Insurance Claims vs. Lawsuits
When you are injured and it’s the fault of another person, company, organization, or entity, you may be able to recover damages. The process typically begins with a claim, and if things do not work in your favor, the process may move along to a lawsuit. Unfortunately, the terms “personal injury claim” and “personal injury lawsuit” are often interchanged, and this can leave victims confused because they don’t know which is what and overwhelmed because they are dealing with their own recovery and subsequent financial stresses while also having to make a decision on how to go about asking for compensation.
We believe clients make the best decisions for themselves when they are calm, and information helps calm them. So here, we identify the differences of a personal injury claim and personal injury lawsuit and also explain how they are often related. If you have additional questions or want to find a trusted, resourceful personal injury attorney to help make sure you are doing things right, contact us. We make it our business to help you find the right personal injury attorney in Los Angeles given your unique circumstances.
The Differences Between Personal Injury Claims & Lawsuits
The fight to get fair and just compensation for a personal injury caused by another person or entity is a daunting fight, but one you have to endure to get compensated. Sometimes, you succeed by just filing a claim while other times, you have to file a lawsuit. Claims and lawsuits are indeed two separate processes, but they both have the same end-goal: obtaining just and fair compensation.
A claim or lawsuit may be preferred over the other for strategic purposes or for necessity. A smart, skilled personal injury attorney benefits you because he has the insight to understand and develop a personal injury strategy suited for you and your circumstances. Knowing the difference between a claim and lawsuit can help you understand both the personal injury process and why your attorney may favor one method over the other in your case.
What is a Personal Injury Claim?
A personal injury claim is a claim made with an insurance company. The insurance company could be the victim’s own insurer (via a first-party claim) or the at-fault party’s insurer (via a third-party claim). Generally, claims can be made with any of the following types of insurance companies:
- Auto insurance
- Homeowner’s insurance
- Renter’s insurance
- Property owner’s insurance
- Professional liability insurance.
At some point during the insurance claims process, you may need to complete company forms and/or write a demand letter. The demand letter is a very important part of the process and will include key evidence and arguments. It must be persuasive in the manner the arguments are laid out, and those arguments must be supported by the facts and the evidence, including medical bills and reports from your physicians.
An adjuster for the insurance company will conduct an investigation before sending a settlement offer––if any. Part of the investigation may involve contacting you under the pretense they want to help, and to help, they need a few questions answered. But don’t answer those questions alone. If it is your own insurance company, advise them that you want your attorney present. If it’s the at-fault party’s insurance company, you have no contractual obligation, so you should respectfully deny an interview and advise the adjuster your insurance company will be in contact.
Once the settlement offer is provided, you and your attorney will determine if the offer is just and fair. If you decide it isn’t, then negotiations begin. But you are still in the claims process. At no point during the insurance claims process is the court involved. There are no hearings, only the gathering of evidence and negotiations on the settlement amount. Only when negotiations break down and time becomes a serious factor (think: statute of limitations, which is generally 2 years for most personal injury claims), will you consider a lawsuit.
In sum, the injury claim is the start of a personal injury case. The claims process ends when one of three possible situations occurs:
1. The insurance company denies your claim;
2. You accept a settlement offer; or
3. You decide to move forward with a lawsuit.
What is a Personal Injury Lawsuit?
A personal injury lawsuit is a legal process that first involves the filing of a complaint with the appropriate California court––typically the Superior Court, but in some cases, it could also be a small claims court. Because a lawsuit involves the courts, the entire process is much more complicated and stressful. For example:
- Civil rules of procedure must be closely and accurately followed.
- The plaintiff must prove (usually by a preponderance of the evidence) that the defendant was negligent or otherwise caused the accident that directly caused the injuries.
- Court processes, like discovery and hearings, can make the process longer.
- A trial can be demanding on the plaintiff’s emotions and mental state.
- A jury can respond in unanticipated ways.
- An appeal can make the whole ordeal that much longer and cumbersome.
