An Overview of the Auto Accident Settlement Process

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There is so much uncertainty that surrounds an auto accident injury. Can you afford the appropriate medical care? Will you need to miss work for a few months? Most importantly, how long does it take to settle an auto accident claim? On average, auto accident injury claims settle within 14 months.

A lot can happen between the date of an auto accident and when a settlement check arrives in the mail. Even when car accident victims follow the exact steps outlined by the insurance company, lengthy settlement negotiations and other unexpected factors can extend the time it takes to receive a payout. It is not uncommon for hundreds or even thousands of dollars of debt to accumulate during this time.

At David Bryant Law, we understand how frustrating it can be to suffer a personal injury caused by another driver just to have to wait more than a year to receive payment for your medical bills and lost wages. Here’s what to expect from the auto accident settlement process and how an experienced Kentucky auto accident lawyer can help you each step of the way.

How Do Car Accident Settlements Work?

The phases of the car accident settlement process

The majority of insurance companies allocate 50 to 60 business days to the car accident settlement process. However, the process begins long before you even contact the insurance company. The first step is gathering the appropriate evidence in your case, including medical records, police reports, witness statements, and photos of all physical and property damage.

Then the car accident settlement process works its way through 5 distinct phases.

Phase 1: Demand Letter

Once you’ve acquired the necessary evidence, you must draft a demand letter that states your claim (your account of the accident), the injuries you suffered in the accident, and the accident expenses you’d like to recover from the at-fault driver. Only send the demand letter for your injury claim when you can quantify the total expenses you’re owed. The car accident settlement process truly begins once the claimant (the individual filing the insurance claim) sends their demand letter.

Phase 2: Initial Response

After receiving the demand letter, the insurance company will file your claim and provide you with the next steps. Demand letters are filed in the order they are received, but most insurance companies have 10 business days to issue a response.

Phase 3: Initial Review

After the initial filing, the insurance company will review the details of your case and decide if they will accept or deny your claim. If it’s denied, you can likely file an appeal with the insurance adjuster. If it’s accepted, the insurance company will make a settlement offer. Most insurance companies must accept or deny an insurance claim within 15 business days.

Phase 4: Settlement Negotiations

If you are not satisfied with your initial offer, you can enter settlement negotiations with an insurance adjuster until all parties come to an agreement. This phase can last for a few months at a minimum, especially since most insurance companies receive an additional 15 business days to make a decision each time the claimant submits new information.

Phase 5: Settlement Check

When all parties come to an agreement on compensation, a settlement check must be issued within 30 business days. At this point, the settlement process comes to an end.

After you receive the check, you’ll need to determine which parts of your car accident settlement are taxable.

When Should You Negotiate vs. File a Car Accident Lawsuit?

Some accident victims become so tired of wondering how long it takes to settle an auto accident claim that they question if they should just file a car accident lawsuit instead. If you’re unsure if you should proceed with your insurance claim, it’s important to know that the majority of personal injury cases, like auto accidents, settle outside of court—and just 3% make it to trial.

There are a few situations that warrant filing a car accident lawsuit, including:

  1. The original personal injury claim has been denied.
  2. The at-fault driver had no auto insurance coverage or was underinsured.
  3. The settlement offer is significantly less than what was listed in the demand letter.

More often than not, filing a car accident lawsuit will only cause further delays in the settlement process. If you decide to sue the at-fault driver, you will need to draft a complaint (a lengthier version of your demand letter) and file it with your county or district court. The at-fault driver must respond to the complaint and list any defenses or counter-claims.

From here, your case will be set on a trial schedule, which will establish deadlines for the key phases of the lawsuit like discovery, motion filing, and taking depositions. These phases can take several months to accomplish, as each party is allotted time to gather evidence and witness statements. If the case does not reach a settlement agreement through mediation after these phases, the lawsuit will proceed to trial.

If this process seems time-consuming, that’s because it is. It’s often much faster to simply stick with settlement negotiations, especially if you approach the insurance company with a trusted attorney by your side. Proper representation may help you avoid filing a car accident lawsuit.

3 Factors that Dictate the Settlement Process

The three factors that the dictate the settlement process.

Though the settlement process should last approximately 60 days from the initial settlement demand to the final settlement check, certain factors can delay the process. Here are the three factors that impact the amount of time it takes to reach a settlement agreement.

1. Maximum Medical Improvement (MMI)

A personal injury claim cannot be filed until an injury has fully healed, or a doctor decides the victim has reached maximum medical improvement (MMI). In car accident cases, MMI refers to the level at which a victim’s condition cannot be healed any further. In other words, a victim that reaches MMI will not improve any more than they have at that moment, even with additional medical treatment.

The reason car accident victims must wait until a doctor decides they’ve reached MMI is that it’s difficult to estimate the total cost of injury expenses if they’re still in active recovery. For instance, if you were to file a personal injury claim for severe injuries in February but discover you need surgery in March, the initial amount of expenses listed in your demand letter would be very inaccurate.

The amount of time it takes to reach MMI relies on the extent of your injuries. If you’ve suffered serious injuries, such as internal organ damage or severely broken bones, it can be several months or even a year before a doctor declares that you’ve reached MMI. If you sustained minor injuries, like a muscle sprain, you could reach MMI in a few weeks or a few months.

2. Calculation of Total Expenses

An insurance claim cannot be filed until the victim calculates their total expenses. Expenses in an auto accident settlement are referred to as compensatory damages. Compensatory damages include all of the spending or debt caused by the accident, including medical bills and vehicle repair costs.

