Will My Car Accident Claim End in a Settlement? (2023)

If you decide to start a car accident lawsuit, chances are you’ll never get to court, but that’s not necessarily a bad thing.

According to the Bureau of Justice Statistics, 96% of personal injury lawsuits (also called "torts") reached a settlement in state courts in 2005. A lot of personal injury lawsuits are car accident lawsuits. So, why do most car accident cases settle? In this article we'll answer questions like:

  • What are the advantages of settling a car accident claim?
  • How does the settlement process work?
  • How much is a car accident claim worth?
  • How long do car accident cases take to settle?

Why Insurance Companies Want to Settle

In a car accident lawsuit, an injured person (called the "plaintiff") sues the person who caused the plaintiff harm (called the "defendant") for money damages. In most cases, it's the defendant's car insurance company, not the defendant, who ends up footing the bill for the plaintiff's damages.

Car insurance companies often make quick settlement offers. Quick settlements save insurance companies work and money. Plaintiffs who accept quick settlements and sign "releases," giving up their right to sue, might not get the full value of their claim because they don't yet understand the full extent of their injuries.

If you've been injured in a car accident, you should talk to a lawyer before you accept a quick settlement offer from the defendant's insurer. A lawyer can explain why it's important for you to reach "maximum medical improvement" before accepting an offer or reassure you that the settlement offer is fair.

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Learn more about the role of insurance in a car accident case.

Settlements Avoid the Unpredictability of Trial

Car accident trials are unpredictable. You might think proving fault (legal liability) for the accident will be easy, but witnesses might not seem as credible on the stand as they did at the scene or the judge might not let your accident reconstruction expert testify.

Proving damages is even more unpredictable than proving fault. Insurance companies fear that a jury will award sympathetic plaintiffs much higher damages (more money) than their case is worth. Plaintiffs fear that they will get less than what the settlement offer was and have to shell out more in litigation expenses and attorneys' fees.

Plaintiffs and defendants (and their lawyers and insurers) settle over 90% of cases to avoid unexpected results and control their risks. In most cases, especially when liability and damages are pretty clear-cut, there is no need to roll the dice and pay for an expensive trial.

Settlements Cost Less Than Trials

Litigation is expensive. Cases can go on for years and the costs can really add up. In addition to paying attorneys' fees, plaintiffs and defendants (or, more likely, their insurers) have to pay for things like court costs, depositions, expert witness fees, and travel expenses.

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Learn more about the cost of taking your personal injury case to court.

Plaintiffs Who Settle Get Paid Faster

Plaintiffs might not have time to wait for the litigation process to play out. Plaintiffs, particularly seriously injured ones, often have medical bills piling up and lost income. The sooner the case settles, the sooner plaintiffs can get out of potentially crushing debt and move on with their lives.

Collecting a settlement is often easier (and more certain) than collecting a judgment after trial. After settling a car accident case, you'll probably just need to wait for the check to come in the mail or get automatically deposited in your account. If you go to trial and win, the defendant might appeal and it might take a year or more for the appeal to be decided. If the amount of the judgment exceeds the defendant's insurance coverage and the defendant has limited assets, you might not be able to collect at all.

The Role of Attorneys in Settlements

Most attorneys for plaintiffs get paid through a contingency fee agreement. The most common arrangement is for the attorney to get around 33% of any pre-trial settlement and 40% or more after trial begins. The sooner the case settles, the sooner the plaintiff's attorney gets paid. Overall, a quicker settlement is usually more profitable for a plaintiff's attorney because trials and pre-trial preparation require so much time with no guarantee of a better outcome.

From a practical perspective, law offices aren't set up for every case to go to trial. Attorneys typically juggle dozens of cases at once. If every single case went to trial, lawyers wouldn't have enough hours in the day to fully work up each case. The criminal justice system is similar. If most criminal cases didn't end with a plea bargain, the system would collapse under its own weight.

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The Car Accident Settlement Process

If you are injured in a car accident, you have a right to be compensated for your injuries. After you start a car accident claim, you'll want to:

  • get necessary medical care
  • gather evidence
  • calculate your settlement value, and
  • write an effective demand letter.

You might receive a settlement offer pretty quickly or you might need to negotiate for a better settlement. If you have questions about the settlement process and the value of your claim, talk to a lawyer before you accept an offer. Learn more about how an attorney can help with your car accident claim.

