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Car Accident Settlement Process: Timeline, Demand Letter, and Payouts

If you have been in a car accident and sustained personal injuries in addition to car damages. Your next step should be getting compensated for the bodily injuries and losses you incurred, right? But what are the Car Accident Settlement Process: Timeline, Demand Letter, and Payouts?

What is a car accident settlement and how long will it take to settle? How much money will your case settle for? Do you write a demand settlement letter, or it’s your car accident attorney’s duty? What if you hired no personal injury lawyer? Do cases where a car accident attorney is hired pay a higher settlement or not? Well, this article should help you get answers.

A car accident settlement is an agreement between the plaintiff (injury victim) and the at-fault party (usually his/her insurance company) to resolve the car accident disputes without going to trial.

A car accident settlement demand letter also known as a settlement claim letter is a formal document sent to the at-fault party by the defendant’s attorney indicating facts of the accident, a list of damages, and statements of fault.

A demand letter simply lists all damages suffered by the car accident victim, proof of fault in the accident, and a request for the payout. A demand letter is sent after a car accident to the car insurance company that covers the at-fault driver. 

This article is a bit long as it goes into bits of detail. You are free to go through the contents below and look at the sections that interest you. To understand the whole car accident settlement process, you will need to read the whole article. Here you go!

Page Contents

Car accident settlement time frame

They are several ways of resolving car accidents and other personal injury case disputes. The defendant and the claimant most likely will resolve their disputes through:

  • Settlement Negotiations
  • Dispute mediation
  • Arbitration and
  • Litigation and others.

The cheapest and fastest means of car accident dispute or conflict resolution is by settling your case with the insurance company, leaving litigation and other means of trials the most expensive and time-consuming. A settlement means an agreement with the defendant (car insurance) to end the conflict.

There is no designated time frame for car accident settlements. Each car accident case is different and the damages involved vary in severity and costs. But, on average, most car accident settlement time frame is from 3 months to 3 years.

Car accidents and other personal injury conflicts that go to trial usually take a relatively long time to settle, though I have seen cases settle very fast during the trial. Note, car accident cases can settle before trial, during the trial but before the verdict, or go all the way through the trial till the jury/judge’s verdict.

A simple study I carried out on Reddit revealed that at least more than 94% of car accident cases are settled out of court. Of the 55 respondents who answered yes/no survey questions, 52 respondents said their car accident personal injury cases were settled.

How long does a car accident settlement take after a deposition?

For some of us who know little about legal language, deposition refers to a statement recorded in or out of court before or during a trial. This statement is taken under oath and presided over by the court recorder

During the deposition, the complainant (plaintiff/ accident victim) is questioned by the defendant’s attorney (insurance company), and then the at-fault party is in turn questioned by the plaintiff’s lawyer. This is done during the trial or in preparation for the trial.

A deposition is an oral examination of the parties to the case and all the witnesses, in preparation for the trial. Deposition can be video-tapped or written transcripts and will be presented in court during the trial. The lawyers will question/examine or cross-examine you based on what you said during the deposition

How long a car settlement takes after deposition depends on many things including:

  • Was the deposition done during the trial or in preparation for the trial?
  • Is your lawyer putting in more effort to settle out of court or during trial?
  • Is the defendant or his insurance company willing to settle or not?
  • Are you trying other means of conflict resolution like mediation, etc?

Having that said, there is no definite time in which your personal injury case will settle after deposition. According to nolo, at least 90% of car accident cases settle out of court. According to my attorney, it normally takes months to years to settle personal injury cases unless they went to trial.

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Why is my lawyer taking so long to settle my case?

It is a dream for any car accident victim to settle and receive fair compensation for the damages incurred. Unfortunately, it takes a long time for some cases to settle without significant reasons.

A personal injury case could take a long time to settle due to reasons like:

1. Complications in your car accident case. If it is hard to determine which driver was at-fault for the accident, or hard to provide concrete evidence, then your car accident case will take a long time to settle. Car insurance wants to pay the lowest settlement, or at any slight chance deny you a claim. 

2. A Large amount of money is at stake. As I said, all insurance companies want to keep all their money and make huge profits. They know that an injured person is desperate for money and so want to play hardball by offering you the lowest settlement offer possible.

