compensation and other damages.

In addition, he will perform the negotiation and make sure that his clients get a fair amount of monetary compensation.

How to File Personal Injury Insurance


Plaintiffs or victims can file for personal injury insurance claim settlements to the insurance companies of the at-fault drivers. In filing the claim, plaintiffs can follow these steps.

  • Collect information, such as location, time and date, and injuries sustained, needed to file the claim.
  • Submit the personal injury claim to the insurance companies. Plaintiffs must do it as soon as possible; within 24 hours of the accident if possible.
  • Plaintiffs must submit a demand letter when the insurance companies’ adjusters send them a Reservation of Rights letter. The demand letter must contain the details of the accident, medical treatment costs, lost wages, property damages, etc.
  • Review the insurance companies’ compensation offers.
  • Negotiate the offer by making a counteroffer.

A car accident often causes the other party to suffer from injuries and other damages. To prevent the victim of this accident from filing for a lawsuit toward the driver at fault, defendants must offer personal injury insurance claim settlements

The settlements can save the defendants from bad publication and defense costs. Moreover, the settlements also ensure the plaintiffs get monetary compensation for the damages they suffer without getting through a court battle.