For the typical personal injury lawyer, the majority of their successful cases will end in settlements. While it's certainly possible for you to file a claim, convince the insurance company, and reach a settlement, that's not always the case. Oftentimes, the parties only settle once they have negotiated, making negotiation is an important part of the process. Although you can lean on a personal injury attorney to handle most of the negotiation process, it's still wise as a client for you to understand the basics. Clients should appreciate these four aspects of the process.
Notification and Demands
Before a claim moves forward, the claimant must formally send notice to the defendant. Likewise, the claimant must send a demand letter that states what remedies would make things right. This is the part of the process that formalizes the claim.
An insured defendant will then ask their policy provider about the claim. The insurance company will appoint a claims adjuster to investigate the validity of the case. If the adjuster finds the claim to be valid, their duty is to recommend a settlement.
Accepting or Rejecting the Initial Offer
Notably, if the claimant finds the offer sufficient, they can accept it and settle the whole matter without negotiation. Your attorney has a duty to tell you to the best of their knowledge whether they believe the settlement offer is in your best interest. However, you're within your right to either follow or ignore the counsel.
Presuming you don't accept the initial offer, you should make an effort to negotiate. Even if you find the offer outrageously low, negotiation is critical if you do have to sue at a later point in time. A judge will want to know if the two parties made good-faith efforts to sort out their differences. If the court believes they didn't invest enough effort in negotiation, the judge may order them back to negotiations rather than allowing the suit to move ahead.
The negotiation process involves offers and counteroffers. If the claimant believes the offer is too low, their attorney can send an explanation in writing to the insurer. The most probable outcome is the two sides agree on a settlement. The less likely scenario is the claimant ends up suing the defendant or dropping the case.
Suppose the two sides settle. They still have to arrange a payment process. Many insurers will purchase annuities to spread out their costs, and the annuity will make recurring annual payments to the claimant. If the settlement is small enough, the insurer might make a lump-sum payment.