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Depending on the extent of damages, after a car accident you might find yourself asking how the auto accident settlement process works. After all, having confidence in your ability to navigate the process depends on your ability to make sense of it. This guide will walk you through the typical auto accident settlement timeline, addressing important considerations along the way.

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Considerations Before Beginning The Car Accident Settlement Process

Your State's Accident Liability System

Whether you live in an at-fault or no-fault liability state will shape the process for you because this will define your choices from the outset, as follows:

  • At-Fault Liability: In these states, insurance coverage is based on the traditional approach that the person who caused the accident is responsible for the damages.
  • No-Fault Liability: In these states, drivers can collect economic damages such as medical expenses and lost wages regardless of who caused the collision. In other words, you have the option of seeking a car accident settlement payout from your insurance company up to the policy limit rather than suing the at-fault party.

Although you can always file a claim with your insurance provider under both systems, whether you opt to do so, and which claim you file, is in part determined by the at-fault or no-fault liability options used in your state.

Possible Types Of Insurance Claims

To understand how auto accident settlements work, you have to know what type of claim to file. Depending on your chosen policy elections, and what happened in the accident, you might have recourse to file under one or many of these choices:

  • Personal Injury Protection (PIP): This election enables you to file for lost wages and medical bills up to the agreed coverage maximum.
  • Uninsured/Underinsured Motorist (UM/UIM): This provision requires your insurance company to cover up to the policy maximum for accident damages resulting from an uninsured or underinsured motorist.
  • Product Liability: Where your injury or damage was the result of a defective or dangerous product that caused the accident, like a defective car part, you might be able to succeed on this claim.
  • Vicarious Liability: If the accident was caused by a driver who was "on the job" then you might be able to sue the business that owns or operates the service vehicle.

Stages Of The Auto Accident Settlement Process

After you've gathered the necessary evidence including medical reports, the police report, the witness statements and photos of the damage caused, you're ready to start the car accident settlement process. Depending on the facts and evidence, a car accident settlement could typically take around 14 months to process.

5 Stages Of An Auto Accident Settlement

  1. Demand Letter: This letter starts the car accident settlement timeline because it details your claim, the injuries sustained, and the amount you'd like to recover.
  2. Initial Response: You'll be informed that your insurance company has officially filed your claim within a couple weeks of your original filing.
  3. Initial Review: Your insurance company will review the merits of your claim within a few weeks and, if it's not denied, you'll receive an initial offer for settlement which is typically low.
  4. Settlement Negotiations: If you're unsatisfied with the settlement offer, you can reject it and then begin rounds of negotiations in which you submit further evidence to your insurance adjuster; this will typically last several months until a settlement is agreed upon.
  5. Settlement Check: Once the full settlement amount is agreed to, a check is issued and usually sent out within 30 days.

Factors That Determine The Auto Accident Settlement Timeline

The following factors can extend the timeline for filing your auto accident claim. The longer it takes for you to determine these factors, the longer it will take to file and collect on your claim.

  • Maximum Medical Improvement (MMI): A doctor must determine that your injuries have reached the maximum medical improvement (MMI) ability for healing, or the point at which further improvement may not be possible. Depending on your circumstances, it may be necessary to wait until the MMI is known to estimate future medical costs.
  • Total Expense Calculation: Before filing your claim, you must know the full amount you'll be filing for, or the total expense calculation. Medical or auto damage repair delays can further postpone this filing. There are different forms of compensation for damages, which can be classified as either economic or special damages (such as medical payments or lost wages) or non-economic or general damages (such as pain and suffering).
  • Evidence Collection: Filing an auto accident claim hinges on collecting evidence such as police reports and medical evaluations, which can take time. Keeping clear and extensive records of your claim's evidence is key to developing a winning claim.

When Should You File A Lawsuit?

As you work through the settlement timeline, it can be difficult to know when a lawsuit might be needed. For one, it's hard to determine the actual value of your claim – or even the types of valid claims you could file. Also, some insurance adjusters will lowball you and not present a fair car accident settlement offer. But, as with most things in life, timing is everything when it comes to filing a lawsuit, which is why it helps to speak with an attorney.

Need To Know How An Auto Accident Settlement Would Work In Your Case?

Whether you're simply trying to understand how car accident settlements work, or you're considering going to court, get the answers you need starting with a free estimate of your car accident case today.

Legal Disclaimer: This article contains general legal information but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.