The Difference Between a Claim vs. a Lawsuit

The Difference Between a Claim vs. a Lawsuit

When you’re injured in an accident, you naturally want to know how to recover compensation for medical bills, lost wages and other damages. Two common paths are filing an insurance claim or pursuing a lawsuit. They may sound similar, but they’re actually very different processes. Understanding the distinction between a claim vs. a lawsuit, especially under Arizona law, can help you make informed decisions about your next steps.

Insurance Claim vs. Lawsuit: What's the Difference?

A claim and a lawsuit are both methods of seeking compensation after an accident or injury. The main difference is that a claim is filed with an insurance company, while a lawsuit is filed in court. In most personal injury situations, a claim comes first.

What Is a Claim?

A claim is a request for compensation that you submit directly to an insurance company. For example, if you were hurt in a car accident caused by another driver, you would typically file a claim with that driver’s auto insurer. The insurance company then decides whether to pay for your damages.

The main difference between a claim and a lawsuit is that claims are handled outside the court system. They are generally less formal, quicker to resolve and less expensive.

Arizona follows a fault-based system for auto accidents, meaning you typically pursue the at-fault driver’s liability insurance, though you can also use your own MedPay or UM/UIM coverage if applicable.

What Is a Lawsuit?

A lawsuit is a legal action filed in civil court when you and the insurance company cannot agree on fair compensation. Instead of relying on an insurance adjuster, a judge or jury ultimately decides who is responsible and how much compensation is owed.

Unlike a claim, which stays between you and the insurance company, a lawsuit becomes part of the public record and follows strict legal procedures. It can provide a path to justice when insurers deny valid claims or refuse to offer fair settlements. However, lawsuits also take longer and typically involve attorney fees, court costs and more preparation than an insurance claim.

In Arizona, most personal injury lawsuits must be filed within two years of the date of injury. If the claim involves a government entity, you must first file a Notice of Claim within 180 days and then bring suit within one year. Missing these deadlines can bar recovery entirely.

What’s the Process of Filing a Personal Injury Claim?

Because claims are quicker and easier to pursue than lawsuits, they’re usually the first step after an accident. Filing a claim allows you to start the compensation process without immediately involving the courts.

1. Submit Your Claim to the Insurance Company

The process starts by notifying the at-fault party’s insurance company about the accident and your injuries. Along with basic information, you’ll often need to provide supporting documentation such as medical records, accident reports and repair estimates. The more thorough your evidence, the stronger your claim will be.

Arizona follows a pure comparative negligence rule. Even if you’re partly at fault, you can still recover damages, though your compensation will be reduced by your percentage of fault.

2. Cooperate With the Insurer’s Investigation

After your claim is filed, the insurance company assigns an adjuster to investigate. The adjuster reviews the evidence, interviews witnesses if necessary and may even inspect damaged property. Their goal is to decide who was responsible and how much the claim is worth. Keep in mind that adjusters work for the insurance company, so they may look for reasons to reduce or deny your claim.

3. Review the Settlement Offer or Denial

Once the investigation is complete, the insurance company makes a decision. They may approve the claim and issue payment, deny it altogether or offer a settlement that is less than you requested. If the offer doesn’t cover your damages, you have the right to appeal, or, if needed, escalate the matter into a lawsuit.

Be mindful of the two-year statute of limitations—ongoing claim negotiations do not pause this deadline. If you’re approaching two years without a fair settlement, you must file a lawsuit to preserve your rights.

What’s the Process of Filing a Personal Injury Lawsuit?

If an insurance company refuses to fairly compensate you, you’re not stuck with that result. A lawsuit provides a formal legal path to pursue justice and recover damages. While it requires more time and preparation, it can be the best way to ensure you receive the full value of your claim, especially in cases involving significant injuries or disputed liability.

1. Meet With an Attorney

Your first step is consulting with a personal injury lawyer. They will assess the strength of your case, explain your legal options and begin gathering the evidence needed to support your case. Having legal guidance early on can make a major difference in how smoothly the lawsuit proceeds.

2. Draft and File the Complaint

Next, your attorney prepares a formal complaint. This legal document outlines who you are suing, the facts of the case, the injuries you suffered and the damages you’re seeking. Once complete, the complaint is filed with the appropriate court to officially start the lawsuit.

3. Notify the Defendant

After filing, the defendant must be formally served with the complaint. Service of process ensures the defendant is aware of the lawsuit and able to respond. Proper service is essential. In Arizona, service must generally be completed within 90 days of filing, or the case risks dismissal.

4. Await the Defendant’s Response

The defendant has a limited time, often 20 to 30 days, to file a response. They may admit fault, deny responsibility or raise counterclaims. This sets the stage for how the lawsuit will proceed and whether it is likely to settle quickly or move into a longer process.

5. Enter the Discovery Phase

Discovery is where both sides exchange evidence, request documents and take depositions of witnesses. It can last several months, but it plays a central role in shaping the outcome of the case. Many lawsuits actually settle during discovery, once the strength of the evidence becomes clear. If a settlement isn’t possible, the case may go to court, where a judge or jury will make the final decision.

Should You Seek Compensation Through an Injury Claim or an Injury Lawsuit?

Deciding between an insurance claim and a lawsuit depends on several factors. Claims are generally faster, less costly and more straightforward. If your injuries are minor and your damages relatively small, pursuing a claim may be all you need.

However, lawsuits may be necessary in situations where the insurance company denies your claim, disputes liability or damages exceed claim limits. Lawsuits tend to take longer and involve more expense, but they can result in fairer compensation, especially for serious or life-changing injuries.

For smaller disputes, Arizona also offers Small Claims Court (under $3,500) and Justice Court (up to $10,000), which are faster and less formal than Superior Court.

It’s also worth noting that sometimes appealing a denied claim may be a smarter option than filing a lawsuit, particularly if the damages don’t justify the time and resources of litigation.

Let a Lawyer Help You Decide if an Insurance Claim or a Lawsuit Has the Best Outcome

Determining whether to pursue a claim or file a lawsuit isn’t always straightforward. At Sargon Law Group, we specialize in personal injury cases in Arizona and have extensive experience handling both insurance claims and lawsuits. Whether your claim was denied or undervalued or you’re considering filing a lawsuit, our team is here to fight for the compensation you deserve.

Contact us today and see how one of our personal injury attorneys can help you decide whether you need to file a claim or lawsuit.