Car accident settlement – How it works & potential pitfalls

Insurance company strategies to avoid paying car accident settlement

Insurance company strategy #1 – Low settlements

Insurance companies who defend car accident cases, against those injured in car accidents, frequently will try to settle a case for pennies on the dollar (before the injured victim gets an attorney). Please remember that insurance companies do not have your best interests in mind when they offer you a token settlement at the start of your case. Most people do not even know the extent of their injuries when first injured in a car accident, but the at-fault driver’s insurance company may offer you $500 or $1,000 on the day of the accident! Why? These carriers offer a small settlement in the hopes that you will take it and not hire a lawyer who specializes in personal injury cases. The insurance companies play a numbers game. The more quick and low settlements that they can resolve immediately, the better profit they can make as an insurance company. They also know that once an injured victim hires an attorney, the value of the case can go way up.

Insurance company strategy #2 – Downplay your injuries

It basically comes down to money and profit from the standpoint of the insurance companies. Insurance companies do not believe in you and do not believe in your injuries. They all believe that the majority of those people injured in car accidents are merely making a claim for the money and not because they are seriously injured. Every case comes down to money and how much money can they save per claim. That is why it is extremely important that if you are injured in a car accident, hire an attorney immediately to guide you through this process. Without an attorney, the insurance companies will and are trained to take advantage of you.

Insurance company strategy #3 – Signing a release

Once you settle your case for pennies on the dollar, or for a small amount and sign a Release, your case is over forever. Most insurance companies will not even tell you that this small payment will forever release all your injury claims for now and in the future. So, if you end up needing back or neck surgery 6 months in the future, your case is over and you will have to pay for that surgery out of your own pocket! Thus, it is crucial that one does not settle their case without the advice of an attorney like myself who specializes in car accident cases. I know the value of different injuries and I know how to advise clients on what settlement offers to make and what offers from the insurance carriers should be declined.

Insurance company strategy #4 – Filing a lawsuit in a conservative city

Many times, in their efforts to save money, insurance companies will offer low settlements despite serious injuries. What do you do in this situation? Unfortunately, when insurance companies fail to properly offer what your case is worth, then a lawsuit must be filed. A lawsuit can be filed where the accident happened or where the defendant resides. Thus, if a defendant driver resides in Denver but the accident happened in Colorado Springs, you have the choice to file your lawsuit in Denver or Colorado Springs. Colorado Springs has been traditionally a very conservative community but that is slowly changing. Colorado Springs has been notorious for lower jury verdicts than places like Denver and Boulder which are more liberal jurisdictions and have a jury pool that hands down higher jury verdicts. In my opinion, if you can avoid filing a lawsuit in Colorado Springs, you should, since there are more liberal counties to file lawsuits.

Process of a car accident settlement

Settling without litigation

Of course, most cases settle before a Trial occurs. It is estimated that close to 95% of all personal injury and car accident lawsuits settle prior to the picking of a jury. In other words, the chances of your case going through an actual jury trial are slim at best. There are many opportunities to settle your case throughout the litigation process.

File a complaint

Once a Complaint is filed in District Court, an Answer is filed by the defendant driver’s attorney. The defendant driver’s attorney is hired by the driver’s insurance company and paid by the driver’s insurance company.

Discovery

After an Answer is filed, discovery takes place and each side gets to “discover” the other side’s facts and reasons for their claims and defenses.

Mediation

Normally, the Judge in each case will order both sides to attend a Mediation which provides another opportunity to present your case to a Mediator. A Mediator is usually a retired Judge and he can offer his advice and suggestions while trying to get the case settled that very day.

Trial

If the case does not settle at Mediation, then the case will proceed towards trial.

Insurance coverage limits in car accident settlements

A car accident settlement is also limited to what the at-fault driver carries in bodily injury liability coverage. In Colorado, every driver is required to carry a minimum of $25,000 in bodily injury liability coverage. So this is usually the maximum amount of money that you can recover from the at-fault driver’s insurance company. For example, let’s say that another driver slams into the rear of your car while you are stopped at a stoplight. Maybe the other driver was texting and did not notice that you were stopped. This driver carries only $25,000 in BI coverage with Geico. Thus, now matter how seriously you are injured and say you have incurred $40,000 in medical bills, you can only get the $25,000 in BI coverage from Geico. That is your settlement limit.

This may seem unfair to a lot of people. But, this is why I always recommend that everyone carry underinsured/uninsured motorist coverage. It costs a little more, but if you have this UIM/UM coverage and are injured by a driver who has the minimum state coverage ($25,000), then you can recover more money for your case by adding on the UIM coverage from your own insurance company. For example, let’s say you are one of the prepared drivers out there and had a wise insurance agent who talked you into purchasing $100,000 in UIM/UM coverage. In this instance, you would be able to settle with the other driver for $25,000 and then make a settlement demand to your own insurance carrier for the $100,000 (if your injuries are worth that much, of course). If your injuries are very minor and are not worth more than $25,000, then you would not be able to pursue a claim under your own UIM/UM coverage.

Hire an attorney to help

As you can see, there are many hidden pitfalls and scenarios in settling a car accident case. There are so many different examples of what can happen in these type of cases that you need the advice of an experienced personal injury attorney. I specialize in car accident cases and have done so for more than 10 years. I can properly advise you on the correct and fair settlement in each particular car accident case. Do not settle your case without the help of an attorney or the insurance adjusters will take advantage of you and you will not even realize it in many circumstances. God bless and be safe out there! Contact me now.

A personal injury lawyer with over 10 years of experience, Ryan Malnar serves Colorado Springs with honesty & integrity.