If you have been in a car accident caused by someone else, you may know you are entitled to compensation, but you may not know how much. Without understanding what you are entitled to, you will likely receive far less compensation than you deserve.
Additionally, without a thorough understanding of the compensation process, you will likely get a substandard payout for your injuries and losses.
In every case, the most optimal way to truly get a worthy car accident settlement is to hire an experienced car accident lawyer.
Understanding the Settlement Process
Before asking for any amount of compensation, it is important to know some important characteristics of the settlement process.
It Is Not Victim-Friendly
The car accident compensation process exists to put money in the hands of deserving victims. However, the process is in no way victim-friendly. If it were, car accident victims would not have to fight so hard to recover the compensation they need for their injuries and losses.
It Is a Negotiation
One aspect of the settlement process that surprises car accident victims is that it is largely a negotiation. In other words, an offer from an insurance company is not the final story. Unfortunately, many victims unfamiliar with the process take the first offer they receive and end up leaving significant compensation on the table.
Victims With Lawyers Get More Money
An experienced car accident lawyer is adept at navigating the car accident compensation process and knows how to fight to get substantial compensation awards for their clients. Hence, a claimant with an attorney representing them is more likely to get more money than a claimant without a lawyer.
“Damages” refers to the compensation awarded to a claimant to mitigate losses from a car accident. The damages for these losses are categorized as either economic or non-economic.
Economic damages refers to compensation for the losses that have a direct financial impact on a victim’s life. In New York, a no-fault insurance state, drivers injured in a car accident must seek economic damages from their own insurance company—at least at first.
Car accident victims may be able to recover all kinds of economic damages, including:
- Medical costs
- Loss of income
- Diminished earning capacity
- Loss of property
- Death benefits of up to $2,000 in the event of a fatality
Regarding medical costs, a car accident victim can face significant medical expenses due to their injuries, including ambulance rides, hospital stays, and short- and long-term medical care. Factor in physical therapy and prescription costs, and a victim could spend a small fortune in medical care for their injuries, even with insurance.
Regarding the loss of income and diminished earning capacity, car accident victims typically lose the ability, either temporarily or permanently, to make money as they had before their accident. As a result, they struggle desperately to make ends meet while trying to recover from their injuries.
Fortunately, in a compensation claim, victims can seek damages for loss of income and diminished earning capacity. However, when drivers seek compensation for lost wages from their personal injury protection insurance, they can seek only 80 percent of their lost wages. Additionally, there is a cap of $2,000 per month for up to three years.
However, New York does not limit accident victims to their personal injury protection insurance. Under certain circumstances, a driver may also file a claim against the at-fault driver’s insurance company for the remaining 20 percent of lost wages and payment of lost wages beyond the cap.
Property loss is another economic damage you may claim after a car accident. If your car is damaged or totaled, you can seek compensation for repairs or replacement of the car.
You can also seek compensation for personal property that you have lost as a result of the accident. However, you will not seek compensation from your PIP insurance for property damage but from the other driver’s insurance company.
Other economic losses you might suffer due to a car accident include paying for adjustments to your home or car to accommodate your injury and spending money on homecare services to help you handle the day-to-day chores that keep your household together.
Non-economic losses don’t have a financial component, at least not directly. They are intangible losses that have a substantial negative impact on your life. When seeking compensation for these losses, it is important to remember that your personal injury protection insurance does not cover non-economic damages.
Because a driver’s PIP does not provide non-economic damages, an accident victim must make a claim against the at-fault driver’s insurance company to recover them.
Possible non-economic damages in New York State include:
- Physical pain and suffering
- Emotional anguish
- Emotional distress, such as PTSD
- Disfigurement or permanent disability
- Loss of consortium
- Loss of enjoyment of life
Because these losses do not come with built-in price tags, their value must be calculated. But how do you determine how much compensation a person should be paid for emotional distress?
Attorneys, insurance companies, and the courts typically use one of two methods to reach a dollar value for economic damages.
One is the multiplier method—it takes the total economic damages and multiplies that figure by a number typically between 1.5 and 5. The more serious the injury, the higher the number used with this method.
The second method used to determine non-economic damages is the per diem method. This method gives victims a dollar amount, often calculated using a person’s wages or income.
Contacting Your Insurance Company for Compensation
When it comes time to seek compensation, you must communicate with the insurance company handling your claim.
