Settling a Personal Injury Claim with an Insurance Company


The vast majority of personal injury claims settle out of court. The main reason for this is that courtroom trials are expensive, time-consuming, stressful, and, above all, unpredictable. Nobody really knows what a jury will decide. The typical resolution process involves settlement negotiations, with the implied threat of litigation if settlement efforts don’t work. Settlement negotiation efforts tend to follow a typical pattern.



The investigation phase starts with the free initial case consultation that most personal injury lawyers offer. The lawyer will listen to your story and answer your questions. After that, they will present you with an evaluation of your case, after which point you can both decide whether the case is worth pursuing.

If you decide to hire a lawyer, they will conduct a more extensive investigation that includes activities such as:

  • Obtaining a copy of the accident report;
  • Photographing the scene of the accident;
  • Interviewing witnesses: and
  • Numerous other measures (perhaps your accident was filmed on CCTV, for example).

The purposes of the investigation are to understand the case better and to gather evidence that will give you bargaining power during settlement negotiations.

The Settlement Demand Letter

Sending a settlement demand letter is the way that you formally initiate a civil claim against a defendant or an insurance company (usually an insurance company). A settlement demand letter should include the following components:

  • The identity and contact details of the injured victim and the intended recipient;
  • A brief description of the accident;
  • A description of your losses and how they affected you (for example, that you were unable to work for a month);
  • An explanation of why you were entitled to compensation (“…the insured party ran a red light and plowed into my car…”, for example); and
  • A demand for compensation. Ask your lawyer whether you should demand a specific monetary amount.

If you have a lawyer, it is the lawyer who should send the letter to the defendant or the insurance company on your behalf. 

Insurance Policy Limits and Loopholes

No insurance policies offer infinite coverage. There is always a limit, and that limit applies no matter how much of your claim hasn’t been paid yet. In that situation, personal injury lawyers often go looking for third parties (such as employers) who might bear liability for some reason or another.

Another potential limitation is coverage exclusions. Imagine you suffered a devastating attack by your neighbor’s pit bull. You seek compensation from your neighbor’s homeowners’ insurance policy, only to find that it contains an exclusion for pit bulls and rottweilers. If it had contained an ambiguous exclusion for “vicious breeds of dogs,” you might have still been able to negotiate a settlement.

Workers’ Compensation Claims

Workers’ compensation insurance covers you for work-related injuries (everything from a broken leg to carpal tunnels). The good news is that you don’t have to prove that your employer was at fault to win. The bad news is that you cannot sue your employer in court, and you cannot receive non-economic damages such as pain and suffering. Sometimes there are ways around these compensation limitations, however.

Hardball Tactic: Filing a Complaint With the Court

If the defendant or the insurance company turns out to be stubborn and refuses to offer you an acceptable settlement, it might be time to play hardball. “Hardball” in this case means filing a formal complaint, thereby initiating a lawsuit. Keep in mind that you can settle right in the middle of the lawsuit, even during trial.

The main purpose of filing a lawsuit is that it gives you (and the defendant) court-enforced access to evidence that is in possession of the opposing party through the pretrial discovery procedure. Some of the tools you can use to gather evidence include:

  • Depositions: Sworn testimony, elicited orally and in Q&A style, that takes place outside of court (and, typically, outside the presence of the judge).
  •  Interrogatories:: Written questions that the opposing party must answer under oath.
  • Requests for evidence: Requests for copies of documents, the opportunity to inspect physical evidence, and other demands for access to evidence that you cannot satisfy via depositions or interrogatories.
  • Admissions: Requests for a party to admit a certain fact (their presence in Ocala, Florida, on June 15, 2022, for example). This way, you don’t have to bother with proving it. This process simplifies the case for both sides.  

If the statute of limitations deadline is approaching, you might be forced to file a lawsuit to preserve your claim. In Florida, the statute of limitations for most personal injury claims was recently changed. The deadline is four years if the accident happened on or before 3/23/2023, and it is four years otherwise. However, there are exceptions in some cases.

Hardball Tactic: “Bad Faith” Insurance Claims

You can expect an insurance company to attempt many slippery maneuvers to minimize the value of your claim. Past a certain point, however, this behavior becomes illegal, and Florida gives you the legal means to fight back.

It is oftentimes easier to sue your own insurance company for “bad faith” than to sue the insurance company for the party against whom you are asserting a third-party claim. That is because your own insurance company owes you a higher duty of good faith (roughly, “honest intentions”) than a third-party insurance company does. 

Regardless, bad faith claims are difficult to win. If you do win, you get two sets of compensation–one for your claim and one for the insurance company’s bad faith.

Dealing With Florida’s Ineffective Car Accident Compensation System

Florida’s “no-fault” system is notorious for its inability to compensate injury victims who were seriously injured by at-fault drivers. Initially, it is a no-fault system. You must purchase $10,000 in Personal Injury Protection (PIP) insurance for your own injuries. 

You must look first to your own PIP insurance for compensation, regardless of whose fault the accident was. If your injuries are serious enough, you can sue the at-fault driver. But since Florida doesn’t require its drivers to purchase liability insurance, where will the money come from?

“Deep-Pockets” Defendants

When the original defendant is uninsured or insufficiently insured, you can seek other possible defendants who might bear liability and possess the financial resources to pay your claim. Such parties might include:

  • At-fault drivers who purchased more than the legally required minimum insurance.
  • Employers whose employee’s misconduct injured you while they were acting within ‌the scope of their employment.
  • Bars and nightclubs that serve alcohol to minors or known alcoholics, who then injure you through their resulting intoxication (under Florida’s dram shop law).
  • Professionals who commit malpractice. Doctors, for example, are particularly well-insured.
  • Well-insured drivers such as commercial truckers and on-duty Uber/Lyft drivers.
  • An out-of-state driver whose home state requires them to purchase liability insurance.
  • A wealthy individual who caused the accident that injured you.

If you can afford to, you can avoid this problem by purchasing enough insurance to cover your potential losses. The legal minimum for PIP insurance ($10,000) is not the legal maximum – you can purchase more.

Drafting a Settlement Agreement

All legally binding contracts are tricky to draft. Your best bet is to have your lawyer either draft the settlement agreement or carefully examine any settlement agreement drawn up by the other side. Remember, your lawyer cannot settle your case without your consent.

Let an Experienced Personal Injury Lawyer Negotiate Your Claim for You

Negotiating your own claim is not a good idea unless the amount is very small. Insurance adjusters and lawyers in corporate legal departments are professional negotiators. You are going to need a professional negotiator on your side, too. Call Allen Law Accident & Injury Lawyers at (877) 255-3652 or contact us online.