If a negligent individual or business injures you, you may seek compensation for your damages, including medical expenses, lost wages, and many others. You can do this through a personal injury claim or, if necessary, a personal injury lawsuit. If you’ve recently suffered an injury, you always want to understand the difference between a claim and a lawsuit.
Personal Injury Basics
A personal injury claim is a demand for monetary compensation, typically filed against the at-fault party’s insurance policy. After filing a claim, your personal injury lawyer can negotiate a settlement directly with the insurance carrier.
A personal injury lawsuit is a legal filing in civil court seeking compensation for damages from the at-fault party. The court determines if you should receive compensation and, if so, how much.
You can formally seek compensation for your damages through a personal injury claim or personal injury lawsuit. Generally speaking, your damages are the losses and inconveniences you suffered due to your injuries.
There are two categories of damages you can seek in a personal injury lawsuit:
- Economic damages or special damages have measurable costs like medical bills, property damage, and lost income and wages.
- Non-economic damages or general damages are not measurable by bills or receipts, such as pain, suffering, disfigurement, scarring, humiliation, and emotional distress.
Most personal injury claims are rooted in negligence— or the failure of someone to act in a manner that a reasonable individual would have acted in similar or the same circumstances.
For a successful negligence claim, you or your personal injury attorney need to show:
- The at-fault party owed you a duty of care
- The at-fault party breached that duty of care
- As a result, you suffered injuries
- Your injuries caused your damages
How do you know if you should file a personal injury lawsuit? In short, it’s best to hire an experienced personal injury attorney who will know how to manage your case so that you reach the best outcome possible.
The Differences Between a Personal Injury Claim and Lawsuit
Personal injury claims and lawsuits are different methods of pursuing compensation for damages. With either one, the burden of proof falls on the injured party. They must show that the other individual or company was negligent and that their injuries resulted from their negligence.
A personal injury claim typically involves coverage from an insurance company, for example:
- Motor vehicle insurance
- Homeowner’s insurance
- Business liability insurance
- Medical or legal malpractice insurance
An injury claim is between the injured party, the claimant, and the insurance carrier. In most situations, such as car accident claims, you must file your claim with the at-fault party’s insurance company before considering a personal injury lawsuit.
The claims process is mostly a series of negotiations between you (or your personal injury lawyer on your behalf) and the insurance company’s claims adjuster. This process can occur over the phone, by email, or even in person. The best-case scenario is that the negotiations result in a compromise that satisfies both parties.
It is always best to have a skilled lawyer handling all steps of your insurance claim, especially negotiations and reviewing settlement offers. Never accept an offer without legal advice.
Personal Injury Lawsuits
You or your personal injury attorney can file a personal injury lawsuit in civil court if the insurance adjuster denies your initial demand for compensation or the negotiation process doesn’t produce a full and fair settlement.
You must file the lawsuit against the individual or entity at-fault and not their insurance carrier.
You may not reach a full and fair settlement if the insurance company:
- Denies their insured was at fault
- Doesn’t accept the severity or extent of your injuries
- Doesn’t agree with the amount of compensation you are asking for
Malpractice, toxic exposure, defective products, and other complex personal injury cases typically start with a formal written demand for monetary compensation. A lawsuit quickly follows when the insurance company rejects the demand.
If claim negotiations stall and both parties can’t reach a compromise, the next step is litigation or filing a personal injury lawsuit.
However, even if the injured party files a lawsuit, most injury claims settle out of court. Some even settle once a trial has begun. Every personal injury case has its unique circumstances and details. Therefore, you should always discuss the benefits of settling versus proceeding to trial with your attorney.
Filing an Insurance Claim
Whether you need to file a claim with an auto, homeowners, or business liability insurance policy, most claims work the same way. After suffering a bodily injury resulting from the insured party’s negligence, you or your attorney send a written notice of an intent to file a claim to the insurance company. Do this as soon as possible after your injuries.
Upon receiving your notice, the insurance company will generate a claim number and assign your case to a claims adjuster. This person opens a claim and contacts you or your attorney to negotiate a settlement.
