This introduction to car accident claims gives you the big picture, the view from 30,000 feet.
Let’s get started.
Car Accident Statistics
Estimates of the number of car accidents in the United States each year range from 6 million to over 10 million. Using the larger figure, which comes from the U.S. Census Bureau, the average is almost 30,000 accidents daily.
Although this figure has been coming down, In 2010, according to the National Highway Traffic Safety Administration’s (NHTSA), there were still 32,788 traffic fatalities. And, more than 2 million more drivers, passengers and pedestrians were injured by car accidents.
Car accidents frequently result in car accident claims, an estimated 3,000,000 each year.
Statistically, you will make a car accident claim every 15 to 17 years.
Settle Your Claim Yourself exists to assist you when it is your turn to make car accident claims.
Although it may surprise you to hear a car accident lawyer such as me say this, I am convinced you can settle your own routine car accident claims if you want to. I believe you can recover full value for your claims without hiring a lawyer. All you need is some information about the car accident claims process and you are in the right place to get it.
Car Accident Claims Legal Concepts
Traditionally, car accident claims have been based on a fault system. The driver who causes an accident pays for the harm done.
Technically, fault claims arising out of car accidents are “negligence” claims.
When someone violates the duty of reasonable care and causes harm, they are considered negligent and they are responsible for the harm they cause.
While most states have a fault system for car accident injury claims, there are currently 12 states that have a no-fault system. The no-fault states are Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah.
In no-fault states, your insurance company pays your medical bills and lost income, but you cannot recover for pain and suffering.
Actually, even in no-fault states, you can file a lawsuit against the at-fault driver, and recover pain and suffering damages, if your case exceeds a certain “threshold.” Thresholds vary from no-fault state to no-fault state but normally involve having medical bills in excess of a certain amount or suffering a “serious injury,” which is defined in the state’s laws.
Curiously, even in no-fault states, fault still determines who pays for property damage caused by a car accident.
Car Accident Liability
In fault states, the first question that must be answered is “who caused the accident?” Or, stated more correctly, “was anyone negligent?”
Generally, those who are negligent and cause accidents are responsible for the resulting damages.
Four states (and D.C.) have a defense called contributory negligence.
Contributory negligence is a complete and total defense to a negligence claim. So, if someone else was the primary cause of an accident, but you were partly to blame for causing it, in contributory negligence states – Alabama, North Carolina, Maryland and Virginia (as well as the District of Columbia) – your contributory negligence completely defeats your claim against the primarily negligent driver. Pretty harsh, huh?
The other states have one of several forms of comparative negligence. Because there are different forms of comparative negligence, be sure to check the law of the state where your car accident happened to get the details.
Generally, though, under a comparative negligence system, your degree of negligence reduces your claim against the more negligent driver by the percentage of your fault. For example, if you were 25% responsible for causing an accident, your claim against the driver who was primarily responsible would be reduced by 25% on account of your contribution to causing the accident.
What I have discussed so far, in car accident lingo, is called the “liability” issue. Here’s the “bottom line”: If there is no liability, there is no car accident claim that you can make against another driver (although you may be entitled to benefits under your own car accident policy).
Car Accident Damages
If there is liability, the next question is “what harm did the careless conduct cause?” In the language of car accident claims, this question is called the damages question.
See, you are already becoming fluent in car accident-speak. The first car accident claims issue is “liability” and the second issue is “damages.”
One is a claim for damage to your property, mainly your vehicle. These are commonly called property damage, or “P.D.,” claims.
The other type of claim seeks compensation for injuries incurred in the accident. Some insurance companies call these personal injury or “P.I.” claims. Other companies call them bodily injury or “B.I.” claims.
Basically, your claim for injuries (P.I. or B.I.) entitles you to compensation for two things: financial losses and non-financial losses.
Financial losses include the medical bills you incurred, any loss of income and any other financial losses directly caused by the car accident. In insurance-speak, these financial losses are called “special damages,” or “specials.”
Non-financial losses, or “general damages,” are often referred to as “pain and suffering.” While physical pain and mental anguish are part of what is included in these non-financial losses, there are other elements of general damages including such things as inconvenience, loss of enjoyment of life and any negative effects on your marriage (which is called “loss of consortium”).
If liability exists, you can recover the special damages and general damages resulting from your car accident. If you received a permanent injury that will cause future damages, you can recover those too.
