A car collision can be a devastating experience, and the consequences can make life difficult for months or years. The law might allow you to obtain reimbursement if you suffered from another person’s negligence. You can locate a car accident lawyer if you believe you have a case.
Your attorney may believe a lawsuit is the next step to secure the compensation you need. You may wonder how a car accident lawsuit works. The process is complex and can take a while. You should have a car accident attorney with you if you plan to start one.
How Long Do You Have to File a Car Accident Lawsuit?
The average economic cost of car accident injuries is around $29,200. Debilitating injuries can lead to even higher expenses. A person can obtain financial relief from insurance companies, but they do not have long to do so.
Every state has a statute of limitations. The law sets a specific number of years a person has to file a car accident lawsuit. The deadline ranges from one year to six, and the clock starts running on the day of the collision.
When the statute of limitations expires, a person loses their right to compensation. As a result, they should get started as quickly as they can. However, a few people can get an extension if they qualify.
A common exception is if the victim is a minor. The statute of limitations pauses until the injured person turns 18. Another requirement is if the defendant left the state before the victim could file a lawsuit. Alternatively, both parties can agree to toll the deadline.
How Does a Car Accident Lawsuit Work?
File an Insurance Claim
Before someone begins a lawsuit, they need to file an accident claim with the insurance company. After the collision, they call the at-fault driver’s insurer and let the adjuster know they plan to file a claim. A person might file a claim with their insurer if the other motorist has little to no coverage.
After you call, the adjuster begins to investigate the accident. You have to wait for them to assess the damage to the vehicle and produce a report. The adjuster offers you a settlement once they calculate the worth of the property damage and bodily injury. Alternatively, the insurer can reject your claim.
Contact a Lawyer
The next step is to consult a lawyer. You can reach out to one at any time. A sign to find a car accident law firm is if the adjuster uses unfair tactics. For example, they ask for a recorded statement or delay the claim. An attorney can place pressure on the adjuster and negotiate with them.
Your lawyer may start a lawsuit if the insurance company seems unwilling to offer a fair settlement. Additionally, you could sue if you believe the insurer denied your claim in bad faith.
Before your attorney initiates a lawsuit, they lay the groundwork by collecting evidence. Evidence helps prove negligence and gives your case credibility. They get the necessary information during their investigation.
Plaintiffs regularly use photographs of the collision in car accident lawsuits. Pictures usually display the damaged vehicle from different angles. Additionally, you can take photos of your condition immediately after the crash. The images prove to the insurer that you did not exaggerate your injuries.
Besides photographs, the lawyer calls upon witnesses to support your case. They can be a third party who saw the events unfold. Moreover, your lawsuit can benefit from an expert witness. The individual can be an accident reconstruction specialist. Additionally, your attorney can use your doctor’s prognosis report as testimony.
You can expect your car accident lawyer to collect medical records and bills to show how the accident led to damages. X-rays, doctor’s notes, hospital bills, and medication receipts are beneficial in a lawsuit. Therefore, you should begin treatment right away.
The Demand Letter
Your lawyer drafts a demand letter to send to the at-fault party’s insurance company. The letter explains the facts of the case and the nature of the injuries. The document also lists how much you plan to seek in a settlement.
The other party can accept the demand letter or reject it. Alternatively, they can reply with a different offer. Your lawyer negotiates with the insurer. If the negotiations fail, a lawsuit may become necessary.
Once you are ready, your lawyer officially files a lawsuit. They start with the first document, known as the complaint. The complaint tells the court who the injured party and the defendant are. Furthermore, the document describes details of the accident and the legal basis of your case.
After your lawyer submits the complaint, they serve a copy to the defendant. Then, you have to wait for the defendant to send their answer. If the other party denies the allegations, the lawsuit proceeds to the next step.
The longest part of a car accident lawsuit is the discovery phase. Your lawyer investigates what defenses the opposing party will use. In addition, both parties send each other interrogatories and document requests.
Another part of the discovery stage is the depositions. Attorneys depose the plaintiff, defendant, and any witnesses.
After the discovery, both parties negotiate a settlement. The lawyers from each side may discuss the terms themselves, or their clients can attend the meetings. Some people go to mediation, where a neutral third party helps mediate the discussions.