How to Respond to a Low Settlement Offer

It's pretty common for insurance adjusters to start negotiations with a very low settlement offer. Like a bargain shopper at a flea market, most adjusters will try to get a sense of whether you know how much your claim is worth.

If the offer is unreasonably low, ask the adjuster to give you specific reasons why the offer is so low. Then respond to each reason in a letter. If the adjuster has some valid points, you can lower your demand, but not until the adjuster responds to your letter.

If the offer is low but reasonable, you can make a counteroffer right away. A little more bargaining should help you quickly settle your car accident claim.

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Average Car Accident Settlement: How Much Is Your Car Accident Claim Worth?

No two car accident claims are exactly the same so there is no way to know what the value of your claim will be or how long the settlement process will take. Liability insurance typically pays for injuries and property damage caused by the policyholder. According to Insurance Information Institute statistics, the average car accident liability claim in 2020 was $20,235 for bodily injury and $4,711 for property damage.

Martindale-Nolo surveyed readers across the United States about their experiences with car accident claims from 2015 through 2020. The overall average settlement award was $23,900, but most readers received less than $10,000. More than a third of readers (35%) received $5,000 or less, while just under a quarter (23%) received $20,000 or more. Readers who suffered injuries received an average award of $29,700, while the average for those who had no injuries was $16,700.

Notably, nearly all readers received their money as part of a settlement (98%) and not as a court award after trial. Legal representation vastly improved the outcome of readers' claims. The average payout for readers without lawyers was $13,900, while the average payout for readers with lawyers was $44,600.

Average Auto Accident Settlement Timeline: How Long Will Your Car Accident Claim Take to Settle?

Most cases resolve pretty quickly. In the same Martindale-Nolo survey, more than half of the readers surveyed (56%) resolved their personal injury claims within six months after their car accident. The average time it took to receive a car accident settlement was just under a year (10.7 months).

Faster isn't always better. Readers who sent demand letters and negotiated their claims took longer on average to reach a settlement (17 months) than those who didn't (8.8 months), but received average settlements that were nearly twice as high. Factors like having an attorney and having injuries can also extend the time it takes to reach a settlement, but tend to lead to higher payouts.

(Video) How Car Accident Settlements Work


How long do most car accident settlements take? ›

How long does it take to get a settlement check from a car accident? This depends on the facts of your case, but in general, anywhere between 9-18 months.

How long does a compensation claim take to settle? ›

As a very rough guide, a claim may take 6 to 12 months if liability is accepted by the treatment or care provider immediately. If liability is disputed, it could take 12 to 18 months for more complicated claims. Very complex cases can take significantly longer.

Is it good to settle a claim? ›

One of the biggest advantages of settling an injury claim is you and your attorney are in control of negotiations. If you do not like an offer from the insurance company, you can reject it and make a counteroffer. You can go back and forth with the insurance company until you reach an agreement.

How does the settlement process work? ›

A settlement agreement works by the parties coming to terms on a resolution of the case. The parties agree on exactly what the outcome is going to be. They put the agreement in writing, and both parties sign it. Then, the settlement agreement has the same effect as though the jury decided the case with that outcome.

What is a good settlement offer for a car accident? ›

A good car accident settlement offer is one that fully covers your medical expenses, property damage, and time off from work. It compensates you adequately for the pain and trauma you have experienced related to the accident. A skilled attorney can evaluate your settlement offer and advise you if it is reasonable.

How long does it take for a settlement in the insurance company? ›

The amount of time it takes to settle an insurance claim for a car accident varies, anywhere from a few days/weeks to several months.

What happens after a claim is settled? ›

After a case is settled, meaning that the case did not go to trial, the attorneys receive the settlement funds, prepare a final closing statement, and give the money to their clients.

How much compensation do you get for whiplash? ›

The amount of compensation you can claim for whiplash range from £240 up to £4,215, depending on the length of time you suffer from your injuries. As of June 2021, the amount of compensation you may be able to claim for whiplash injuries has changed.

Should I accept the first offer of compensation? ›

you don't have to accept any offer that's made to you. If you do accept an offer it might be lower than the compensation you would have got if you'd used a solicitor or gone to court instead. don't feel under any pressure to make a decision quickly.

Do insurance companies prefer to settle? ›

Most of the time, insurance companies will try to settle accident claims outside of court. Lawsuits are lengthy and expensive. An insurance company knows it's likely to pay less by settling outside of court. After you file a claim, the insurance company might respond quickly.

