How Does Car Insurance Work After a Crash

by Vikas Bajaj

After a car accident, whether you are the victim or the driver responsible for the crash, you will need to work through your insurance in order to resolve the financial issues for both parties. In the event that you are the victim of the crash, there will, unfortunately, be more work that you will need to do in order to get the treatment (and more importantly, the compensation) that you deserve. Insurance companies operate with the goal of making as much money as possible, and in an industry where they pay money out to victims, this is done by paying as little as possible for settlements, no matter the details. Your accident will be no different, regardless of the rapport you feel that you may have with the adjuster assigned to your case, and no matter how clear your damages may be.

Working with a personal injury attorney is one of the most important steps that you can take in the early days following an accident so that you can build a compelling and legally-sound case for the maximum damages that you are owed. As you will see below, the processes that go into motion the moment an insurance company learns of an accident are stacked against your favor, and designed specifically to reach a low settlement while still avoiding any future legal issues for either the insurance company or their client relating to this crash.

Contacting the Insurance Company

If the other driver was at fault for the crash, you will contact your own insurance as well as theirs in order to initiate a claim. The claim is initiated with their insurance, at which point a claims adjuster is assigned to your case on who works for the responsible driver’s insurance company. They will spend the coming days or weeks researching all of the relevant details of your accident, ostensibly in order to ensure that you get all of the money you are entitled to, but in reality, looking for as many ways as possible to poke holes in your claim and reduce your settlement amount. 

The Insurance Claims Investigation

Once the claim starts, you will be in direct contact with the adjuster (unless you have a car accident attorney – they will handle most of these communications on your behalf) as they try to piece together the details of the crash. They will need statements about your side of the story such as how the crash happened, what the other driver was doing if you could have done anything to avoid the accident and more. An adjuster is trained to analyze these statements and find ways to twist your words against you, such as mentioning that if you had swerved, you may have avoided a head-on collision, and using that as you accepting partial fault. Your attorney knows these tricks, and will not fall prey to them.

In addition, they will need copies of medical records and financial statements that support your claims for economic damages, and likely will need to go through an independent medical examination to confirm the injuries that you claim. However, remember that the doctor you will be visiting is not truly independent – they are contracted on behalf of the insurance company and will be looking for ways to downplay your injuries. Your attorney will be able to coach you through this exam. There are a host of other damages that you will suffer following a car accident that they will likely not ask for proof of, because they will try to avoid bringing attention to them at all. 

Your Attorney’s Investigation

At the same time that the insurance company is performing its investigation, your attorney will perform their own in order to have a complete counter-offer prepared once the insurance company makes the initial settlement offer. They will help you go through all of the damages that you have suffered, both economic and non-economic, to ensure that you are not financially burdened by someone else’s reckless or negligent driving behavior once this claim is resolved. Throughout these concurrent investigations, you may begin to notice where the discrepancies lie just in the differences between the types and amount of information your attorney needs versus the amount that the insurance company needs. This is because your lawyer is looking at every way that you have been impacted, while the insurance adjuster is looking for the most obvious ways, in hopes that you do not know what damages you are truly entitled to.

Initial Settlement Offer

Once the insurance adjuster concludes their investigation, they will return to you shortly with a settlement offer. This offer is typically a one-time lump sum, and in order to receive it, you will need to waive your rights to any additional legal action against the insurance company or the at-fault driver for anything relating to this crash, even if new information were to arise. The difference between this settlement offer and the calculations that your attorney has arrived at will be shocking, and at this point, it becomes very clear why working with an attorney is so important through this process. 

Counter-offer and Negotiations

Your attorney will make a counter-offer to the insurance company, and negotiations will begin in an attempt to close the gap between their offer and yours. You and your attorney will be able to work together in order to identify the amount that you are willing to settle for, and will also discuss when you may decide to file a lawsuit instead of attempting to settle. Because trials are long, time-consuming, and costly, the amount that you will typically settle for is less than what you may be awarded at the end of a trial, but it will save you many long, arduous steps such as depositions, testimonies, and more. If your attorney believes that your case is likely to be awarded punitive damages in a significant amount by a judge or jury, though, then they may suggest that you go straight for a lawsuit instead of attempting negotiations at all. However, punitive damages are rare and are awarded solely by a judge or jury at the end of a trial for situations that are particularly egregious and have defendants that are financially able to pay these additional damages.

Settlement or Lawsuit

As the negotiations move forward, you and your attorney will be able to continuously check in on where the discussions are at the moment, and whether or not you should push forward with negotiations or move to file an official complaint with the courts. The calculations that dictate these decisions will be between you and your attorney, so at every step of the way, you will have a clear understanding of where your case is, where it is headed, and how it is going. 

Once your case is resolved, your car accident lawyer will take their contingency fee, you will pay your insurance for the compensation that they are entitled to following a settlement or award, and you will collect the remainder of the payment so that you can move forward with your life.