When parties have a dispute, negotiation may be the most effective way to settle the dispute. Most personal injury cases are resolved through negotiation. The parties agree upon an amount that the at-fault party must pay to compensate the injured person for damages.
Negotiating a settlement is generally quicker and less costly than filing a personal injury lawsuit. Furthermore, filing a lawsuit does not guarantee payment for damages. Juries could rule in favor of the defendant or award a much lower amount for damages. A negotiated settlement ensures you receive money for your injuries and damages.
However, when a party refuses to negotiate in good faith to settle a dispute, you may need to file a lawsuit.
What Do You Need to Know About Negotiating a Personal Injury Settlement?
Before you begin negotiations to settle a personal injury lawsuit, you should know several things:
What Is a Reservation of Rights Letter?
The insurance company for the party who caused your injury may send you a reservation of rights letter. The letter informs you that the insurance company is investigating your claim.
These letters generally tell you that the insurance company will only pay your claim if the policy covers the accident or incident and the insured caused your injury. The letter may also explain that the insurance company is only liable for damages up to the policy limits.
Sending the letter may be the first step the insurance company takes to protect its interests. The investigation generally involves searching for evidence that the insurance company can use to undervalue or deny your insurance claim.
Therefore, beware of insurance adjusters who ask for recorded or written statements. The statements you make to the claims adjuster could be used against you later in your case. In addition, innocent statements can be twisted and misconstrued. Therefore, it is best to speak with a Houston personal injury attorney before talking to an insurance company representative.
You Should Complete Medical Treatment Before Settling a Personal Injury Claim
Before signing a settlement agreement, talk to your doctors. Make sure that you have reached maximum medical improvement before settling your claim. Maximum medical improvement is the point in your recovery where further medical treatment will not improve your condition.
Some individuals fully recover from their injuries. However, you may have a permanent disability or impairment. You need to know this information before you settle your claim. Having a permanent disability increases the value of your damages.
If you settle your claim before reaching maximum medical improvement, you may receive much less than you deserve for your injury claim. A permanent impairment could result in future lost wages, continued medical care, and long-term nursing care. If so, you deserve compensation for those damages.
Negotiation Begins with a Settlement Offer
You or the insurance company may make an initial settlement offer. If your attorney makes the offer, they send the company a settlement demand letter.
A personal injury settlement demand letter generally includes:
- A discussion of the facts of the case and how the other party caused your injury
- A discussion of the laws that create liability
- The details of your injuries and damages
- The value of your damages and the amount you demand to settle
The insurance company may take several weeks to consider the settlement offer. If you sustained serious injuries and your damages exceed the policy limits, the insurance company may agree to pay an amount equal to the policy limits.
However, the insurance company could also make a counteroffer. If so, your attorney and the insurance company enter negotiations. When your attorney negotiates a reasonable settlement amount, they prepare a settlement agreement for you to sign.
What Factors Impact the Negotiations in a Personal Injury Case?
Many factors could impact your personal injury settlement. Common factors that impact how much your personal injury case is worth include:
Texas Modified Comparative Negligence Laws
Being partially to blame for an accident can reduce the value of your claim or result in no compensation.
Texas modified comparative negligence law states that you cannot recover money for your damages if your percentage of fault for the cause of the injuries is greater than 50%.
However, if you are less than 50% at fault, you can receive partial payment for damages. Your damages are reduced by your percentage of fault. For example, if you were 20% at fault, you would receive an amount equal to 80% of your damages.
A jury decides whether you contributed to the cause of your injury, your percentage of fault, and the value of your damages. However, being partially at fault can impact settlement negotiations. As a result, you may need to accept a lower settlement amount to avoid going to trial.
The Severity of Your Injuries
Your injuries impact the value of your claim. The more severe your injuries, the higher the value of your claim. It costs more money to treat catastrophic injuries, and you miss more time from work to recover from those injuries. Additionally, you are entitled to compensation for the decrease in quality of life and future damages caused by a permanent disability.
The Amount of Insurance Coverage
Liability insurance compensates injured parties when an insured party causes injury in a covered event. For example, bodily injury liability car insurance pays you for damages caused by an insured driver.
However, the insurance company is only liable up to the policy limits. Therefore, if the at-fault driver carries the minimum car insurance coverage required in Texas, you may only receive up to $30,000 from the insurance company (per person), even though your damages may be worth more.
Statute of Limitations
Most personal injury cases in Texas have a two-year deadline to file lawsuits. You cannot pursue a personal injury lawsuit after the statute of limitations expires. Therefore, you may need to file a lawsuit if the other party refuses to negotiate a settlement to avoid losing your right to file a lawsuit.
Contact a Houston Personal Injury Lawyer for a Free Consultation
If another party caused your injury, you may be entitled to compensation for your damages. Call an experienced personal injury attorney in Houston, TX to schedule a free consultation. A lawyer will be well-equipped to handle negotiations and take your case to trial if the other party refuses to settle for a fair amount.