Personal Injury Lawsuit vs. Insurance Claim: What You Need to Know

Finding yourself injured during a car accident, whether it’s vehicle-on-vehicle or vehicle-on-pedestrian, can be a challenging situation. Even small accidents at low speeds can result in serious injuries which lead to hefty bills and additional damages. Knowing the difference between a personal injury lawsuit and insurance can help you determine which option to pursue so that you can be made whole after the wreck.

What is Car Insurance?

People often confuse car insurance with car warranty despite the fact that they are not the same. Car warranty protects a vehicle in the event of a mechanical breakdown. So long as the mechanical breakdown is covered under your warranty plan, then you will not have to pay anything more than your deductible.

On the other hand, car insurance protects your vehicle in the event of an accident or collision with some other type of object. There are a variety of different types of car insurance that cover a person for medical bills, property damage, and much more.

Six Common Types of Car Insurance

One important distinction with car insurance is that there are multiple different types. While carrying basic car insurance is required, many of the different types actually are not required by law, though they tend to be smart to have. The six basic types of car insurance include:

Liability Coverage: Serving as the form of car insurance that is mandatory in most states, liability coverage helps pay for either medical or property damage costs another person suffered as a result of an accident you were deemed to be at-fault for.
Uninsured Motorist Coverage: This second form of insurance offers coverage in the event of a collision with a driver who does not have any insurance. This policy will help ensure you receive compensation, even if that other person doesn’t have funds.
Collision Coverage: Collision coverage insurance helps provide you with compensation in the event of a vehicle collision with an object, as opposed to a person or other vehicle.
Comprehensive Coverage: Comprehensive insurance offers financial protection against natural disasters such as a tree falling or another similar event.
Personal Injury Protection Coverage: PIP insurance coverage is only an option in certain states and will offer coverage for some of your medical expenses, along with additional expenses, following an accident.
Medical Payments Coverage: Similar to PIP protection, medical payments coverage will offer compensation for injuries you suffered, or your passengers suffered, as a result of an accident.

How Does a Car Insurance Claim Work?

When a car accident occurs, those who are involved in the accident will exchange contact information and insurance information with each other. Additionally, they will take photos of the damage to their own vehicle and the other person’s vehicle to document what the damage is looking like.

Once the incident has been reported to the insurance companies, they will reach out to their policyholders to listen to what happened during the accident. This will be used to determine fault and will also determine which part of your insurance policy may kick in to offer coverage.

At-Fault vs. No-Fault States

As the car insurance claims process begins, the state you are in at the time will have a major impact on how the process progresses. The majority of states in the U.S. are at-fault state, which means the insurance companies will interview you after an accident and work with the other insurance company to determine which driver was at fault and to what degree. This will determine whose insurance company pays who for damages.

In a no-fault state, of which there are only a handful, a person’s insurance company will not investigate for fault and will simply pay their own policyholder. In these states, PIP insurance is mandatory.

What is a Personal Injury Lawsuit?

On the other side of things, a personal injury lawsuit is when one person is injured as a result of the negligent actions of another person or organization. A person is acting negligently if they behave in such a manner that they have a disregard for the consequences which may affect those around them. For example, if the car accident you were in was caused by a driver who chose to take their eyes off the road to go on their phone, a personal injury lawsuit may be more applicable.

4 Factors Required to Win a Personal Injury Lawsuit

For those looking to seek out a personal injury lawyer, it’s important to be aware that there will be four main items to prove during your case which make up personal injury law:

Duty of Care: First, it must be shown that the party who caused the accident had a duty of care to protect others around them by acting in a responsible manner.
Breach of Duty of Care: Second, it must be shown that the person who caused the accident breached their duty of care through negligence and a disregard for others.
Causation: Third, it must be shown that the defendant’s actions directly resulted in the accident through one form or another.
The Existence of Damages: Finally, it must be shown that the damages the plaintiff experienced stemmed directly from the negligent actions of the defendant.

Can You File an Insurance Claim and Personal Injury Lawsuit?

In some cases, a person may choose to file a personal injury lawsuit after they file an insurance claim. If the person who caused the accident was negligent in their actions and the injured party is not made whole through insurance, it is quite common to see a personal injury lawsuit occur after the incident.

The Bottom Line

Being injured in a car accident is a terrifying experience that can have long-lasting implications in a person’s life. Understanding how an insurance claim or personal injury lawsuit can apply to your situation, as well as help you get compensation, will ensure you are made whole. Don’t settle for living with a serious injury that resulted from an accident when you can reach out to an accredited lawyer who can help you build your case in court. 

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Posted - 05/22/2023