Occasionally, personal injury claims don't reach settlement. Either the adjuster won't raise their offer to meet a claimant's demand, or vice versa. Most claimants think the only next step is filing a lawsuit, and often this is the case, but not always.
If, despite trying your hardest to settle your claim with the adjuster, it just won't happen, there are alternate means of resolving the impasse. Four of the most common alternatives are hiring an attorney, mediation, arbitration, and small claims court.
If it's been several weeks, and you've gone back and forth with the adjuster numerous times without making any headway, it may be time to consider an alternate means of resolving your claim. Common situations when you may need to consider an alternative include the following:
You may notice some of these situations border on bad faith negotiating tactics. If you think the insurance company is acting in bad faith, you should consult an attorney and/or file a complaint with your state insurance board.
When you can't settle your claim with the insurance company, often the best option is to retain legal counsel. Most personal injury attorneys work on a contingency fee basis. This means if they accept your case, they won't get any fee unless they first get money for you. Attorney fees range between 33 and 40 percent, depending on if the case goes to trial.
Most negligence lawyers don't charge an initial fee for office consultations. At the very least, you'll be able to get a free professional opinion, which will help you make an informed decision about how to proceed with your case.
Minor Injury Claims
There are some points to consider before retaining an attorney. If your claim is only worth a few thousand dollars, you may have a difficult time finding an attorney to accept it. In a minor injury claim, the time, effort, and costs an attorney has to invest isn't worth the minimal fee they'll receive.
An attorney has to pay the costs of preparing your claim out of her own pocket, and she'll only recover those amounts if she wins. An experienced attorney will approximate the costs of preparing a claim before accepting it. Like any other businessperson, an attorney must be able to make a profit.
If your claim has merit and is worth a substantial amount, hiring an attorney is probably the right decision. Experienced attorneys almost always get higher settlements than inexperienced claimants. And if you've been seriously injured, the stakes are too high to risk handling the case yourself.
Mediation is an excellent alternative to filing a lawsuit, especially when hiring an attorney isn't an option. Mediation is a fairly simple process that requires no legal expertise. It's a way of settling your claim outside of the court system.
Insurance companies don't like lawsuits. They're expensive, and most insurance companies have to pay private defense attorneys by the hour to represent them. If your negotiating strategies haven't worked and you don't want to file a lawsuit, you can let the adjuster know you'd be open to mediation.
What is mediation?
A mediation is a relatively informal dialogue between you and the insurance company. A neutral third-party (called a "mediator") is chosen by you and the company. Mediators are often experienced attorneys or retired judges. You and the insurance company's representative will meet at the mediator's office or some other neutral ground.
The mediator will listen to your side of the story, then present your demands to the insurance company. He'll then go back and forth between both parties trying to reach an agreement. Although you can have a lawyer with you, it's not required.
The mediator's job is to interpret the information from both sides and help prompt a settlement everyone can live with. The proceedings are quite informal and the rules of evidence aren't applied. A successful mediator eliminates as many boundaries as possible, and works out a mutually agreeable settlement.
We discuss arbitration much more thoroughly later on, but it's an option you should be aware of. Arbitration is similar to mediation in that a neutral third-party (in this case called an "arbitrator") is brought in to help resolve the impasse between you and the insurance company.
The difference is, instead of helping both sides come to an agreement, the arbitrator will simply make a decision. Depending on the arbitration agreement between you and the insurance company, the decision can be binding or non-binding.
Small claims courts are designed to settle disputes without the need for lawyers. These courts have limited jurisdiction, which means the maximum monetary awards are quite low. Monetary limits in small claims courts usually range between $1,500 and $5,000, but can be as high as $15,000. The specific amount depends on the state where the court is located.
Filing fees in small claims court are nominal, and the time it takes to get to trial is much quicker than higher courts. Although you have the right to be represented by a lawyer in most states, the limited jurisdictional amounts keeps most injury lawyers away.
You won't sue the insurance company directly, but rather the at-fault party who caused your injury. If the at-fault party is represented by his insurance company's attorney, you may be in trouble. Although judges in small claims court are only supposed to decide a case based on the facts, a good defense attorney can present a much better case than a layperson.
If your damages are higher than the small claim court's monetary limit, you must hire a personal injury attorney to represent you. If you go to a higher court without an attorney, you'll most likely not only lose your case, but wind up having to pay the insurance company's attorney's fees and court costs as well.
Negotiations Fail Due to Lack of Evidence of Serious Injury
In this case, the plaintiff is seeking damages sustained as a result of an auto accident, but he does not sufficiently prove he suffered a serious injury. Negotiations with the insurance company's claims adjuster break down, and he files a lawsuit.
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