When Should I Settle My Personal Injury Claim?

Dangers of Settling Early

It all depends on how hard you’re willing to negotiate.

The time it takes to receive a personal injury settlement depends on your case and how much compensation you are asking for.

You can accept low-ball offers in a matter of weeks.

But do you want to?

And how do you even know what constitutes a “low-ball” offer?

First, it is typically based upon the fact that you, the injured party, don’t have a clear understanding of your injuries.

You may have sought initial emergency room treatment, but have not followed up with your primary care doctor to determine your long term medical outlook.

Essentially, the hospital has confirmed you are not going to die, but they haven’t told you what the cause of those aches and pains are, and what treatments will make the aches and pains go away.

Are there back issues that could become chronic as time goes on? Or will you reach full medical recovery? You don’t know. The adjuster doesn’t know either.

But they call to offer you money, at a time you just want to put this all behind you.

Enter the low-ball offer.

Read on to learn the pitfalls of settling early in your car accident claim.

Carefully Evaluate The First Offer

It is usually right after you are discharged from the hospital the adjuster calls you with an offer.

But they have no idea what your hospital bill amounts to, and you usually don’t either because the hospital has not yet processed your bill.

At this point, both you and the adjuster are just winging it. So the offer is usually much lower than the real cost of your medical bills and damages.

An adjuster will typically offer anywhere between $500 and $3,000 to close your claim.

But those amounts would not even cover more than 20 minutes in any hospital in Arizona involving any type of diagnostic testing. CT scans, MRI or even an x-ray will set you back about $7,000 to $11,000. Even with a $3,000 offer, you are being drastically shortchanged.

In a similar scenario, you might decide to handle your own claim. How hard could it be? Thinking it would be just fine, you fill out all the health questionnaires from the adjuster and they promise to collect your information. But here’s the kicker — they never share it with you.

To evaluate an offer, ask yourself whether it covers all of your medical bills and accounts for lost wages and pain and suffering. Usually, the amount in the initial offer is not nearly enough to cover all this.

The best settlements often require patience and skilled negotiations that can take months or even years. The process of obtaining a settlement falls into 3 phases:

  • Making a demand
  • Negotiating the offer
  • Reaching a settlement

Phase 1: Making a Demand

The following are the steps involved in the first stage of obtaining a settlement after an accident.

Receive treatment

You want to get medical treatment as soon as possible. Keep track of all your medical treatments and appointments. Document your pain and symptoms as well. Once your treatment is complete, you can proceed with your claim.

Hire an attorney

When you consult with a personal injury attorney, they might advise you to hold off on sending a written demand letter until you’ve finished all medical treatments related to the injury. We want to make sure you’ve seen all the necessary specialists and impairment evaluations before proceeding with your demand letter.

Gather documentation

Only after you’ve fully recovered will you know how much your injuries cost you. You should also give yourself another month or two to gather all the necessary records.

Send a demand letter

Then you send a demand letter that explains your side of the case. You will also ask the insurance adjuster, or the other party, to send a certain dollar amount to settle the case. The letter will also say that if your demand isn’t met, you will file a lawsuit.

It typically takes an adjuster 3 to 4 weeks to fully evaluate your claim. If we haven’t heard from the adjuster within that time, we will follow up with a call.

Phase 2: Negotiating the Settlement Offer

Depending on the complexity of your injury, the insurance company may want a few additional weeks to evaluate your claim.

Once that step is complete, they will likely point out weaknesses in your claim, such as unnecessary treatments or any liability questions.

They may send your bills and records out for an evaluation by a medical provider, who will give an opinion on whether your treatments and costs were appropriate, whether your treatment was for new injuries, and whether you have pre-existing or coexisting conditions.

Based on those objections, the insurance company will issue a counter-offer to the figure in your demand letter. Typically, this is also another low-ball offer the insurer uses to test your eagerness and willingness to settle.

At this point, your attorney can make another offer or walk away from negotiations.

Factors That Affect the Negotiation

If you’re not ready to file a suit yet, your attorney can proceed in negotiating with the insurance company. This process may take weeks or months depending on how much money is involved, as well as the seriousness and nature of your injuries.

These negotiations typically address:


Who is liable for the accident, and how much liability each party bears.

Extent of injury

Are your injuries from the accident disabling or have other long-term consequences?