Your attorney will send the adjuster a demand letter explaining what you believe is fair compensation for the damages you have suffered. Your attorney and the adjuster might need a few rounds of offers and counteroffers to agree. Once they do, the insurance carrier sends you a release form and a check.
When you sign the release and cash the check, your claim is over. You release or give up your right to pursue additional compensation by taking these actions.
A negotiated settlement is frequently the best option as it avoids the cost and stress of a lawsuit. Pursuing a personal injury lawsuit might not be worth it unless you sustained a severe, catastrophic, or permanent injury. Even if the court awards you more than the adjuster offered as a settlement, it may not be worth it.
Before refusing a settlement, always consider the cost and time needed to pursue a lawsuit. With a settlement, you know exactly how much money you will receive and can move on with your life.
Most personal injury claims settle within a few weeks or months after the injured party files their claim. However, each claim is different, and some take longer than others.
Deadlines: The Statute of Limitations
Personal injury claims have legal deadlines known as the statute of limitations. Under these laws, if you don’t settle your claim or file a civil lawsuit before the legal deadline, or you give up your right to seek any financial recovery for your injury.
The day your injury occurs is when the clock starts ticking. You and your attorney should be mindful of the deadline in your case. The insurance company isn’t obligated to help you settle a claim within the statute of limitations or to provide a warning that your time is almost up. In Texas, the personal injury statute of limitations is two years.
Filing an Injury Lawsuit
A civil lawsuit may become your only option if your lawyer can’t reach an agreement with the other party’s insurance carrier. Note that you can file a personal injury lawsuit anytime, starting from the day of your injury. However, civil litigation is a last resort in most personal injury cases.
Even though you are filing a lawsuit against the at-fault party, their insurance company is obligated to defend their client. Filing a lawsuit is sometimes the only way to strongly encourage the insurance company to offer a full and fair settlement congruent with the extent of your damages.
Summons and Complaint
A personal injury lawsuit starts when you or your attorney files a complaint or petition with the clerk of the court. Injury victims typically file in the county where they sustained their injuries or where they live.
You or your attorney must also file a summons and provide a copy to the party responsible for your injuries. Your attorney will take care of where and how to provide them with such a copy, as the rules can vary from one court to the next.
The Cons of Filing a Lawsuit
- Time: With a settlement, your case usually resolves quicker than if it needs to go to trial. In cases involving many injured parties, many potentially at-fault parties, catastrophic injuries, or other complicating factors will take longer to settle and litigate.
- Risk: You never know what the court will decide after hearing your case. The judge or jury can side with the at-fault party. Even if you win, your award can still be better than the settlement offer you received before litigation. If you receive a significant award, the other side may appeal. Appeals are expensive and can drag out the case a lot longer.
- Costs: Litigation is costly. In addition to attorney fees, you are responsible for the associated expenses of filing and preparing your claim and lawsuit. If your attorney is working on a contingency basis, you won’t have to pay attorney’s fees if you lose, but you can be responsible for some or all of the other costs. These costs can add up quickly and make going to trial even riskier for you financially.
- Stress: You should also consider the stress you might face by litigating your case, especially if you are still trying to heal from your injuries. You will likely need to take the stand to discuss the accident and your injuries. This can be highly unnerving for some people. Victims who have every right to fair compensation have lost their lawsuits because the jury didn’t like how they presented themselves in court. This adds to the risk of litigation and can create more problems. By settling your injury claim, you can avoid speaking in front of dozens of other people about potentially personal details of your life and reduce your overall stress regarding the case.
Lawsuit expenses usually include:
- Court filing fees
- The cost to have a sheriff or someone else serve the complaint on the at-fault party
- Court reporter costs for depositions and transcripts
- Medical expert testimony at depositions and trial
- Fees for copies of medical records, police reports, or other documents necessary for litigation
It’s well within your legal rights to file a personal injury lawsuit if you don’t believe the at-fault party’s insurance company offered you a fair sum of money for what you suffered. However, it’s usually beneficial to explore other options first, like discussing your claim with a skilled attorney and letting them attempt a settlement negotiation on your behalf.
Your attorney is legally and ethically bound to present all offers to you. They can talk to you about what is fair and what isn’t. However, it’s ultimately up to you to decide to accept a settlement offer or pursue your case in court.