The formal insurance claims process following a car accident can be a very stressful and time consuming affair for drivers involved. In addition, insurance premiums can increase to up to 40 percent for drivers who are found to be at fault, and too many claims can result in loss of coverage. If the accident is minor, such as a single-car accident or an incident with no chance of an injury claim, some drivers prefer to sign a private settlement letter in lieu of filing a claim with insurance. There are various advantages and disadvantages for settling privately. Therefore, before doing so, consulting with an experienced lawyer is the best way to make an informed decision.
What are the Risks Associated with Settling Privately?
There are various risks associated with settling a car accident case privately, such as the following:
- Cost. Settlements can be very expensive, especially if one or both drivers are found to be at fault. Insurance companies are financially responsible for claims, even if their client is to blame, but if their client chooses not to file an initial claim, that person will need to pay out of pocket.
- No defense. Insurance companies are legally obligated to provide the defense for their clients who file claims throughout the entire process, even if the case goes to trial.
- Vulnerability. The other driver may be unreliable. The majority of accidents involve drivers who do not know each other. Trusting the word of a stranger can be very risky if one is not careful, especially when money is involved. The other driver may not be able to pay, or they might provide false information or just completely disappear before matters are resolved.
- Increased premiums. Not filing a claim can increase premiums at the next renewal by up to 40 percent.
- Inaccurate compensation. If there is a rush and things get settled too hastily, important expenses that appear may be left out. Insurance companies have plenty of experience with claims, and they offer a full investigation that may provide leads that a driver may not have found on their own. Moreover, most demand letters include an agreement from both parties to release each other from any other claims that are not addressed in the initial letter.
- Unforeseen issues. What is visible at the time may not represent the total damage to either vehicle. Getting estimates are certain to help, but other issues can arise while the car is getting repairs. Internal injuries, or issues with the neck or spine, can take a while to develop, and someone may decide they want more compensation. If the insurance company was not made aware of the incident at the time, they will most likely deny later claims.
How Do I Settle Privately?
For drivers who decide to resolve the case privately, it is suggested that the following steps be taken:
- Exchange information. Motorists should obtain the name, address, license number, license plate number, and insurance information from the other driver. If there are any other witnesses at the scene, it is important to get their contact information as well.
- Record the damage. Drivers should write down the make, model, and color of the other vehicle. Take pictures of both cars from all angles and/or take notes on what happened and any initial damage or injuries in as much detail as possible.
- Call an ambulance if necessary.
- Contact the police. In New Jersey, all car accidents that result in injury or damage over $500 must be reported to the police as soon as possible. Also, an accident report needs to be filed within 10 days of the incident to the New Jersey Department of Transportation.
- See a medical professional to make sure there are no hidden or delayed injuries. As stated, some injuries from a car accident may appear later. Being examined by a doctor is important.
- Get an estimate. Drivers should obtain quotes from multiple mechanics to get the most accurate estimate possible. The cost of repair compared with the deductible can be the determining factor for settling privately versus filing a claim with insurance.
- Keep a paper trail. It makes the most sense to communicate with the other driver via text or email rather than over the phone so that everything said is documented. It is important to save any conversations, copies of transactions, return to sender receipts, or anything else that can be recorded electronically or otherwise.
- Consult with a lawyer. An experienced car accident lawyer can be invaluable in setting a car accident claim.
- Write a demand letter. A demand letter is one of the most important elements in the process. It should be well written and detailed.
Why Should I Work with a Lawyer?
There are definite advantages of working with a seasoned car accident lawyer:
- They work on contingent-fees. Most personal injury lawyers expect payment only in the event of successful cases, so there is little to lose on the client’s end. Though if there is a minor accident with no major injuries that may resolve in a smaller settlement, some drivers may prefer to handle their case on their own.
- Their knowledge of the Law. Lawyers can offer advice on any statutes of limitations and any other rules that may have an impact on a case. Lawyers can also file lawsuits on behalf of their client if necessary, and they can anticipate any possible arguments made by the opposition.
- They are advocates for their clients. Lawyers make sure that their client’s needs are being heard, and they will fight to acquire the best compensation possible.
- They do the legwork. Lawyers can gather all the evidence required for a demand letter, and they will take care of any paperwork that needs to be filed or any other tedious or time-consuming tasks required to prepare the defense.
What Do I Need to Include in a Demand Letter?
The following items need to be included in a demand letter:
- From the police
- Police reports
- Witness statements
- From the hospital or doctors office
- Medical bills
- Names of doctors
- Dates of hospital visits
- Cost for any ambulances called
- Notes on recovery
- From an employer
- Calculated amount of time missed from work
- Total income lost
- Timecard or some sort of record to show if sick hours or vacation time was used
- Estimates from multiple mechanics
- Initial documents or notes on the following:
- Weather and road conditions at the time of the incident
- Speed and directions of both cars
- Any signs or signal issues that could have caused the accident
- Any negligence from either driver that contributed to the accident
- Anything one or more drivers did to try to prevent the accident
- A monetary demand based on the total of all expenses that will accurately cover the losses
When Should I Settle Privately?
Settling a car accident case privately may be advantageous if the following conditions apply:
- If the incident is a minor collision with little to no damages.
- If there is a single-car accident and no other parties were involved.
- If there are no injuries that will result in a claim later.
- After speaking to an experienced lawyer who can explain options.
Hazlet Car Accident Lawyers at Mikita & Roccanova Advocate for Victims of Car Accidents
If you or a loved one has been injured in a car accident, the Hazlet car accident lawyers at Mikita & Roccanova will advocate for your rights. We learn your story and help you every step of the way toward your legal compensation. Call us at 732-705-3363 or contact us online today to schedule a free consultation. Located in Hazlet and Highland Park, New Jersey, we serve clients in Ocean County and Sussex County, and Pennsylvania.