Personal Injury

What If the Insurance Company Won't Settle My Injury Claim?

By Carol DiBari, Attorney
When personal injury settlement negotiations with an insurance company hit the proverbial wall, there are others ways to get compensation for your injuries.

Dealing with an insurance company to try to recover damages after a personal injury can be a frustrating experience. Some insurance companies will unnecessarily delay or outright refuse to settle your personal injury claim. If negotiations with an insurance company have broken down, you might think your only other option is to go to court. While lawsuits are frequently the next step taken in an attempt to recover compensation, there are other avenues you might pursue. This article will address the reasons why personal injury settlement negotiations sometimes reach an impasse, and what alternatives might be available to you.

Why the Insurance Company Won’t Settle

Insurance companies are businesses, first and foremost, and settling personal injury claims by paying out large sums of money is usually not good for business. Indeed, most insurance companies aim either to minimize the amount of money paid to you, or not pay you anything at all.

Insurance companies will often delay in the hope that the passage of time will weaken your case (and/or your resolve). The longer the insurance company delays settlement of your claim, the more likely that:

  • the applicable statute of limitations will run out
  • witnesses' memories will fade
  • evidence will be lost or tainted
  • you will take a lesser settlement just to put the matter behind you, or
  • you will give up and abandon your claim.

Insurance companies will also deny claims, hoping that you will not expend the time and energy necessary to file a personal injury lawsuit.

Unfair Settlement Offers and Bad Faith

Sometimes an insurance company will go further than delaying or denying your claim and will act in bad faith by failing to properly respond to, investigate, value or settle a claim. If you think your own insurance company is failing to act in good faith in negotiating an injury settlement, you might consider talking to an attorney about your prospects for a "bad faith" action. But it's a lot tougher to argue "bad faith" if you're dealing with the other side's insurance company. In fact, most states don't recognize a "bad faith" cause of action for claimants who are pursuing a "third party" claim against someone else's insurer.

Available Alternatives

When settlement negotiations break down, your main alternatives are: hiring an attorney; mediation; arbitration; and small claims court.

Hire an Attorney. If you are unable to settle your claim with the insurance company, you may want to get the help of a professional. Most personal injury attorneys work on a contingency fee basis, meaning that they don’t get paid unless you do. However, because attorneys work for a cut of the compensation they secure for you, if your claim is not worth much money, you may not find an attorney willing to take your case. But if you feel certain that you have a strong case worth a significant amount of money, then hiring an experienced personal injury attorney who can aggressively and professionally advocate on your behalf may be a good next step.

Mediation. Mediation is a way to settle your claim outside of court and without having to hire a lawyer (though you can, if you wish). During mediation, a neutral third-party (a mediator) meets with the opposing sides and helps them reach a resolution. Mediations are pretty informal, as the formal court-based rules of evidence do not apply, but the process does result in mutually-agreed upon terms that are then contractually binding on both parties.

Arbitration. Arbitration is similar to mediation, because a neutral third-party (an arbitrator) meets with the parties to resolve the dispute. Arbitration differs from mediation, however, because an arbitrator does not help the parties reach an agreement, but makes a decision after considering all evidence. Whether the arbitrator’s decision is binding on the parties or not depends on the arbitration agreement between the parties.

Small Claims Court. If the insurance company won’t settle with you, you can sue the party who actually caused your injury, in your state's small claims court. Cases in small claims court are capped at a certain dollar amount -- usually somewhere between $5,000 and $10,000 -- and can usually be resolved without lawyers.

Pursuing Your Claim

If the insurance company won’t settle your claim, know that there are other avenues to getting fair compensation for injuries and other losses after an accident. An experienced personal injury attorney can explain your options and make sure your rights are protected if your efforts with the insurance company have reached a dead-end.

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