They will use this tactic of delaying settlement just to force you to accept a smaller offer. If you are injured and desperate for help, your will end up accepting any offer on the table.

3. Minimum medical improvement on treatment. An experienced lawyer will tell you that your case will not settle not until you have reached your maximum medical improvement. You won’t tell how much is worth your future pain and suffering, or how much treatment costs you need in the future. 

What I need to advise you is that sometimes it is not a wise decision to accept the first or second settlement offer from the insurance company. Insurance claim adjusters are trained in all tactics for cheating clients. You won’t get surprised if an insurance company contacted you soon after the accident and offered you a quick settlement- do not accept being cheated very fast!

Why is my car accident settlement taking so long?

A car accident settles when the claimant/plaintiff accepts a lower payout than expected, and or when the defendant/ insurance company accepts to pay a higher payout than they too expected.

Usually, during negotiations, the insurance company will offer a disappointingly low settlement whereas the claimant will ask an expectedly very large amount as a settlement. Depending on the type of conflict resolution being used, a settlement should be reached if the insurance company accepts to raise their offer meanwhile as the accident victim lowers their demand.

Your car accident case will take a longer time to settle if both the defendant and claimant fail to adjust their offers and demands respectively. Causes of such delays include the extent of injuries, the number of damages being demanded, and difficulties in proving the accident liabilities.

What is a demand in a car accident?

A demand letter is any formal document written by your personal injury lawyer, asking for a payout for damages from another party that is responsible for your injuries and other financial losses. 

Here are 3 most components of a car accident personal injuries demand letter.

1. Relevant car accident facts. The demand letter should describe the accident, any injuries, and property damage suffered. It should list all expenses incurred such as medical bills.

2. A list of damages. The demand letter should list all damages or payouts being demanded. It should highlight the expected payout for each damage like medical bills, pain, and suffering, property damages, emotional damages, lack of consortium, and others.

3. Statement of fault. It should state why you think the other party is at-fault for the accident as supported by the evidence listed or indicated. 

Is a demand letter a settlement?

A claim settlement demand letter is a letter sent by the injured person (his/her lawyer) to the at-fault party (insurance company) whose negligence caused the accident. The key role of a demand letter is a request to settle a dispute.

I earlier alone described a settlement as an agreement between one or 2 parties to end a dispute or conflict out of court. Sending demand letters is the first step the aggrieved person takes before filing lawsuits. Therefore, a demand letter is not a settlement but the first step toward settlement.

How long does insurance have to respond to demand letter?

Well, this depends on many things. Remember, the following could happen soon after sending a demand letter to the defendant party.

  • The defendant (insurance company) could honor the demand letter and pay the damages listed in the letter.
  • The defendant can write a counter-demand letter denying liabilities.
  • The defendant could refuse to pay for some of the damages listed in the letter. For instance, it could go against paying for emotional damages or any other injury listed. Here the defendant will write a reply highlighting their settlement offer.
  • The defendant (insurance company) trashes the letter and writes no reply. The claimant should write another letter. 

How long after demand letter can I expect settlement State Farm?

If liability is not an issue, State Farm usually acts fast to respond to the demand letter. I was told that State Farm will reply to your demand letter within 30-45 days. This reply could be a settlement offer, or another letter explaining otherwise as already explained.

How Long Do Personal Injury Settlements Take?

Settlement occurs when the conflicting parties come to terms to end a case. Once the parties have agreed on all the terms like settlement amount, payment terms, and timeframe, the agreement will be put in writing and both parties will sign it.

What you should know before signing the settlement agreement is that it is binding. Once you have accepted and signed it, you can be sued in courts of law to force you to honor all the terms and conditions. 

There is no clear time your personal injury settlement process could last. If the insurance company quickly offers you a settlement and you think it is fair, then the settlement is done and ended! If there is still a party that is not satisfied, the settlement negotiations could drag on for some time. 

If the conflicting parties decide and are willing to settle, the average time for personal injury settlement is up to 3 months. Depending on different circumstances, some cases take longer. Do not expect to settle a case where Millions of dollars are being demanded, or there were severe injuries suffered.

How are personal injury settlements paid out?