Since a car accident settlement relies on the amount of money listed in the demand letter, a demand letter cannot be sent until all damages have been accounted for, documented, and added to the demand total. Delays in medical treatment or vehicle repairs can significantly stall this process.

3. Evidence Collection

A proper demand letter must include all of the evidence from a car crash. The evidence collection process can take a fair amount of time, especially when requesting medical records or police reports. The longer it takes to obtain the right evidence, the longer it takes for a payout.

Once the insurance company receives your demand letter, they can also request additional evidence like additional photos of the damage or a deposition from an eyewitness. This additional evidence may be necessary to corroborate your claim. Evidence requests can contribute to weeks-long delays in the process.

Other Elements to Consider When Determining Your Settlement Timeline

If you’re curious how long it takes to settle an auto accident claim, it’s important to realize that there are a few other elements that can impact the general settlement timeline. Take a look at a few other factors that can impact the amount of time it takes to receive an auto accident settlement.

  • Liability Disputes: The insurance company does not believe you have a valid claim or doubts the other driver is responsible for your injuries, so you have to resubmit your claim or file a lawsuit.
  • Negligence Laws: A debate over who was at fault or if both parties acted negligently can complicate an injury claim.
  • Minimal Compensation: A drastically lower settlement offer or minimal compensation for serious injuries can require extensive evidence collection to defend the claim.
  • Statute of Limitations: The statute of limitations for a car crash refers to the amount of time a victim has to file a lawsuit. Kentucky’s car accident laws give drivers two years from the date of the accident (or last no-fault payment) to file.

What if the Insurance Company Isn’t in a Hurry to Settle?

Older man looking at bills piling up after car accident.

There is always a chance that the insurance company will not be in a rush to settle. Each time an insurance adjuster requests additional information from a claimant, the entire settlement process can be extended by another 10 to 15 days—which means a savvy adjuster can keep requesting information for weeks on end.

If the insurance company isn’t in a hurry to settle, it’s important to speak with a qualified personal injury lawyer as soon as possible. A lawyer can advise you on how to move forward with evidence collection or document gathering and even speak with the insurance adjuster on your behalf to accelerate the amount of time it takes to receive a settlement offer.

How Can Working With a Car Accident Lawyer Affect Your Timeline?

So, how can working with a car accident attorney really affect your timeline? While a car accident lawyer cannot control how long the insurance company takes to make an offer, they can alleviate the mental stress and financial burden in the meantime. Rather than rush the process to receive an unfair settlement amount, a lawyer can help with medical liens and other medical bill assistance.

An experienced car accident attorney has spoken with insurance adjusters dozens of times in the past. They’ve filed hundreds of demand letters and handled the tedious paperwork that goes into evidence collection. They’ve ultimately learned the most efficient ways to pursue a payout for auto accident injuries, so you can heal while they work to expedite your settlement timeline.

Common Types of Compensation for Car Accident Cases

As mentioned above, the expenses in a personal injury case are referred to as compensatory damages. These damages are classified as either economic damages or non-economic damages. The combined total of both types of damages listed in your claim will equal the total value of your case.

Economic Damages

Economic damages refer to any expense or loss related to the accident. Also known as special damages, economic damages must have a specific dollar amount, such as a medical bill or vehicle repair costs. These damages aim to repay a victim for all expenses incurred or money lost.

Examples of economic damages in car accident cases include:

  • Medical care costs, including ambulance rides and surgery
  • Home-care costs, such as a home nurse or special equipment
  • Property damage costs, like vehicle repairs and rental fees
  • Lost wages, including sick time and vacation days
  • Loss of earnings and loss of future earnings

Non-Economic Damages

Non-economic damages are non-monetary losses caused by the accident. Also known as general damages, non-economic damages in a personal injury claim do not have a specific price tag. They are meant to compensate an accident victim for the general harm caused by the crash.

Examples of non-economic damages in car accident cases include:

How an Expert Can Help Prove Your Damages Were Due to Another’s Negligence

A lawyer and a client shaking hands.

Personal injury claims like auto accident injuries are decided based on negligence. A car accident case is only approved if the insurance company agrees that the at-fault driver acted negligently or without regard to other drivers on the road. The only problem is most drivers will not admit fault, making the question of negligence a “he-said, she-said” issue.

A personal injury attorney will review your car accident claim to determine exactly how to prove another’s negligence. They will begin an extensive evidence collection to gather police reports, security camera footage, eyewitness testimony, and expert witness testimony to use facts to help prove your damages were due to the at-fault driver’s actions.

Let David Bryant Law Help Settle Your Car Accident Claim

Have you been injured in an auto accident and become frustrated with the settlement process? You’re not alone. Reach out to a trusted law firm like David Bryant Law for a free case evaluation to learn which steps to take next. An accident attorney can provide legal advice to help expedite insurance negotiations and help you receive your settlement check sooner.

Every accident victim deserves a fair settlement process. Contact us today for a free consultation.

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David G. Bryant is certified to practice in all state courts in Kentucky, and federal courts in the Eastern and Western districts of Kentucky, Southern District of New York, Southern District of West Virginia, Northern District of Ohio, Middle District of Tennessee, and Western District of Pennsylvania. He is licensed to practice before the United States Supreme Court and the Sixth Circuit Court of Appeals.