Is it better to settle or go to trial? ›

Your litigation can end within a few months if you settle out of court, and it is much less stressful. A guaranteed outcome. Going to trial means there is no certainty you will win, but when you settle, you are guaranteed compensation for your injuries.

Do insurance companies always offer a settlement? ›

Insurance companies exist to protect their policyholders by paying claims against them. Unless the insurance representative has a solid reason not to pay the claim, you can almost always expect a settlement offer after filing a claim with an insurance company.

What to do with a $100,000 settlement? ›

8 Smart Things to Do With Your Settlement Money
  • Understand the Tax Implications. ...
  • Get a Good Financial Advisor. ...
  • Pay Off Debt and Save. ...
  • Invest in Education. ...
  • Invest in Your Home. ...
  • Donate to Charity. ...
  • Invest in Business, Friends, or Family. ...
  • Enjoy Yourself!

How do lawyers get paid from a settlement? ›

After a final settlement amount is reached in a case, the check will typically be sent to the lawyer on record for the plaintiff. The money will then usually be held in a trust or escrow account until it can be cleared by the banks, which usually takes three to ten business days for a larger sum.

What to expect on settlement? ›

What happens on settlement day? On settlement day, at an agreed time and place, your settlement agent (solicitor or conveyancer) meets with your lender and the seller's representatives to exchange documents. They organise for the balance of the purchase price to be paid to the seller.

How much can you get out of pain and suffering? ›

They usually offer ½ to 1 times your economic damages (medical bills and loss of income) to compensate for your pain and suffering. For example, if your medical bills and loss of income equal $10,000, the insurance company will try to offer up to $5,000-$10,000 for your pain and suffering.

How much should I ask for a settlement? ›

A general rule is 75% to 100% higher than what you would actually be satisfied with. For example, if you think your claim is worth between $1,500 and $2,000, make your first demand for $3,000 or $4,000. If you think your claim is worth $4,000 to $5,000, make your first demand for $8,000 or $10,000.

How do you respond to a low settlement offer? ›

Steps to Follow in Responding to a Low Settlement Offer
  1. Remain Calm and Polite. In most cases, receiving a low offer can instigate emotional reactions. ...
  2. Table Your Questions. ...
  3. Give All the Facts. ...
  4. Develop a Counter Offer. ...
  5. Respond in Writing. ...
  6. Only Settle When Fully Healed.
Sep 10, 2021

When an insurance company won't settle? ›

When an insurance company refuses to settle, it may be liable for the full amount of the excess judgment after trial, notwithstanding the lower policy limits. This duty of good faith aligns the insurance company's incentives with those of its insured.

What does it mean when an insurance company offers a settlement? ›

A settlement agreement includes releasing all liability for claims against the party who caused your accident. The insurance company is not responsible for anything else after you sign. No matter what happens, you cannot ask for more money in the future, and you cannot take the case to court.

How do insurance companies pay out claims? ›

Once the insurance company sends an adjuster and evaluates the damage to your home, they'll pay a settlement amount in either replacement cost or actual cash value. Replacement cost gives you funds to cover the costs to rebuild your home or repair damages using similar materials.

How do you know if a claim is settled? ›

Once your claim is settled, your insurance company will write to you to let you know. You will also be able to find this information on the renewal notice issued after the claim was settled. Alternatively, you can contact your previous insurer directly.

How is a claim settled? ›

Settling a claim means a complete resolution of the case. It fully ends and resolves all issues that relate to the case. Both parties have the right to have a judge or jury decide the case. However, when you settle, you and the other party agree on what the resolution is going to be.

How much compensation for anxiety after car accident? ›

There is no set compensation payout that's awarded for a personal injury, including anxiety. Instead, compensation is calculated based on the type of injury and how severe it is, and the impact on the claimant's life. Also taken into account is if the injury has cost you financially.

What is Grade 3 whiplash? ›

Grade III: Neck complaint AND neurological sign(s). Neurological signs include decreased range of motion and point tenderness. Grade IV: Neck complaint AND fracture or dislocation.

Who pays out for whiplash? ›

If you get whiplash after being in an accident that wasn't your fault, either as a driver or a passenger, you can make a whiplash claim on the at-fault driver's insurance. You can do this directly or via a 'no win, no fee' legal firm. This means they'll only take a cut of the money if you're successful.

