If you have been injured in a car accident or other type of accident, you might immediately think you need to file a lawsuit to recover your damages. However, most injury claims are settled without ever stepping foot inside a courtroom.
So, just what is the difference between a claim and a lawsuit? A claim does not require any court filings, while a lawsuit must follow all the legal procedures of the court system. There are other important differences between the two as well as pros and cons to each. Dive into all the details below to learn the differences and when you might need to use each.
What is a Claim?
After an accident, you may be entitled to recover several types of damages. These damages can include:
- Medical bills
- Lost wages
- Pain and suffering
- Mental anguish
- Property damage
The first step to recovering compensation for your losses is typically to file a claim with the insurance company. If another driver was responsible for the crash, you would typically file a claim with their insurance carrier. An insurance claim is simply a formal request to the insurance company that they pay for losses covered under an insurance policy.
Once a claim is filed, the insurance company usually assigns an adjuster to it. The adjuster investigates the claim, including the facts surrounding the accident and the amount of compensation requested. The adjuster may decide to pay the claim, deny it, or make a counteroffer. A lawsuit may be required if the claim is denied or the counteroffer is not fair.
What is a Lawsuit?
A lawsuit is an action brought against another person in civil court seeking damages against them. The person bringing the lawsuit (plaintiff) is requesting that the court order the other party (defendant) to compensate them for their losses.
Lawsuits are usually required when the matter cannot be resolved through the regular claims process. Filing a lawsuit usually requires the help of an attorney, and all the paperwork and documents must adhere to the court’s rules.
A judge or jury will ultimately hear the arguments of both sides and decide the outcome of the lawsuit. The decision is final, and both parties must adhere to the decision of the court. Lawsuits can be lengthy and expensive and usually avoided whenever possible.
Claim vs. Lawsuit: Pros and Cons of Each
While lawsuits are usually avoided when possible, they are sometimes necessary to achieve the outcome you desire – especially in a personal injury case. Both claims and lawsuits can have some advantages as well as drawbacks. Some of the advantages of a claim include:
- There are fewer formalities and less paperwork.
- You can receive compensation more efficiently because the settlement timeline is quicker than going through the court system.
- There are fewer expenses since you may avoid court costs and attorney’s fees
- There is flexibility with regard to negotiating compensation.
Claims are not without flaws. They do have some cons associated with them, such as:
- The final decision on the amount of compensation rests with the insurance company.
- Insurance companies may delay paying claims, and this can put you in a difficult financial situation.
- The offer may not compensate you for all your losses.
While settling a claim out of court is typically preferred, there are times when a lawsuit is necessary. Lawsuits can offer some benefits, especially for those who are seeking compensation after an accident. Some benefits of lawsuits include:
- A neutral third party gets to hear and decide your case.
- You could be awarded more damages than what the insurance company was offering.
- In some situations, you may be entitled to punitive damages.
Remember that there is a reason why many claimants try to avoid lawsuits. While lawsuits are sometimes necessary, there are some drawbacks associated with them. Examples of drawbacks associated with lawsuits are:
- Lawsuits can be time-consuming – sometimes taking a year or more to complete.
- You could end up with less compensation than you were originally offered.
- Expenses associated with lawsuits are high, including filing fees, court costs, cost of expert witnesses, and attorney’s fees.
The specifics of your situation will help you decide whether you should file a claim or a lawsuit. It is also a good idea to seek the help of an experienced attorney. Personal injury attorneys from Pines Salomon Injury Lawyers, LLP have experience negotiating with insurance companies and getting compensation for injury victims. Contact us today at (858) 551-2090, we can give you an accurate estimate of your claim’s value and assist with filing a lawsuit should one be needed.
