Your attorney calls to say they have reached a car accident settlement. Now you’re wondering how they decided on the amount. Should you accept the offer or go to trial?
Only about 4% of personal injury lawsuits go to trial. Every year there are about 5.5 million car accidents in the U.S., resulting in about 40,000 fatalities and 3 million injuries.
Winning a personal injury case at trial with a jury or judge’s decision is almost equal. Fifty-six percent of judges and 51% of juries favor the plaintiff. Trials are risky, and you may walk away with nothing.
When you accept a settlement, you have a guaranteed “win.” If your car accident attorney can secure an out-of-court settlement for your claim, that is the most secure resolution.
Keep reading to learn how the amount of compensation is determined, how long it takes to settle, and why it is essential to hire a lawyer to assist with the process.
Who Is Responsible for Costs?
Arizona is an at-fault state. This means that in a car accident, the insurance company of the driver at fault must pay the compensation claim for vehicle damage. They must also pay the other driver’s personal injury claim.
Determining fault isn’t always straightforward. The insurance company may deny you payment, claiming you are partially at fault in the accident. This is because Arizona is a comparative negligence state.
Comparative negligence means that if you are partially at fault in the accident, your compensation is reduced by your percentage of fault.
For example, a jury awards you $275,000 in damages but finds you 30% at fault for the accident. The damages award is reduced by 30%, and you receive $192,500.
Insurance companies collect premiums to make money, not pay settlements. They may offer you a settlement shortly after the accident. This is likely to happen if they know you have severe and costly injuries.
They are hoping you will agree to a fast settlement. Insurance company settlement offers are often far below what you need to cover your lost wages, medical bills, and rehabilitation.
If you receive a settlement offer, speak with a personal injury claim lawyer before accepting the offer. The lawyer can determine whether the insurance company’s offer is comparable to your injuries. They will analyze your case, considering the numerous factors that determine compensation.
One of the key factors when assessing compensation is the severity of your injuries and the impact they will have on your future life. In addition to medical bills from the immediate emergency treatment, you must consider the cost of rehabilitation, physical therapy, and whether you will need ongoing pain management.
You may be unable to work during your recovery. Will your injuries prevent you from working in the future? Will you be able to return to the same line of work after you heal?
These are things your attorney considers when negotiating a settlement. What is the life-long impact of your injuries on your ability to live as you did before the accident? Will you still be able to enjoy fun activities like downhill skiing, hiking, or tennis?
A mild TBI (traumatic brain injury) may result in temporary problems. If severe, it may affect your ability to conduct everyday activities such as paying bills, driving, reading, and more.
The long-term prognosis of a full recovery is something your attorney will request from your medical providers. The long-term prognosis states what impact the injury will have on your life. This is an essential factor in negotiating fair compensation.
Other elements when determining a settlement amount include who is at fault in the accident, the financial losses you have incurred, future medical expenses, non-financial compensation for pain and suffering, loss of consortium, and more.
Calculations often rely on experts to determine the average compensation amount for each factor based on the specifics of your claim. Keeping all bills, including those for replacement services and loss of income, is crucial. Ensure your attorney has a copy of all expenses to negotiate your settlement.
What Are Replacement Services?
Replacement services are tasks you hire someone to do because your injuries prevent you from performing those responsibilities. This may include cooking meals, doing laundry, cleaning the house, child care, and other similar household activities. These are items connected to your personal life, not work.
How Long Does a Car Accident Settlement Take?
You only receive one settlement, so don’t rush your attorney into making a deal before they have all the facts. They must wait to learn about your ability to recover from your injuries and how they will impact your life in the future.
If you are undergoing a lengthy recovery, your lawyer may delay filing the lawsuit until just before the statute of limitations expires. Your medical prognosis will impact their requests for compensation in the complaint.
Other factors that may lengthen the time it takes to settle include the opposing party not being cooperative about settling, legal facts needing review, the other party denying any responsibility, or missing pertinent information.
Insurance companies sometimes use delay tactics, hoping you will accept a lower amount. This tactic benefits them because the lower amount often doesn’t cover your expenses.
On average, expect between nine and eighteen months to reach a resolution. It isn’t easy to estimate because of the various factors that make each case unique. Some cases settle faster, and some take longer.
When You Hire an Attorney
The sooner you hire an attorney, the faster they can begin working on your case. If you have a 12-month recovery and don’t contact an attorney until your care is complete, this slows the process.
If you or a family member contact an attorney soon after the accident, they can begin working on your case while you concentrate on healing. Even if the attorney needs to wait for a final medical evaluation, they can begin gathering evidence and start negotiations.
During the consultation, your attorney will give you an initial estimate of how much compensation you may receive. They will only have a final calculation of your case worth once they collect all evidence.
In their calculations, your attorney will use documentation supporting your financial losses, including medical bills, wage loss verifications, and receipts for out-of-pocket expenses.
The average time for an attorney to complete a case analysis is two-four months. It may take longer, depending on the extent of your injuries.
