Want to Settle Your Own Accident Claim? Should You?
A standard “lawyer answer” to most legal questions is “well, it depends.” It’s an annoying answer, but it’s the correct one.
Many people involved in accidents which give rise to personal injury claims wonder if they should try to settle their own case before hiring a lawyer. Will they personally recover more money by negotiating with the insurance company directly, thereby avoiding paying attorney’s fees and costs? Being a lawyer, of course I can’t give a straight and simple answer to this question. It’s not because I don’t want to. It’s because there are a lot of factors which affect whether your case is one which can be reasonably settled without hiring a lawyer. So, instead of a simple (and therefore, wrong) answer, I’ll discuss the various issues which should affect your decision.
Should You Settle Your Own Case? Factors Which Weigh Against Trying It
If your case is relatively straight forward, and your medical bills are low because you had minimal or no injuries, you should be able to settle your case on your own. But! Calling and discussing your case with a lawyer shouldn’t cost you anything, so feel free to call multiple law offices to get an opinion on your case.
If your case is more complicated than one with very minor injuries, I would not suggest trying to settle it on your own, or at the very least until you discuss the case with an attorney.
Serious car accidents, medical malpractice, product liability cases and cases against government agencies (for example, car accidents and slip & falls involving a governmental entity) usually require the experience of a lawyer. Not only do they involve complicated areas of the law which can confuse even attorneys who don’t specialize in that area, they usually have hidden dangers, such as shorter statutes of limitations, caps on damages, or procedural requirements (Governmental Tort Claim notice, or expert witness requirements) which must be satisfied in a short period of time to preserve your right to sue. Leave these types of cases to the lawyers, particularly lawyers who are well versed in those areas of the law.
Cases Which I Strongly Urge You Not to Try to Settle Your Own
Like I mentioned above: Even if you don’t plan on hiring a lawyer, take advantage of talking with one for free. Sorry for the double negative sentence, but I’m not aware of any personal injury law firms in Oklahoma City that do not offer free consultations.
Even assuming your case is more of a “run-of-the-mill” type personal injury claim, that doesn’t necessarily mean you should try to settle it yourself. Some factors which weigh against you trying to settle a case on your own:
The Defendant denies liability (fault) for the accident or alleges that you are also at fault.
Generally speaking, if the defendant has a liability defense, the case is much harder to settle. If the insurer thinks that it has a chance of winning outright at trial (getting a defense verdict) this is especially true. This is true to a lesser extent in “comparative fault” cases, such as car accidents in which the defendant claims that you weren’t wearing your seat belt or slip & fall cases in which the defendant claims that the hazard was an “open and obvious” condition. Lawyers have a very hard time settling cases involving disputed liability without first having to file a lawsuit. Expect it to be at least as difficult, if not impossible, for you to do it on your own. If you attempt settlement negotiations and the insurer raises these issues, know that it’s highly unlikely the insurance company will offer you a fair settlement.
There is more than one Defendant.
Cases involving multiple defendants, like a multi-car accident or a premises liability case that may involve not only the property owner, but also an outside maintenance company and/or manufacturer (such as a case involving a faulty elevator) are examples of this. In cases which truly involve multiple defendants who may have varying levels of liability, I’d suggest hiring a lawyer. They tend to be too complicated for a lay person to handle. A garden variety car accident case with multiple defendants will oftentimes require a mediation just to get the multiple insurance companies to make an offer.
Your claim also involves a related workers compensation claim.
If you are injured by a third party (not a co-worker) while in the course and scope of your employment — say you get in a car accident while driving somewhere for work — you will have both a workers compensation claim and a personal injury claim. These types of cases have numerous pitfalls which most people would have a hard time handling. The reimbursement of the workers compensation carrier and the fact that your workers compensation doctors will likely be biased against you (and therefore hurt your personal injury claim) are issues that are usually better left for a lawyer to navigate.
Other Factors to Consider When Deciding Whether to Settle Your Own Case
While I consider the above-listed items to be “red flags” when it comes to trying to settle your own case, there are some other factors which should be considered:
The amount of money that is at stake.
