Your Guide to Motor Vehicle Injury Settlements

Index

1. The Prevalence of Motor Vehicle Injury Settlements
2. Factors Influencing Settlement Agreements
3. Types of Compensation in Settlements
4. The Settlement Process

Motor vehicle accidents are an unfortunate reality of modern life, often resulting in injuries, property damage, and legal disputes.  In many cases, victims of car accidents seek compensation for their injuries through settlements, which offer a faster, less costly alternative to going to trial.  But how common are these settlements?  The short answer is: very common and, arguably, too often.  While most would prefer their case settle without going to court, it’s important to know the full extent of your damages and have your story fully developed for trial before attempting settlement of your claim.

While injury cases can involve a number of complex legal issues, this post provides an overview of how frequent motor vehicle injury claims are resolved through settlements, as well as the factors that influence settlement agreements and what individuals involved in accidents can generally expect during the settlement process.

See our service page on Omaha Attorneys for Motor Vehicle Accident Injuries.

The Prevalence of Motor Vehicle Injury Settlements

The vast majority of motor vehicle injury cases are resolved by settlement.  It is estimated that 90-95% of personal injury claims arising from car accidents are settled out of court before reaching trial.  Several factors contribute to this high rate of settlement:

Time Efficiency

Settling a case is generally much faster than going to court.  Trials can take months, if not years, to resolve, while settlements can be reached in a matter of weeks or months, depending on the complexity of the case and the severity of injuries.  For both plaintiffs and defendants, settlements provide a quicker resolution, avoiding lengthy litigation.

Lower Costs

Legal proceedings are expensive.  Attorney fees, expert witnesses, court filing fees, and other expenses can quickly add up.  By settling, both sides can avoid the high costs associated with a full trial.  This is particularly appealing for insurance companies, which aim to minimize their legal expenses by negotiating settlements with injured parties.

Uncertainty of Trials

Trials carry the risk of an unpredictable outcome.  Even if the facts of a case seem to favor one side, there is no guarantee that a jury or judge will rule in their favor.  Most people hate uncertainty.  Settlements offer a certain outcome, allowing both parties to control the terms of the resolution without the gamble of going to court.

Insurance Company Practices

Most motor vehicle injury claims are settled directly with insurance companies, which are highly incentivized to settle cases before trial.  Insurance adjusters are trained to evaluate claims and make settlement offers based on the severity of the injuries, liability, and other relevant factors.  These companies prefer to settle to avoid the risk and expense of trial litigation.

Factors Influencing Settlement Agreements

Several key factors determine how motor vehicle injury settlements are reached, including the severity of the injury, the determination of liability, and the willingness of both parties to negotiate.

Severity of Injuries

The more severe the injuries, the higher the potential settlement value.  Serious injuries like broken bones, head trauma, or long-term disabilities tend to lead to larger settlements because they involve higher medical costs, lost wages, and pain and suffering.  Conversely, minor injuries may lead to quicker, smaller settlements, as the financial damages are typically lower, and the there is a lower likelihood of permanency.

Liability and Fault

The determination of fault is critical in settlement negotiations.  If it is clear that one party is entirely at fault, the settlement process tends to be somewhat more straightforward with both sides focusing on the value of the damages sustained.

However, in cases where liability is disputed, or shared between both drivers, negotiations may become more complicated, potentially lowering the settlement amount.  In “modified comparative negligence” states, such as Nebraska, a victim must prove the at-fault party, or parties, is/are at least 51% at fault for the accident.  In addition, compensation is reduced based on the injured party’s degree of fault for the accident, assuming such percentage of fault is less than 50%.  See Nebraska’s contributory negligence statute at Neb. Rev. Stat. §25-21,185.09.

Policy Limits

The limits of the at-fault driver’s insurance policy often play a significant role in settlement amounts.  If the at-fault driver has low policy limits, the injured party may be unable to recover the full amount of their damages unless other avenues of compensation, such as uninsured or underinsured motorist coverage, are available.  Attorneys for an injured party can also often utilize the at-fault driver’s policy limit as leverage in negotiations.