How much can I claim for stress and inconvenience? ›

There is no hard and fast rule in respect of how much will be paid for distress and inconvenience claims. The level of damages awarded by the court is generally determined by the specific incident circumstances, the extent of inconvenience suffered by the policyholder and the duration of the inconvenience.

How long do whiplash claims take? ›

How long will a whiplash claim take? Most whiplash claims are settled within a 6 month period, however this is dependent upon a number of different factors including: Liability being accepted by the third party insurers. The medical prognosis and expected recovery time.

Can you reject a injury settlement offer? ›

An offer cannot be altered or withdrawn during the Relevant Period unless the court gives permission. If you believe that the offer compensates you for your injuries and losses, you can accept the offer.

How are most insurance claims settled? ›

Typically, this happens after negotiations between the parties prove successful, and the parties (and their insurance companies) agree on an amount that will compensate the victim for their damages. A settlement can also happen during alternative dispute resolution methods, such as mediation.

How can I maximize my insurance settlement? ›

Let's look at how to best position your claim for success.
  1. Have a Settlement Amount in Mind. ...
  2. Do Not Jump at a First Offer. ...
  3. Get the Adjuster to Justify a Low Offer. ...
  4. Emphasize Emotional Points. ...
  5. Put the Settlement in Writing. ...
  6. More Information About Negotiating Your Personal Injury Claim.

Which insurance is best in claim settlement? ›

Max Life Insurance has the highest claim settlement ratio in terms of the number of claims with 99.34 per cent for the year 2021-22. With a 99.09 per cent death settlement ratio, Exide Life insurance and Bharti Axa Life Insurance bagged the second position.

Why do people settle instead of going to court? ›

Settlement Is Faster and Cheaper for Everyone

Even if they are relatively simple, court trials usually take several months to resolve from start to finish. Not only does this take extra time, but it also costs you more money in legal fees.

Why would you try to negotiate a settlement instead of going to court? ›

Settlement has many advantages over going to trial: It can resolve your dispute faster, especially in cases where you agree about most things. It may cost you less, for example, in court fees or pay lost during time off work for court dates.

Why do people settle before trial? ›

Most civil cases are settled out of court because both parties realize that it is the most efficient way to resolve the dispute. Out-of-court settlements also avoid the risk of an unfavorable verdict from a jury or judge and reputational damage.

Why is the first settlement offer so low? ›

When the insurance company thinks the victim is partially at fault or that he or she does not have a strong case, they may be more likely to make a lowball offer. The insurance company does not feel much pressure if they think you have a weak case.

Can you settle an insurance claim without a lawyer? ›

While it is possible to represent yourself in court and settle a car accident claim without hiring a car accident lawyer, it's not the best idea. Attorneys have extensive experience helping clients get the money they deserve. Even better, they can streamline the settlement process so you get your money more quickly.

Why do insurance companies delay settlements? ›

Generally, the money an insurance company receives in premiums goes into investment accounts that generate interest. The insurance company retains this money until the time they pay out to a policyholder, so an insurance company may delay a payout to secure as much interest revenue as possible.

Will a bank cash a large settlement check? ›

Cashing in Your Settlement Check With Your Bank

You can cash in your personal injury settlement check at your own bank. However, you may not be able to access the full amount immediately, especially if you received a large settlement check.

Do you have to pay taxes in a settlement? ›

The general rule regarding taxability of amounts received from settlement of lawsuits and other legal remedies is Internal Revenue Code (IRC) Section 61. This section states all income is taxable from whatever source derived, unless exempted by another section of the code.

What is considered a good settlement? ›

A good settlement offer should not only be able to cover your hospital bills and legal fees, but it should also be equivalent to close to a years' worth of your current wages, especially in cases where your injuries may be permanent or cause some kind of disability.

How long after settlement do I get the money? ›

At settlement, your lender will disburse funds for your home loan and you'll receive the keys to your home. Generally, settlement takes place around 6 weeks after contracts are exchanged.

What's the most a lawyer can take from settlement? ›

Usually, a personal injury lawyer will take one-third of your final settlement offer as compensation for their work. For example, a settlement of $10,000 would result in a $3,333 payment to your lawyer and $6,667 for you to take home. Lawyers who work on contingency only get paid if they win you money.

What do lawyers do on settlement day? ›

What happens on settlement day?
  • Your lawyer or conveyancer will pay for the property (using the authority you signed a few days earlier). ...
  • When this is completed, your lawyer or conveyancer will tell you the sale has gone through and you can collect the keys from the seller's lawyer or conveyancer or from the agent.