During the lawsuit phase, negotiations for a settlement can still continue. This can be accomplished among the parties without outside help or through an alternative dispute resolution (ADR) mechanism, like mediation, arbitration, neutral evaluation, or a settlement conference. If you come to an agreement and want to settle during a pending lawsuit, it can be filed with the court. If a judge approves, then the case will be dismissed. On the other hand, if there isn’t a settlement and a jury renders a verdict in favor of one party, the “losing” party may be able to appeal.
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The Pros & Cons of Personal Injury Claims v. Lawsuits in California
There are pros and cons to both personal injury claims and lawsuits. Here’s an overview of them:
PI Claims: the Pros | PI Lawsuits: the Pros |
• Cost-savings: no court fees or trial expenses and fewer attorney fees • Safe-playing: for cases that aren’t as strong or are somewhat weak • Speediness: settling during the claims process is quicker than settling during a pending lawsuit • Privacy: anything that occurs during a settlement is private | • Day in Court: it’s therapeutic to address the person or organization that harmed you • Confidence: settling can make you resentful, especially if you feel like it wasn’t fair • Awards: if the litigation process ends up in a trial, juries grant significantly higher awards than what a settlement would provide |
PI Claims: the Cons | PI Lawsuits: the Cons |
• Settling: a lawsuit often renders larger compensatory awards, plus you may be eligible for punitive damages • Doing-it-alone: many people who file claims do so without an attorney to advocate their interests and exert pressure on the insurance adjuster, and that often leads to denied claim or under-valued claims • Delayed injuries: settlements may happen before you even know of an injury or before you know the extent of it––but once you settle, that’s it | • Uncertainty: you never know exactly how long the litigation will take and how much you will eventually recover. • Costs: may spend a large part of any award on filing fees, litigation costs, expert testimony and witnesses • Publicity: anything that happens during litigation or a trial is public (but this may be an advantage if that’s your intent––to highlight certain wrongful behavior taken by a certain person or company) |
Much of what happens in your personal injury case in Los Angeles will come down to two main factors:
1. The strength of your case (i.e., evidence); and
2. The amount of money involved (including potential award against the expenses of trial).
The Timeline of a California Personal Injury Case
As mentioned, a personal injury case can involve two parts. First, there’s the insurance claim. Many times a settlement will materialize from negotiations between you, your attorney, and the insurance company. Sometimes, a settlement can’t be reached, and that’s when the second part comes in: the lawsuit. Here’s a general timeline of a California personal injury case from the time of the injury to the point no further action can be taken.
1. The accident and the injury occur.
2. An attorney is consulted.
3. Medical expenses, property damage, lost wages, and other damages materialize.
4. The victim’s attorney investigates the claim.
5. A pre-suit demand, typically in the form of a demand letter, is filed with the insurance company, which could include:
a) History of facts and liability discussions
b) Applicable laws and regulations
c) Medical costs and other expenses
d) Settlement offer
6. A claim is settled or disputed.
7. If the claim is settled, then the action ceases and no further claims can be made.
8. If the claim is disputed, and the parties are not able to settle the case after reasonable attempts to negotiate and settle without formal litigation, a lawsuit is filed, which could include:
a) More investigations and evidence
b) Pleadings
c) Discovery
d) Hearings
e) Mediation or arbitration
f) Trial and verdict (note that only a small percentage of cases end up in a trial since the claims are usually settled at some point during litigation).
9. If the verdict is disputed, an appeal may be filed (this is even more rare).
This is simply an overview, but it presents an idea of how a personal injury case could possibly proceed. In some cases, however, it may go straight to a lawsuit, especially in cases involving defective products, medical malpractice, defamation, catastrophic injuries, mass torts and class actions, etc. It’s always important to speak to a personal injury attorney so that you know what your options are and which of those options are better for you and your circumstances.
Retain a Compassionate, Dedicated Personal Injury Attorney in Los Angeles
Don’t hesitate to contact us so that we can help you find the right personal injury attorney. The entire process can be overwhelming and confusing. Let the legal professionals take care of the claim or lawsuit while you take care of getting your life back.
