Personal Injury

Personal Injury Insurance Claims Versus Personal Injury Lawsuits

Reviewed By David Goguen, J.D., University of San Francisco School of Law

Very few personal injury claims go to trial -- less than 5% by some estimates. So what happens to the other personal injury cases? The vast majority reach some form of settlement before trial -- sometimes before a lawsuit is even filed -- but some are essentially over before they really get started. Let's look at some differences between court-based personal injury cases (lawsuits) and injury-related insurance claims, and what to consider when evaluating your case.

What Is an Injury-Related Insurance Claim?

When an accident or some other incident causes an injury, in most situations someone's insurance coverage -- whether that of the injured person or the person responsible for the accident -- will apply to the situation. And in that case, there's a good chance that the injured person's medical bills and other losses stemming from the accident will be fully paid for out of that coverage, up to the dollar limits of the policy.

In many instances, an injury-related insurance claim can be made and be resolved via an agreed-upon settlement without a lawsuit ever getting filed. In other words, many more injury-related insurance claims are filed than actual court-based personal injury cases (lawsuits).

What Is a Personal Injury Lawsuit?

A personal injury lawsuit starts when the injured person (now the "plaintiff") files an initial complaint (a document stating the plaintiff's case) and summons (a document that notifies the "defendant" that they are being sued) with the local branch of their state's civil court. These documents are "served" on the defendant, who has a certain number of days to respond.

If the lawsuit does not reach settlement at any point (keep in mind that settlement can occur at any stage), then the case will reach trial, and a jury will decide whether the defendant is responsible for the plaintiff's accident, and if so, how much to award the plaintiff.

But from the injured person’s perspective, it is important to note that, in many cases, mediation and possibly arbitration are available. In many situations, these procedures are required by court order, contractual terms, or other legal provisions.

Do You Have a Strong Personal Injury Case?

Now we're at the crossroads between personal injury claims and personal injury litigation.

If you think you may have a personal injury claim, you should understand your options. Personal injury attorneys evaluate claims based upon very practical standards. First, the attorney will evaluate liability. Did someone else cause the accident? Such issues can be hotly contested. And in some states, it can be seriously problematic if the plaintiff shares part fault.

Just as important will be the question of liability insurance for the at-fault party, or failing that, available assets to satisfy a judgment. If the at-fault party has no resources to pay a judgment, then even the best personal injury claim will likely not go to trial.

Looking a little closer, there are other distinctions worth noting. For example, the easiest cases to settle are often those where coverage is limited, since liability coverage limits will likely be paid out in any event. These cases should settle very quickly.

In cases where coverage is limited, some liability carriers will offer a settlement that is somewhat short of payout of the full insurance limits. The reasoning here is rather simple. The carrier figures that the injured person’s costs of litigation are, let’s say x. Knowing this, the carrier will offer the liability limits, less x.

In any personal injury case, having an experienced attorney on your side will often provide the assurance that your claim will reach a satisfactory conclusion.

What Is an "Untenable" Personal Injury Claim?

Some personal injury claims are simply untenable from a legal or practical perspective, meaning it doesn't make sense to pursue them, either for the injured party or a lawyer. Typically these cases fall into one of two categories:

  • there are serious questions as to liability (it's not possible to prove that the other party is actually at fault for the underlying accident), or
  • there is no hope for reimbursement for damages.

For example, if an uninsured motorist causes an accident and has no assets, any lawsuit would be fruitless since no assets are available, through insurance or otherwise, to satisfy a judgement against the at-fault party.

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