After an accident, it’s normal to feel confused about your next steps, especially when you start hearing terms like “insurance claim” and “lawsuit.”
Many people assume these mean the same thing, but they work very differently. If you’re searching for the difference between a claim and a lawsuit, you’re likely trying to understand which option applies to your situation and what it takes to recover compensation.
Both can provide payment for medical bills, lost income, and pain and suffering. However, each follows its own rules and strategies. Knowing the basics reduces confusion and enables better decision-making.
At The Beliz Law Firm, we have helped Long Beach residents navigate both insurance claims and personal injury lawsuits for nearly two decades. Below, we outline the key distinctions so you can make informed decisions about your case.
What Is an Insurance Claim?
An insurance claim is the first step most injured people take after an accident. It is a request for the at-fault party’s insurance company, or your own insurer, depending on the situation, to pay for your damages.
Insurance claims are handled outside of court and generally involve communication between you (or your attorney) and an insurance adjuster.
In a personal injury case, this process may involve:
- Reporting the accident to the insurance company;
- Providing medical records, photos, or repair estimates;
- Explaining how the accident happened; and
- Negotiating a settlement amount.
Insurance claims are typically resolved through negotiation and settlement. Because they stay outside the courtroom, they tend to be faster and less expensive.
However, claims also have significant limitations. Insurance companies are motivated to minimize payouts and may dispute injuries, delay the process, or make low settlement offers. If negotiations reach a standstill, filing a lawsuit may be the only way to move forward.
What Is a Personal Injury Lawsuit?
A personal injury lawsuit is a formal legal action filed in court against the person or company responsible for your injuries. This process may include:
- Filing a complaint that explains how the defendant caused your injuries;
- Conducting discovery, including depositions and written questions;
- Exchanging evidence with the other side;
- Attending hearings or mediation; and
- Preparing for trial if the parties cannot agree.
Lawsuits typically take longer than insurance claims because they follow strict procedures and timelines. Even so, most personal injury lawsuits still settle before reaching trial, often after both sides see the strength of the evidence during discovery.
However, if the parties cannot agree on a fair resolution, whether due to disputed fault, undervalued damages, or unreasonable insurance tactics, your Long Beach personal injury lawyer can present your case to a judge or jury.
Trial becomes the final opportunity to secure the compensation the law allows when negotiations fall short.
Insurance Claim vs. Lawsuit: Key Differences
Understanding the differences between a claim and a lawsuit can help you see why your case might start with one and progress to the other. Below are some of the most important differences, explained in clear terms.
1. Setting: Informal Negotiation vs. Formal Court Process
An insurance claim happens outside the courtroom. You are negotiating with an adjuster whose goal is to resolve the claim at the lowest reasonable cost.
A lawsuit occurs within the legal system, involving procedures, deadlines, judges, and potentially culminating in a courtroom appearance. It is more structured and can offer more tools for proving your case.
2. Who Makes the Decision?
In a claim, the insurance company decides how much it is willing to offer, and you can, after consulting with your attorney, accept the offer or reject it and further negotiate.
In a lawsuit, a judge or jury may ultimately decide the case if it does not settle. This can lead to fairer outcomes when the insurer is being unreasonable.
3. Time
The amount of time it takes to resolve an insurance claim or lawsuit depends heavily on the facts of the case. For an insurance claim, negotiations may move quickly when fault is clear, injuries are well-documented, and the insurance company cooperates.
However, if injuries are still being treated, a dispute over liability exists, or multiple parties are involved, the claims process can take longer.
A lawsuit typically takes more time than an insurance claim because it involves formal steps, such as discovery, depositions, motions, and court scheduling. If the case proceeds all the way to trial, the timeline can be significantly extended.
4. Cost
Regardless of whether your case remains in the insurance claim phase or progresses to a lawsuit, having an attorney throughout both stages is important.
Negotiating alone with an insurance company can put you at a disadvantage, and handling a lawsuit without legal representation is extremely challenging.
An attorney guides you through deadlines, evidence collection, and strategy so your rights remain protected at every step.
At The Beliz Law Firm, you can receive this guidance without incurring upfront expenses. We offer free consultations to help you understand your options.
We work on a contingency fee basis, so you pay no attorney fees unless we recover compensation on your behalf. This fee structure allows you to pursue your claim with confidence, whether it is settled through an insurance claim or requires filing a lawsuit.
5. Procedure
One key difference between an insurance claim and a lawsuit is the range of legal tools available to you. During an insurance claim, the process is mainly controlled by the insurance company.
However, you still have negotiating power, especially when you present strong evidence such as medical records, photos, witness statements, and repair estimates.
A lawsuit, however, gives you access to the full legal system. Once a case is filed in court, both sides must follow formal procedures such as the following:
- Exchanging evidence through discovery,
- Answering written questions,
- Giving depositions under oath, and
- Presenting expert testimony.
These steps can reveal crucial information that may have been unavailable during the claim, including internal company documents, electronic data, or additional witnesses. If the parties cannot reach an agreement, a jury or judge may ultimately determine fault and compensation.
When Does a Claim Turn Into a Lawsuit?
Not every case requires filing a lawsuit. But there are situations where it becomes the best, and sometimes only, option. You may need to file a lawsuit when:
- The insurance company denies your claim;
- The insurer refuses to offer a fair settlement; or
- Liability is disputed.
Note that in California, most personal injury lawsuits must be filed within two years of the accident. Negotiating with the insurance company does not pause this deadline.
Missing the statute of limitations means losing the right to pursue a lawsuit altogether, regardless of the strength of your case.
Therefore, regardless of the negotiating stage with the insurance company, your attorney may recommend filing a lawsuit in court to protect your rights.
Contact a Long Beach Personal Injury Lawyer at The Beliz Law Firm
After an accident, you may quickly find yourself searching for answers, especially when people start mentioning the claim vs. lawsuit process.
Understanding the difference between a claim and a lawsuit empowers you to make informed decisions about your recovery.
But you do not have to navigate this alone. Whether your case can be resolved through an insurance claim or requires legal action, having trusted guidance is crucial.
At The Beliz Law Firm, we focus exclusively on personal injury law, providing us with the insight and experience necessary to address the unique challenges that arise in both insurance negotiations and courtroom litigation.
If you were hurt in an accident, contact The Beliz Law Firm for a free consultation. We’ll explain your options, review your situation, and guide you through the next steps.