If you’ve been in a crash, chances are you have no idea what happens next.
Do you file a claim or a lawsuit? Are they the same thing? It’s a common source of confusion among accident victims everywhere — and one that can cost them dearly if not addressed quickly.
A claim and lawsuit are two very different things. Here’s how they differ, when you should file each, and how a contingency fee attorney can help…
Table of Contents
- What Is a Car Accident Insurance Claim?
- What Is a Car Accident Lawsuit?
- Key Differences Between Insurance Claims and Lawsuits
- When Filing a Lawsuit Is Necessary
- How a Contingency Fee Attorney Can Help
What Is a Car Accident Insurance Claim?
When you file a car accident insurance claim, you are filing paperwork with an insurance provider requesting compensation.
It’s the first step in almost every case. The injured person contacts the insurance provider of the party deemed at fault and requests they cover medical bills, vehicle repairs, lost income, and any other injury-related damage.
Most claims don’t proceed any further than this. Protecting your rights by seeking legal help from a Dallas car accident law firm early during the claims process is how you avoid being cheated — especially if that attorney works on contingency fee. Meaning, they only get paid if you win.
Insurance companies have adjusters employed to pay out the lowest amount possible.
What Is a Car Accident Lawsuit?
A lawsuit occurs when someone files legal paperwork in civil court.
This is the action you take when the insurance claims process doesn’t work in your favor. No offer is made, the settlement offer is too low, or they deny the claim outright. In response, you file suit against the person who caused the accident.
The surprising part is… most lawsuits don’t even go to trial.
Approximately 95% of personal injury lawsuits settle beforehand.
Litigation does force the insurance company to negotiate seriously, though. And anything can happen during a trial. You don’t want to file a lawsuit without being prepared to go that extra mile.
Car accident cases which wind their way through the court system take 20 months on average from start to finish. Cases that settle outside of court take 6-9 months.
Key Differences Between Insurance Claims and Lawsuits
Here are four key ways filing a claim vs. filing a lawsuit differ.
- The process involved is completely different.
- A claim involves negotiations between you (the injured party) and the insurance company.
- A lawsuit is filed with the civil courts and can involve a judge, discovery process, depositions, mediation, and even a jury.
- The timeframe to reach a resolution will be drastically different.
- Insurance claims can take anywhere from a few weeks to a few months.
- Lawsuits take anywhere from one to three years.
- The cost you pay for legal assistance will be drastically different.
- You can file a claim with little cost for legal help.
- A lawsuit will cost you attorney fees, cost of court, and other expenses. A contingency fee attorney will cover those costs until the end of your case.
- The final payout has the potential to be much different.
- Insurance claims are limited by the policy limits of the at-fault driver’s insurance policy.
- A lawsuit has the potential to award damages far above policy limits including compensation for pain and suffering, and in some cases punitive damages.
Claim = starting point. Lawsuit = escalation.
When Filing a Lawsuit Is Necessary
While every car accident case doesn’t require a lawsuit, there are some scenarios that require you to file one.
Here’s when escalating your case makes sense.
- The insurance company denied your claim without just cause.
- The insurance company offered a settlement that doesn’t even cover medical bills and lost income.
- You and the at-fault party disagree on who is liable.
- Your injuries are severe and recovery will lead to lifelong costs.
- The deadline for your state’s statute of limitations is near.
Acting quickly is crucial. Insurance companies raised the average payout for bodily injury claims by 8% in 2024 alone. Those numbers aren’t stagnant, either. They tend to increase every year.
The average American household cannot feasibly afford an extra $27K+ if they’re not working due to a car accident. That number jumps even higher for accidents causing severe injury.
Letting the statute of limitations expire on your ability to collect compensation leaves you with nothing.
How a Contingency Fee Attorney Can Help
One last thing most people don’t realize…
Working with a contingency fee attorney won’t cost you anything upfront. Attorneys who work on contingency are only paid if you win your case or settle — and they receive their payment as a pre-determined percentage from the final payout.
You should have a qualified attorney on your side handling any communication with insurance companies. They have teams of full-time adjusters that work round-the-clock trying to save their companies money on your claim. You deserve someone just as qualified fighting on your behalf.
Contingency fee attorneys can help you:
- Gather evidence to prove your injury claim is valid
- Negotiate with insurance companies who will try to low-ball you from the start
- Make sure you don’t miss critical deadlines like statute of limitations and court filings
- Take your case to trial if necessary
Statistically speaking, your chances of maximizing your payout are much greater if you hire a personal injury attorney. Research shows that those who hire an attorney are awarded nearly three times the compensation than those that don’t.
There’s a big difference between breaking even and being financially ahead after an accident. Make sure you have the best chance possible by seeking legal counsel as soon as possible.
The Takeaway: Claim vs. Lawsuit
Insurance claims and lawsuits are not the same thing.
They each serve their own purpose, and being able to identify which path to take is critical to your case.
Quick Review:
- Filing a claim is done through insurance companies. It’s the first course of action for anyone seeking compensation.
- Filing a lawsuit is done through the civil courts. It’s what you do if the insurance route doesn’t work in your favor.
- A contingency fee attorney can provide legal assistance for free up front and help you make the best decision for your case.
- The earlier you consult with an attorney, the more options you have to protect your rights and maximize your case value.
Don’t wait until you’ve been lowballed by an insurance company to look for legal help. By knowing the difference between filing a claim vs. lawsuit and having a contingency fee attorney in your corner, you’re already ahead of the game.
