Insurance Claim vs. Lawsuit
An insurance claim is a request for compensation by you against the at-fault driver’s insurance. A claim happens not in the court system but in pre-litigation of the case. It is a time where both parties can talk about the settling the case without going to court.
During the claim phase time, you are treating with your medical providers for injuries and your attorney is gathering as much information as possible for your case. The attorney will be requesting any police reports, property damage estimates and photos, medical records and bills, and witness statements. In addition the attorney will be trying to determine the other driver’s insurance coverage limits.
Please understand that in pre-litigation, your attorney will not have the power of discovery and therefore may not be able to get any information from the other driver. Your attorney may ask for the information regarding insurance limits but the other side does not have to give up the information.
At some point, your attorney will provide the other side your demand package. However, the other side may not agree with any of the information provided. The process between your attorney and the other driver’s insurance company is an adversary one. There are only a couple of pressures to deal with in a claim stage. You have to deal with the stature of limitations to make sure it does not run. The other side has to deal with the pressure of the size of their client’s insurance policy limits. If the injuries are large and the policy limits are low then the insurance company may have to offer the limits or face consequences.
If there is an agreement between you and the other side there is a settlement and the claim stage is over.
If no agreement you have two courses of action, either drop your claim or file a lawsuit in the court system.
A lawsuit is still adversarial in nature. However, three distinct advantages come with filing a lawsuit.
First, both sides have to talk. The process is known as discovery and information has to be exchanged or there may be consequences with the courts. Information may be exchange through interrogatories (questions), depositions of the parties, and of the experts and witnesses. Information that may be gathered are facts of the accident, resulting injuries, any loss of earnings, pain and suffering, and insurance.
Second, there is a possibility of mediation between both sides. Unlike a claim, the court can force both sides to sit down and talk about the case. This is a set time and place where the major parties, the attorneys, clients, and insurance adjuster have to be present. A mediator will help both sides see the positives and negatives of their case. Since claims and lawsuits are adversarial, mediation may be the first time the parties talk about the case and compensation.
Finally, in a lawsuit there will be a resolution. The courts will place a trial date and if there is no settlement both sides will see the inside of a courtroom for either a judge or jury to determine the fate of the case. In trials the outcome can higher or lower than expected. This pressure of the uncertainly trial and of time may help both sides come to an agreement earlier.