The initial communication typically begins with a demand letter in which you inform your personal injury protection insurance company of the following information regarding your case:
- The facts of your case
- Why the defendant is liable
- A list of your injuries and how they have affected your life
- A breakdown of the compensation you are seeking for each compensable loss
Once the insurance company receives your letter, it will likely respond with a counteroffer far below what you requested.
How Much You Should Ask for Initially?
As mentioned, how much you ask for initially depends heavily on the extent of your losses. Additionally, because the insurance company will probably counter with an amount well below your demand, it is usually a good idea to inflate your demand to account for this lowball counteroffer.
Remember that when you are dealing with your PIP insurance company, the amount of compensation you may demand is limited to compensation that covers economic losses. Additionally, you may demand only 80 percent of your lost wages.
Contacting the Other Driver’s Insurance Company for Compensation
In New York, a car accident victim can sue another driver for compensation only if they have suffered a serious injury.
Serious injuries may include but are not limited to:
- Fractured or crushed bones
- Miscarriage or loss of a fetus
- Significant bodily disfigurement
- An injury that significantly limits a body function or body system
- An injury that results in the permanent loss of a body function or member
Once it has been established that a victim has suffered a serious injury, they can proceed to make a claim against the other driver’s insurance company. Because the other driver’s insurance company is not PIP insurance, the victim is not bound by the limitations that apply to PIP insurance coverage and car accidents.
In other words, if you have suffered a serious injury in a car accident and seek compensation from the other driver’s liability insurance, you are not limited to economic damages, nor are you limited to only 80 percent of lost wages. Your claim for compensation may include a demand for full compensation for economic and non-economic losses.
What if the Insurance Company’s Counter to My Offer Is Too Low?
Because insurance companies are for-profit businesses, you can expect the one you are dealing with to make a lowball offer or counteroffer to your initial demand. But just because the insurer comes in below what you deserve does not mean you have to accept their offer.
As a matter of fact, insurance companies are well aware of the negotiation game that is the compensation process. And they expect their lowball offers to be rejected by car accident victims who have car accident attorneys representing them.
However, unrepresented car accident victims typically are unaware of the value of their claims and often accept these subpar offers because they do not know better.
What Happens When I Reject an Insurance Company’s Offer?
If you reject an insurance company’s offer for compensation, you can wait for the company to come back with a better offer, or you can propose your own offer. If the insurance company refuses to go any higher, you then have two options: accept its offer or file a lawsuit.
Keep in mind that if you are represented by an experienced car accident lawyer, they will be handling this back and forth for you. Additionally, they will bring their years of experience to bear on the negotiation sessions and will likely make progress where you alone could not.
If the insurance company refuses to pay a reasonable figure, your car accident injury attorney can file a lawsuit and take the company to court.
Compensation From a Settlement versus Compensation From a Trial
Generally speaking, when you settle with another driver’s insurance company, you are typically settling or making a compromise. For this reason, the term “settlement” is used.
Insurance companies typically prefer car accident settlements because they know a trial could result in them paying higher compensation awards. In the vast majority of car accident cases, the insurance company will pay a settlement instead of going to court.
Evidence of Fault and How Much Compensation You Should Demand
Evidence of fault does not come into play when you are seeking compensation for losses against your personal injury protection insurance, which is a type of no-fault insurance.
However, if you are seeking compensation from the insurance company of the other driver or are filing a lawsuit against that driver, you will need to have evidence of that driver’s liability. And the strength (or weakness) of your evidence can directly affect the amount of compensation an insurance company is willing to pay.
For example, if you are terribly injured by another driver but the evidence of that driver’s liability is not particularly convincing, the insurance company will likely deny your claim or pay significantly less than it should. This is a common result of victims who seek compensation on their own.
For this reason, it is important for claimants to have an experienced car accident lawyer representing them. A seasoned car accident lawyer will know how to collect the evidence they need to back up their client’s claim and force the insurance company to pay what it owes.
A car accident lawyer can use evidence to get their client fair compensation:
- Traffic cams
- Dashboard cams
- Accident reports
- Testimony of accident reconstruction experts
Your car accident attorney may also use the testimony of witnesses and testimony gathered through depositions. The more evidence you can supply, the stronger your case will be.
Hire Legal Help
After a car accident, if you don’t know how much you should ask for in a settlement, contact a car accident lawyer before proceeding with your claim.
With a personal injury attorney in Bronx on your side, you will have a far greater chance of getting a fair compensation figure than you would if you tried to approach an insurance company on your own.