The value of your case will be influenced not only by the extent of your injuries, but also by the amount of available insurance coverage. Generally speaking, the more money that’s at stake, the more likely it is that you’d be better served by having a lawyer. An exception to this rule is the unfortunate circumstance in which the value of your injuries clearly exceeds the amount of insurance coverage available. If you’ve got $40,000.00 in medical bills from a “clear liability” accident and there’s only $25,000.00 in insurance coverage, hiring a lawyer may not increase the recovery for you. However, a law firm should be able to get your medical bills reduced if you are unsuccessful handling the bill reductions.
Your level of comfort in tackling settlement negotiations.
Some people just don’t like negotiating. My wife sent me to the car dealership when she wanted a new minivan. She had zero interest in negotiating with the car salespeople. I made sure my phone was charged ahead of time, but I kind of enjoyed staying there until after closing time to “get the math to work.”
If you think you’re bad at negotiating, or simply do not want to handle it, or if you’d just rather not have to deal with the headache, hire a lawyer. I often tell people “your priority is on getting your health back, and communicating with your doctor – let me worry about the insurance companies.”
Don’t try to be something you’re not just to try to save a few bucks or to impress a loved one who may be pressuring you to try to handle the case yourself. Yes, you can screw up so badly in your settlement attempt that no lawyer will want your case afterwards (you shouldn’t screw up this badly, but you know what they say about free advice). You should only try to settle your case if you truly feel comfortable about it.
Settlement negotiations in a personal injury case are not the same as negotiations over the price of a used car. It is a more drawn out process which involves skill not only in determining how much you should move with each offer, but also in arguing (without being argumentative or confrontational) the merits of your case. I’m not saying you need to be a genius who was captain of your high school debate team (most lawyers aren’t), but you do need solid communication skills and confidence in your ability to negotiate.
Another simple piece of advice is if you are negotiating your own claim: Getting mad at the insurance adjuster is not going to help your case. Know that the insurance adjuster isn’t taking your claim personally. They don’t care what you went through, but at the same time, the adjuster would prefer to get the file out of their hands. Also, it depends on the insurance company, but most companies have more experienced adjusters handle cases after a lawsuit has been filed on a claim. It’s not always the case, but most of the time, filing a lawsuit will increase the settlement offer of the insurance company.
Would Hiring a Lawyer Result in a Larger Settlement?
In most personal injury cases where the defendant is properly insured, having a lawyer will be able to get a larger settlement. I think the biggest reason for this is simply due to the fact that the insurer expects the lawyer to immediately file a lawsuit if he or she can’t settle the case through pre-suit negotiations. If an adjuster is negotiating with someone that does not have an attorney, what happens if the claim doesn’t get settled? Nothing.
Aside from their experience in handling settlements, it is the imminent threat of a lawsuit that gives attorneys a distinct advantage over non-lawyers. Insurance studies show the payouts can be as much as three times higher when an attorney is involved.
That being said, your goal in trying to settle your own accident case is not to meet or exceed the gross settlement amount an attorney would get. You are only concerned with the net settlement amount you receive (the money which goes directly in your pocket). You need to only achieve a gross settlement of more than 66% (the typical pre-lawsuit attorney fee being a 1/3 fee) of what a lawyer would have gotten you to achieve a higher net settlement amount.
For example, if a lawyer could settle your case for $20,000.00, you need to only settle for more than $13,333.33 to personally get more money by settling on your own. That’s a pretty big incentive to try to settle your own case. That’s assuming the attorney you hire charges a 1/3 contingency fee. But, the math also gets better for the client if the attorney is successful in negotiating a higher settlement, and getting the medical bills reduced.
Want to Settle Your Own Accident Claim? Prep Work
Assuming you’ve read everything above, and decided that you still want to try to settle your own accident claim, here are some suggestions for how to proceed. Always keep in mind that your attempt to settle may fail and you may wind up having to hire a lawyer to sue the defendant. Therefore, you want to be sure that you don’t do anything which may damage your case to such an extent that no lawyer will want to take it after your settlement attempt.
Settling Your Own Accident Case — Before You Start, Know Your “Limitations”
The absolute first thing you should do if you want to try to settle your own accident case is to find out the statute of limitations (the date by which you must file a lawsuit) for your claim. In general, the statute of limitations in Oklahoma is two years from the date of the injury. But, this varies if a governmental entity is involved.
While it may seem like the statute of limitations for your claim gives you plenty of time to negotiate a settlement, you must remember that you’ll need to leave a certain period of time left, in case your negotiations go badly, to allow you to hire a lawyer. You’ll have a much easier time finding a lawyer if your case has a year left on its statute of limitations than if it only has a few days. The attorney will need time to get your case file together, and get the proper defendant(s) served.