Does the defendant’s policy actually cover the type of accident involved?

The type of medical treatment

Was the care and therapy you received medically necessary? Did you have any pre-existing conditions that exacerbated your injuries?

Filing a lawsuit

If you still haven’t received a good settlement after negotiating with the insurer, your attorney will help you file a lawsuit against the defendant. This is a negotiations tactic known as “the walkaway.” Proceeding with a lawsuit shows the insurance company you are serious about getting a good settlement.

How long this lasts will depend on how badly you need money and how close you are to the statute of limitations. If you don’t have time or money for lengthy negotiations, filing earlier might be the best strategy.

Regardless of whether you take your case to court, having an attorney on your side will help. Personal injury attorneys are skilled in negotiating and know how insurance adjusters work. Likewise, a lawyer will know how to proceed with your claim in court if it comes to that.

Phase 3: Reaching a settlement

This phase will depend on how you proceeded with your case — negotiation or litigation. Here’s what you can expect from either process.

Reaching a Resolution Through Litigation

If you file a lawsuit and see it through to a verdict, the amount you’ll receive is called an “award”, “judgment” or “damages” rather than a “settlement”.

The amount you receive would be determined by a judge in a bench trial, or by a jury in a jury trial.

From the tile you file until you receive an award, the litigation process for personal injury settlements often takes a year or longer. How long it takes depends on the complexity of your case. You may be in trial for a few days or a few weeks.

In Arizona, if your case value is less than $50,000, then you can “fast track” your case through an arbitration process. This consists of appearing in front of an experienced attorney who acts as your judge on the day of your arbitration. These arbitrators often have at least five years of experience in Arizona law. They will hear evidence just as a judge in a courthouse would. In the end, they will render a judgement on your case. This arbitration process can be much shorter than a trial.

However, if the insurer appeals the verdict, you may face a year or two of appeals processes. If the defendant doesn’t appeal within 30 days, you can expect to receive your check in a matter of weeks.

Reaching a Resolution Through Negotiations

When you negotiate a settlement, it is vital to bring all the facts you can get to support your claim. The other side will make an offer, but it is not necessarily the best offer. Most likely it is the lowest possible offer, or much much less than the value of your claim.

It is advisable to make a counteroffer, so you will know the amount the insurance company was prepared to pay you. When you get their offer, ask them to break it down and explain what each item is supposed to cover, and how much. If anything is missing like lost time from work or certain medical bills, ask them to include those.

Read more about settlement options.

Finalizing Your Settlement

Once your case has been settled, there are just a few more loose ends to tie up before you can finally get on with your life.

Here are the steps required to finalize your settlement:

1. Report the settlement to the court

If you’ve filed a lawsuit, you need to let the court know the case has been settled. They will issue an order of settlement.

2. Sign a release

Before you receive your settlement, the defendant’s attorneys will want you (and your spouse) to sign a release. Signing the release means you are forever giving up your right to sue the party who caused your injuries. The release will also set forth the terms of the settlement.

3. Complete all paperwork within 30-60 days

You will need to complete all paperwork within 30-60 days of the settlement order. This process can be handled quickly if the attorneys agree on the terms of the release. Otherwise, a judge must decide these terms if there is any disagreement.

4. Pay unpaid medical bills or liens

You’ll usually receive your settlement within a few weeks after finishing the paperwork. You first have to pay any unpaid medical expenses and satisfy any medical liens against your settlement. A medical lien is a legal right to your assets from someone who paid for your medical expenses.

5. Pay your attorney’s fees and expenses

Your attorney will usually take one third of your settlement as payment. You’ll also need to reimburse your lawyer for any expenses such as filing fees.

6. Receive a check from your attorney

After collecting attorney fees, your lawyer will issue you a check for the remaining amount.

7. Taxes

Compensation for physical injuries is tax-free. However, punitive damages and damages awarded for emotional distress are treated as taxable income.

Need Help Negotiating an Upcoming Settlement?

The road to negotiating personal injury settlements can be long. With the help of an attorney, you can ensure you use the right strategies to get the best possible offer.

At Thompson Law Firm, our attorneys can help ease the burden off your shoulders with enough on your plate as it already is. We’ll take care of the details for you. Call us at (480) 634-7480 for a free consultation and we’ll evaluate your case. Remember, you don’t pay us until we get your case settled — or win in court on your behalf.

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