Most car accident lawsuits settle during the mediation stage or earlier. An estimated 95 percent of lawsuits settle pre-trial. If neither party can agree, then the case may go to trial.
Only a handful of collision cases need to go to trial. Both parties stand before a judge in a courtroom. The plaintiff’s lawyer must prove to the jury how the other driver did not exercise reasonable caution. Additionally, they should provide evidence of how much the victim lost due to the crash.
Both sides present their arguments, and the jury decides the outcome. The chance of winning compensation is lower during a trial compared to earlier stages. Therefore, you should find an attorney with experience representing clients in the courtroom.
How the Settlement Process Works
Settlement Release Forms
The settlement process begins when both sides agree on a settlement deal. On average, the procedure lasts between four to six weeks. The process starts with the settlement release papers. The forms mean the plaintiff legally waives liability from the defendant.
You will be unable to sue the opposing party for further damages for the same accident. Therefore, your lawyer checks the terms of the agreement before you provide a signature. They ensure you get fair compensation at the end. Afterward, you can sign the release forms.
The Insurer Produces a Check
The insurance company does not release any money until you sign the settlement release papers. After the adjuster gets the documents, they begin to process the check. They might take a week or two to do so.
A delay could happen to extend the settlement process. Nevertheless, your lawyer may contact the insurer if enough time has passed without a word.
The Lawyer Deducts Fees
After the insurance company sends the check, the money does not go straight to you. Instead, the funds arrive at your attorney’s office. The lawyer places the settlement money into a secure account. They wait for everything to clear to ensure the other side has enough money to pay you.
When the money in the account clears, your attorney begins to deduct costs. They start with the attorney fees. Most lawyers charge about 33 percent for a contingency fee, but some take more or less. Then, they remove additional litigation costs from the settlement funds.
The expenses usually include court reporter costs and filing fees. Your attorney may deduct court costs before or after the contingency fee. Afterward, they check if any liens are a part of your lawsuit.
Your health insurance company might have placed a lien on your claim for unpaid bills. The insurer and any entity with a lien on your account have priority. Your lawyer pays for them before writing you a check for the remaining amount.
You Get the Money
The rest of the compensation goes to you. Some lawyers send the money through the mail in the form of a check. However, you can visit your lawyer’s office to pick up the settlement funds. Afterward, you can use the money at your discretion.
What Is a Car Accident Lawsuit Worth?
Many people wonder how much they can get from a car accident settlement. The average amount for bodily injury is over $20,200. However, a person may receive more or less in their settlement.
The compensation you can expect depends on the damages you can claim.
Settlements can cover:
- Past and future bills
- Property damage
- Lost income
- Loss of future earning capacity
- Pain and suffering
- Loss of consortium
- Punitive damages
Several factors influence the value of a car accident lawsuit as well. For instance, the severity of the injuries may increase the potential amount. Acute injuries generally require extensive treatment. As a result, you accumulate more medical bills for compensation to cover.
Another factor is where you filed a lawsuit. Different jurisdictions place a higher or lower value on specific damages. A court in one location may award a higher amount for pain and suffering than in another place. Your attorney typically takes various factors into account when they calculate the settlement.
Most Car Accident Settlements Are Tax-Free
One concern some people may have is if they need to pay taxes on their compensation. However, you do not have to worry about reporting the money to the IRS. The law generally exempts car accident settlements from federal taxation. Additionally, you do not have to pay state taxes.
Non-economic damages remain tax-free as long as it connects to a physical injury. Not even lost wages count as reported income in a car accident settlement. Nevertheless, a couple of exceptions would make compensation taxable.
For example, you would have to report the money if you received punitive damages. Punitive damages punish the defendant rather than compensate you for your injuries. Therefore, the government takes a portion. Nonetheless, only the punitive section is not tax-free. The rest of the compensation is exempt unless you have deducted costs.
You may have deducted the price of an injury in the previous tax year. The government sees the compensation as a gain since you already wrote the expenses off. You would only report the part of the settlement you have already deducted.
Another possible exception is if the judgment has an interest. Many states have their courts add interest to verdicts. The amount relies on the length of time a lawsuit remains pending. Accumulation starts on the day you file a personal injury lawsuit and ends when you get a payment. Of course, you only pay taxes for the interest.