Once you arrived at a certain amount as a settlement and both parties signed the agreement, the insurance company could pay a lumpsum settlement or pay installments depending on the agreed terms. 

According to a survey I posted on the personal injury Facebook group, many of the respondents reported 3-6 weeks as the average time personal injury settlements were paid after settlement.

The check will usually be issued to your lawyer. The lawyer will pay you after deducting his fees and other costs. Car accident attorneys usually take 33% of your settlement, or close to 40% if your case goes to trial. 

Average settlement for car accident back and neck injury

Frankly speaking, you can not tell beforehand what settlement your bodily injuries will attract. The following factors come into play during settlement negotiations.

  • The severity of injuries. Life-threatening and disabling injuries usually settle for top dollars. 
  • You state. Some states have caps on certain damages. Your settlement could be affected by certain caps. 
  • Degree of negligence shared in the car accident. In some states, your settlement is reduced by the degree of fault shared for the accident. 
  • Attorney hired. By hiring a dump lawyer, the defendant’s insurance company will under-look him and offer a low settlement. 
  • The judge or jury. Jurors are people picked in the community to make decisions on your case. These are highly unreliable.
  • The personality of the claims adjuster. Some are bad while others are the worst.

What is a good settlement offer for a car accident?

A good settlement is the amount of money the plaintiff thinks is fair. Cases that are settled most likely fetch fair settlements than cases that go to trial. A good settlement should cover your medical bills, property damages, and lost and future income/wages.

How much to expect from car accident settlement California?

If you are living in the state of California, car insurance companies are required by law to settle car accident cases within 85 days. 

In California, damages for pain and suffering are calculated as follows.

Estimated days you are expected to have pain and suffering from the day of the accident = A

The jury is expected to pay $100 to $200 as daily payout compensation for pain and suffering, assume = B.

Settlement for pain and suffering = A X B.

Assume the jury offered $200 as a daily payout, and you are expected to live with pain and suffering for 2 years = 24 x 30 days = 720 days. 

Pain and suffering settlement = 720 days X $200 = $144,000.

Though there are many different types of injuries and property damages involved in car accidents, determining the average settlement is not easy because they are many factors that come into the equation. According to data across California, car accident settlement in California is between $14,321 and $29,215. The average settlement amount is roughly $22,000.

Auto accident settlement timeline California?

Statutory limitations only state deadlines within which plaintiffs should file personal injury lawsuits. The average time in which you should have filed a car accident lawsuit is between 2-3 years with some adjustments depending on the case. 

For instance, an injured child can wait till he/she is at least 18 years to file a personal injury lawsuit, otherwise, a friend or caretaker should file on his/her behalf.

According to law, car insurance companies in California should settle car accident cases in less than 85 days, or else the company will have committed acts of bad faith. California statute of limitation law states that the deadline for filing a lawsuit is from 1-3 years. There is no submission deadline for cases where the penalty is most likely death or life imprisonment.

Car accident settlement payouts

Irrespective of the conflict resolution method used to settle your car accident, you will at the end of the day receive a car accident settlement payout. This payout is the amount the jury or car insurance claims adjuster thinks is worth the damages you suffered due to the car crash. 

According to the insurance information institute, the average personal injury car accident settlement amount in Georgia is $18,417. If you live in Florida, you should expect $300,000 to $6,100,000 as your personal injury car accident settlement. If you are living in Pennsylvania, your car accident settlement will likely be between $333,333 and $5,000,000. Car accident settlement payout is the same money offered as settlement.

Personal injury settlement amounts examples

Car accidents and Personal injury always end up in settlements. Data from my simple facebook survey showed that less than 8% of car accident personal injury cases went to trial. 

Below are 3 examples of personal injury settlement according to my survey findings.

1. Half of the respondents received less than $23,000.

2. Two respondents reported a settlement amount of $50,000

3. $15,500 was offered to a lady who sustained head injuries after she was involved in a collision accident with a truck.

4.$24,530 awarded to a plaintiff who sustained a head injury after a head-on collision with another car.

In summary. Car Accident Settlement Process: Timeline, Demand Letter, and Payouts are not straightforward. The final car accident settlement process and payout depend on many factors like the method used in conflict resolution, customer care of your insurance company, and how serious are your injuries.