Is a settlement paid full? ›

Settled in Full Definition

If you do go through the process of a settlement and complete your agreed-upon payments, your account will be considered settled in full – or sometimes "paid-settled" – by your creditor and the credit bureaus.

How many weeks to get settlement check? ›

Once a settlement has been determined, the victim can expect to receive their settlement check in about six weeks. Some exceptions to the rule exist, and delays can happen.

What is an acceptable settlement offer? ›

What percentage should I offer a full and final settlement? It depends on what you can afford, but you should offer equal amounts to each creditor as a full and final settlement. For example, if the lump sum you have is 75% of your total debt, you should offer each creditor 75% of the amount you owe them.

What is the average settlement for a car accident in Pennsylvania? ›

According to the Insurance Information Institute (III), the average value of a bodily injury auto insurance claim was $22,734 in 2021. The average value of a property damage claim was $5,314.

How much to expect from car accident settlement California? ›

Average Car Accident Settlement Amounts Received in California. According to settlement data from across the United States, most reported cases generally settle for between $14,321 and $28,215. The average is around $21,000.

What happens if someone sues you for more than your insurance covers? ›

If the courts decide that you need to pay for the damage or injury you've caused, your insurer will pay the sums claimed by the person suing you. However, if the sums are greater than the coverage in your policy, you will need to cover the difference from your own pocket.

How long does an insurance company have to settle a claim in Georgia? ›

The total time the insurer has to accept or deny liability shall not exceed 60 days from the company being notified of the claim, unless the company has documented the claim file where information that has been requested necessary to determine liability has not been submitted.

How to calculate for a fair settlement on an auto accident? ›

What is the Auto Accident Settlement Formula? The general formula most insurers use to measure settlement worth is the following: (Special damages x multiplier reflecting general damages) + lost wages = settlement amount.

What is the average pain and suffering settlement in PA? ›

There is no actual “average” amount awarded for pain and suffering. Most pain and suffering awards fall somewhere below $15,000 because most claims involve small injuries.

How much are most personal injury settlements? ›

How Much Compensation Is Typical in Personal Injury Cases?
  • Half of all plaintiffs received $24,000 or less.
  • The median award was $31,000 for all cases studied.
  • The median amount awarded in auto accident cases was $16,000.
Sep 22, 2022

How much can you get for pain and suffering from a car accident in California? ›

In California, there is no cap on pain and suffering unless the case involves medical malpractice. In malpractice cases, you can only demand $250,000 in pain and suffering unless your Orange County car accident lawyer can show intent or gross negligence.

How is vehicle settlement calculated? ›

The settlement on these agreements is the sum of the outstanding capital balance plus daily interest, as well as an early termination fee which is based on three months' interest.

What is the average payout for whiplash in California? ›

Average Settlement For Back And Neck Injuries In A California Car Crash. The average settlement for a minor back or neck injury is between $2,500 and $8,000. If physical therapy, injections, or other forms of treatment are required the settlement may be higher and range from $20,000 - $40,000.

What is the maximum amount that an insurance is liable to pay as a claim? ›

25,000 per person in addition to reimbursement of medical expenses if any, incurred on the victim up to a maximum of Rs. 12,500.

How do you stop someone from suing you? ›

Ten common sense ways to avoid being sued
  1. Maintain good communications. ...
  2. Avoid giving false expectations. ...
  3. Make the client make the hard decisions. ...
  4. Document your advice and the client's decisions. ...
  5. Don't initiate hostilities against the client. ...
  6. Avoid, or handle with care, the borderline personality client.

Can I get more money than the insurance policy? ›

Unfortunately, you cannot make an insurance company pay beyond its policy limit. You do, however, have the right to sue the at-fault driver for more than the value of his or her insurance policy. This would mean directly filing a lawsuit directly against the driver who caused the accident and not the insurer.

Can you claim for anxiety after a car accident? ›

If you were involved in a car accident that was not your fault, you may be eligible to claim compensation for all injuries, physical as well as mental. This includes anxiety.

How long does an insurance company have to settle a total loss claim? ›

Total loss claim – this means your car isn't repairable (also known as a write-off). At this point, your insurer will agree a settlement figure with you which is likely to be agreed within 30 days, once your insurer has assessed the car and agreed it is a write off.


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