Settling Your Own Accident Case — Do Not Jump the Gun
While I realize that one of the reasons you want to try to settle your own case is to possibly get your money faster than you would if you hired a lawyer, do not try to settle your case before it is ready. Do not make any settlement offers before you have finished treating or reached MMI. The insurance company will not do “partial settlements” on your injury claim.
Once you sign that settlement release, you can’t ask for more money later. This will require a great deal of patience on your part, as it may require you to wait upwards of a year (or more) before you try to settle, but it is necessary to ensure that you are fully compensated.
If you don’t wait until you are through with your medical treatment,, you cannot reasonably calculate how much your case is worth. It is common for medical treatment to not go as planned. People recover with physical therapy at different rates, and sometimes it takes a while for the doctor to diagnose something that requires surgery. Unless there is something like a broken bone, most doctors will start with conservative therapy. You want to know that all possible medical complications are behind you before making a settlement offer. If you don’t, you risk settling for far less than your case is worth – and, worse, with future medical bills to pay that should have been covered by the defendant’s insurance company.
Contacting the Defendant’s Insurer Before You’re Ready to Talk Settlement
It is very likely that if you don’t contact the defendant’s insurer shortly after the accident, it will contact you. The adjuster will likely be pushy and eager to learn about your claim and start trading settlement offers. Until you’re ready to make an offer, which will most likely be many months after the accident (it really depends on your injuries, your doctors, and when you recover), politely decline to engage in discussions about the case or talk settlement.
Do not give a recorded statement. Do not give the insurer a release to get your medical records or wage information.
Let the adjuster know that you will make a settlement demand and provide all relevant documentation only after you have recovered from the injury. Exception: if you have a car accident case that includes a UM claim, you will need to give a statement and provide the requested documentation to your UM insurer (and only your UM insurer, not the other driver’s liability insurer). Your insurance company, under your policy, has a duty to deal fairly with you.
The only thing you want from the adjuster at this point is the claim number and policy limit information for the defendant. You want this in writing, in the form of the “declarations sheet” (a/k/a “dec sheet”) for the policy. Some states require the insurer to give you this by law; some states, like Oklahoma, do not. For those that do not, the insurer will sometimes provide this information anyway in the interests of trying to settle the case. If you’re in a state that doesn’t require liability policy limit disclosure and the insurer won’t provide the information to you, you can still try to settle your case, but it will be harder. You may just want to hire a lawyer if that happens.
Oklahoma does not require the policy limits information until after a lawsuit has been filed.
Things You Should Gather Before You Make Your First Settlement Offer
Your first settlement offer should be in writing, in the form of a demand letter. It should be accompanied by all of the documentation that supports your claim. This includes your medical records and medical bills from all relevant medical providers. If you have documentation to support a wage loss claim, such as pay stubs from before the accident and anything showing that you missed work afterward, that should be included with your demand. If it’s a car accident case, you need to get a copy of the Traffic Collision Report, which should also be included. If there were witnesses to your accident, see if you can obtain written witness statements, along with their contact information.
For your own benefit (not necessarily to include with your demand letter), if you used health insurance to pay for your accident-related treatment you should request subrogation information from your health insurer. This is an itemized listing of all payments your insurer made for accident-related medical treatment. You need this in order to know how much you’ll have to pay back to your health insurer from the settlement of your accident claim. You can get this information by calling your health insurer’s subrogation department.
You should also make a list of all of your out-of-pocket medical expenses, such as co-pays, over-the-counter medications, orthopedic braces, hot/cold packs, crutches, bandages, etc. You should gather your receipts for these items, even though I really don’t suggest including them with your demand letter. This is more for your personal use in preparing the demand, or for if the insurer requests that you support your claimed expenses (usually these are a drop in the bucket compared with your other medical costs, so it’s not an issue).
If you have any photographs that are relevant to the accident or your injuries, such as pictures of your damaged automobile or of any visible injuries to your body, make copies of these to include with your demand. If your case was a slip and fall, you can take pictures of the shoes you were wearing (assuming they are sensible and actually help your case) at the time of the accident. If the slip involved a liquid which got on your clothing, any photos which show the wet clothing are helpful. If you fell due to a hidden hazard, such as uneven pavement, that will show up on a photograph, take pictures of that.