The Car Accident Settlement Process
Most car accident claims are settled without a court trial. In fact, most are settled without courts being involved at all.
Most often, car accident claims are settled by an agreement between the claimant (that’s you) and the insurance company responsible for paying damages.
Yes, although your claim is against the at-fault driver, in the overwhelming number of cases, that other driver had car insurance so you end up dealing with the negligent driver’s insurance company, not the driver herself. In practice, the insurance company makes all decisions concerning the claim and, up to their policy limit, pays any damages their policyholder owes.
While there are exceptions to these general rules, this is how settlements are usually reached.
Shortly after the accident, car damage claims are resolved. You are entitled to the lower of these two: the cost of repairing your vehicle or your vehicle’s actual cash value. So, if it would cost $10,000 to repair your vehicle which is only worth $7,500, your vehicle is considered a “total loss” and you are entitled to receive its value. You are also probably entitled to a rental vehicle while yours is being repaired or until you are paid for your totaled vehicle.
Later, after you recover from your injuries, you can make a car accident injury claim.
Normally, injury claims are initiated by you sending a letter, alternately called a “settlement letter” or a “demand letter,” to the responsible insurance company.
In the letter, you document what caused the collision, to prove liability, and you document your losses, to prove damages. Based on the evidence, you make a “demand” for a specified amount that you will accept as compensation for your injuries and damages.
This “demand” usually leads to back-and-forth settlement negotiations with the insurance company. With solid documentation and reasonable negotiation skills, this process will lead you to a car accident settlement.
Car Accident Lawsuits
Sometimes, the negotiations with the insurance company do not produce a settlement. The usual reasons a settlement cannot be made is that you and the insurance company disagree over who caused the accident (liability) or over the amount you are entitled to receive as compensation (damages).
Although there are infrequently-used alternatives, such as mediation and arbitration, the usual alternative if you cannot settle with the insurance company is a car accident lawsuit.
I believe that you can effectively represent yourself in a lawsuit against the driver who caused your accident if that case is in small claims court. In small claims court, formal court procedures are simplified, as are the rules of evidence. One of the guiding principles behind small claims courts is that citizens should be able to represent themselves without a lawyer.
Small claims courts have limits on the maximum amount you can recover, and the limits vary from state to state. The range is a low of $1,500 in Kentucky to a maximum of $25,000 in some jurisdictions in Tennessee. Five thousand dollars ($5,000) is a common limit.
Car Accident Lawyers
As you know, I believe that you can settle routine car accident claims yourself, without a lawyer, provided only that you take the time to learn car accident claims basics. The fact that you are reading this article shows that you are willing to spend the time.
However, at any point in the process of settling your car accident claims, you may decide to hire a car accident lawyer.
For example, if there is a dispute over liability that will be fought out in regular civil court where technical rules of procedure and evidence apply (not small claims court), you should hire a lawyer. Or, if the amount in dispute is too much to risk losing, you should hire a lawyer to protect you.
Traditionally, lawyers charge a “contingent fee.” This means that the legal fee is contingent on you recovering money damages for your injuries. If there is no recovery, you owe no fee. If there is a recovery, you owe a percentage of it, usually 1/3, as a legal fee. You may also be responsible for paying out-of-pocket expenses such as court costs.
After You Settle Or Receive A Judgment
After your claim is resolved, either through an out-of-court settlement or a trial in court which results in a “judgment” in your favor, you are not done. There are details to be taken care of.
If you settled with the insurance company, you must sign a Release of your right to make any further claim against the at-fault driver arising out of this accident. That’s what a settlement is, an exchange. The insurance company pays you money damages and, in return, you waive (release) your right to make any further claims against the at-fault driver.
There may also be claims against the amount you recovered.
For example, you may have unpaid medical bills. There may also be claims against your recovery from those who paid your medical bills, such as Medicare or your health insurance company. These claims are called liens or subrogation claims. There are technical differences between liens and subrogation claims, but the practical effect of both is that claims are being made against your recovery, and you must deal with them.
Don’t pay more on these claims that you are required to pay.
Final Thoughts About Car Accident Claims
It doesn’t sound complicated, does it?
Sure, there are details that are not covered in this introduction to car accident claims, but you can find discussions of those details elsewhere at Settle Your Claim Yourself.