One of your attorney’s first steps will be sending the other driver’s insurance company a Demand Letter. This informs them you are suffering damages because of their client’s negligent behavior and demands damages be paid.
Arizona law allows insurance companies 40 days to settle a claim once it is filed. They must also meet the following legal obligations:
- Acknowledge the Claim within ten days and send policyholder paperwork and instructions
- Decide on the claim within 15 days of receiving proof-of-loss forms
- Make a final payment on an approved claim within 15 days
Even though the law sets forth a time frame, settlement may take longer if there are serious injuries, the insurance company denies the claim, or there is ongoing litigation.
File a Lawsuit
If your attorney cannot negotiate a settlement with the insurance company, they will file a lawsuit against the other driver. The time frame for a case is generally between six months to two years.
There are various time allowances under the law for the defendant to respond, discovery to take place, negotiations, and more before the matter goes to trial.
Why Do I Need a Lawyer?
Lawyers are familiar with the legal requirements and obligations of insurance companies. They know traffic and personal injury laws and how they impact your case. Attorneys know your lifetime prognosis affects how much compensation you receive.
Once you hire a car accident attorney, they will begin working on your case. This includes gathering evidence and negotiating with the insurance company.
Your attorney will review all evidence they gather, including photographs, medical records, witness statements, accident reconstruction, and medical experts necessary for building your case. Settling is preferable, but they will have evidence on hand if the matter goes to trial.
In Arizona, the day of the accident begins the countdown of two years under Arizona Revised Statutes, §12-542. If the Arizona Statute of Limitations draws close, they will file a lawsuit against the other driver for negligence. If you file a lawsuit even one day late, the court will likely dismiss your case as untimely.
Filing a Negligence Lawsuit
When filing a car accident lawsuit, the usual claim is for negligence. The pleadings must state the four elements of negligence and explain how your case meets those requirements.
The elements require showing that the other driver had a duty of care to operate their vehicle safely and prudently. That they breached their responsibility and that their negligent behavior was the cause of the accident.
The attorney will state that you sustain injuries because of the defendant’s negligent behavior and are incurring damages due to those injuries. They will then list what those damages are and their minimum amounts.
At the end of the complaint, the attorney will list prayers for relief. These include what actions they want the court to take, including awarding you damages of a minimum amount.
The attorney does not specify a set dollar amount. They leave the amount open so the judge or jury can award what they deem appropriate for non-financial damages such as pain and suffering.
Once the parties agree on a settlement, the agreement is put into writing. All parties and their respective attorneys sign the settlement agreement. It will specify the following:
- The amount of compensation
- Deadline for payment
- Release the defendant from future claims of compensation for this accident
You may need to sign a Release of All Claims Form in addition to the settlement agreement.
Release of All Claims Form
Release of all Claims is a form an Arizona insurance companies request you sign. The document’s purpose is to absolve the insurance company of responsibility for all future liability on your claim.
By signing the form, you agree never to request any further compensation for your accident. You should only sign this form after discussing its contents with your attorney. There may be instances where an attorney advises a client not to sign the document.
Putting the Settlement on the Record
After the settlement is signed, your attorney will notify the court that the parties have settled. They will make arrangements to put the settlement on the court record. This ensures it is enforceable if the other party defaults on their obligations.
When Will I Get My Money?
A settlement agreement or court ruling will usually specify a period in which the defendant must pay the compensation. This is generally within 30 days.
The check will go to your attorney. They will place it into their IOLTA (Interest on Lawyer Trust Accounts) account for disbursement.
The attorney must ensure all outstanding medical bills, liens, expert witness fees, etc., are paid in full before disbursement. The attorney will also collect their fees.
Once payment of attorney fees and bills is complete, you will receive the remaining funds. You will also receive a copy of the accounting. Disbursements are generally made once the check has cleared the bank.
No Fee Unless You Win
Contingency Attorney Fees are paid to the attorney after they win your case. This provides you with the benefit of receiving legal help even if you do not have the funds to pay an attorney.
The fee specifics are in the written contract you sign when hiring the lawyer. It will provide you with the percentage of your winnings they will receive. It also includes any office expenses they may deduct.
You will receive an accounting of all disbursements with your check. The standard contingency fee is 33.3%. If you receive a settlement of $300,000, your accounting may be similar to the following:
$ 99,000—Attorney fees of 33.3%
$ 500—Medical records
$ 1,250—Deposition and transcript fees
$ 2,150—Medical expert fees
$ 250—Miscellaneous office expenses (postage, copy fees, etc.)
$103,150—Total costs and fees
$300,000 – $103,150 = 196,850 remaining compensation for you.
These figures are fictional and do not represent the costs you may have in your case.
Find a Phoenix Car Accident Lawyer
Get the legal help you need to receive a car accident settlement comparable to your car accident injuries. Call the Phoneix office of Sweet Lawyers at (602) 610-6101. We will begin the process of gathering evidence and building your case.
We offer 100% free consultations, have a 98% success rate, and there is no fee unless we win your case. Contact us today; you have nothing to lose and a lot of compensation to gain.