There are reputable liability insurers, and then there are the others. Our personal injury lawyers know which insurance companies require a lawsuit to get their attention. They’ll deny, delay and defend, so lawsuits may be the only way to get fair compensation for our clients. Other insurance companies take a more reasonable approach when they know that their policyholder was liable for an accident involving injuries. Sometimes we can reach a full and fair settlement with these insurance companies through a claim without ever having to walk up the courthouse stairs. Here’s a basic look at how the personal injury claims process works.
The letter of representation
Upon being retained, an attorney may forward a notice of representation to the insurer of the person responsible for the accident; most attorneys will do this by certified mail. An adjuster for the insurance company will respond and acknowledge an attorney’s representation of their client. The adjuster may also ask for copies of any medical bills, records or reports involved in the case.
Gathering the evidence
It is important that an attorney receives updates from their client on his or her current treatment and any new treating physicians or clinics. Usually, an attorney has already obtained medical authorizations from the client, so copies of medical bills, records, reports or the like may be obtained. When an attorney compiles these documents, they may photocopy and forward them to the adjuster.
The demand letter
After the client has been discharged from treatment, an attorney may obtain the final bills, records, reports and evidence of lost earnings resulting from the accident. This is when a complete and final assessment of the case can be made. Any issues of the client’s own comparative negligence are given due consideration in estimating the value of the case. A final medical report involving the nature and extent of the client’s injuries might be obtained from his or her treating physician. All final bills, records, reports and evidence of lost earnings are sent to the insurer with a demand for settlement at a specified sum of money.
Numerous discussions may be held between an attorney and the adjuster regarding the value of the case and settlement. Experienced personal injury attorneys are required to advise their client of any settlement offers from the insurer, and they will ordinarily recommend or not recommend settling at a certain amount. Regardless of legal recommendations, if a client wants to settle on an insurer’s offer, attorneys are required to settle the case.
If a settlement is reached, the insurance adjuster forwards a release of claims to be signed by the client and witnesses. The release discharges the insured person from any future claims, suits or demands related to the accident. Some insurers forward the settlement check with the release, while others wait for the signed and witnessed release to arrive before forwarding the settlement check. In accordance with a settlement statement that the client also signs, attorneys are paid pursuant to the retainer agreement with the client, costs advanced on the client’s behalf are reimbursed, any lien claimants are paid, and the client receives his or her net proceeds from settlement. As per the Internal Revenue Service, these proceeds are usually tax free since they’re treated as compensation for damages as opposed to income.
If the case doesn’t settle, the file may already be prepared for litigation. In this case, the lawsuit may need only be drafted, filed and served. This is when the actual litigation process begins.
Thanks to our friends and co-contributors from Cohen & Cohen, P.C. for their added insight into personal injury claims process.