Negotiation Process

The negotiation skills of the parties involved, particularly the plaintiff’s attorney, can significantly influence the settlement amount.  While nearly all plaintiffs would rather reach a pre-trial settlement instead of pursuing their case in the courtroom, it’s important that your injury attorney have the skills and experience needed to pursue the case at trial if necessary.  Trial is a plaintiff’s leverage, and some cases must be litigated.  Without the real threat of trial, it is extremely difficult for an injured plaintiff to recover adequate compensation for their injuries.  Experienced attorneys know how to advocate for fair compensation and are more likely to secure a favorable settlement.

Types of Compensation in Settlements

Motor vehicle injury settlements typically cover a range of damages, including economic and non-economic losses. These may include:

• Medical Expenses: This covers all medical bills related to the accident, including emergency care, surgeries, hospital stays, rehabilitation, and ongoing treatment. Future medical expenses may also be included if the injuries require long-term care.
• Lost Wages: If the injury caused the victim to miss work or resulted in a reduced earning capacity, the settlement may include compensation for lost wages.  In cases of severe injuries that prevent the victim from returning to work, settlements may account for future lost earnings.
• Property Damage: Most settlements also include compensation for the damage to the victim’s vehicle, as well as any other personal property damaged in the accident.
• Pain and Suffering: Beyond the tangible economic losses, settlements often include compensation for the physical pain and mental suffering endured by the victim.  This is a subjective category of damages that accounts for the physical pain, emotional distress, and reduced quality of life caused by the injury.
• Punitive Damages: In some cases, settlements may include punitive damages, which are meant to punish the at-fault driver for particularly reckless or negligent behavior, such as driving under the influence of alcohol.  In Nebraska, it’s extremely rare for punitive damages to come into play unless the case involves an out-of-state defendant or a 1983 action; however, if the crash occurred in another state, then punitive damages may be available.

The Settlement Process

The motor vehicle injury settlement process typically involves the following steps:

1) Filing a Claim

After the accident, the injured party files a claim with the at-fault driver’s insurance company. The insurance adjuster then investigates the claim to determine liability and the extent of damages.

2) Negotiation

Once the claim is filed, and the injured party has reached maximum medical improvement (MMI), both sides enter into negotiations.  The insurance company will usually make an initial offer, which the plaintiff can accept, reject, or counter with a higher demand. This back-and-forth continues until both sides reach an agreement, or the parties reach a stalemate.

3) Settlement Agreement

Once a settlement is reached, both parties sign a settlement agreement or release of liability.  In exchange for the agreed-upon compensation, the injured party agrees to release the at-fault driver and their insurance company from further liability.

4) Payment

After the agreement is signed, the injured party receives payment, typically as a lump sum.  In some cases, structured settlements, which provide payments over time, may be used.

4) Court Approval

While most injury claim settlements do not require court approval, in some situations it is required.  For instance, if the injured party is a minor or the claim involves a claim for wrongful death, then court approval is required.

Motor vehicle injury settlements are the most common way that accident-related claims are resolved.  With over 90% of cases settling out of court, victims and insurance companies alike tend to prefer this method due to its efficiency, cost-effectiveness, and predictability.  Unfortunately, too many cases are settled, or settled for less than full value.

Settlements typically account for a range of damages, including medical expenses, lost wages, and pain and suffering.  The specifics of each case vary, and valuation of an injury claim and understanding how various damages are calculated is complicated and varies from state to state, as different states have different laws and different rules of evidence.  However, understanding the settlement process and the factors involved can help individuals navigate the aftermath of a car accident more confidently and ensure they receive fair compensation for their injuries.

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All Chandler | Conway attorneys are incredibly experienced and knowledgeable in personal injury trial cases. Our attorneys will determine the best strategy for you and your family based on the specific circumstances of your situation and, when necessary, represent those interests in court.

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Related Pages

Do I Need a Personal Injury Lawyer?

How Injury Settlement Affects Future Health Insurance

Understanding Insurance Settlements & When to Settle

9 Steps in a Car Accident Personal Injury Timeline

Three Questions to Ask Before You Settle Your Accident Injury Claim