When you work with a personal injury lawyer to pursue an accident claim, your lawyer will start the settlement process by sending a demand letter to the at-fault party’s insurance company. While you might be relieved to know that things are in motion, you might also wonder: How long after the demand letter can I expect a settlement?
The settlement process can take anywhere from several weeks to several months or even longer. Understanding what happens after sending a demand letter can help you rest easy while your legal team works to secure the compensation you rightfully deserve.
What Goes Into a Personal Injury Demand Letter?
The contents of your demand letter can affect the timeline of your overall case. Your lawyer will outline all of the damages you suffered in the accident, along with related documentation, and specify the amount of compensation they expect you to receive. If you have many forms of recoverable damages, it can take longer for the insurance company to review your demands.
Overall, your demand letter should include:
- A detailed description of the accident
- A summary of your medical expenses, lost wages and other damages
- An explanation of who is liable and how they violated the laws
- Police reports, medical records and other documents to support the accusation of liability
- Specific compensation demands, a deadline and consequences of non-response
Being thorough in the initial demand letter will put you in a stronger position when you and your legal team are negotiating a settlement.
What Happens After Sending the Demand Letter?
After your lawyer
sends a demand letter, the insurance company will conduct its own review of your claim. An insurance adjuster will investigate the accident and search for evidence to support the company’s interests. When they are ready, the insurance company will send a response to the demand letter with their counteroffer.
It can be frustrating to wait for the insurer’s response when you already have medical bills or property repairs you have to pay for. In the meantime, you can turn to your own health insurance or collision coverage to help pay your bills. Keep in mind that your insurance company can place a lien on your settlement to ensure they receive reimbursement once you get compensation from the at-fault party’s insurer.
How Long Will Settlement Negotiations Take?
Even after you finally get a response from the insurance company, there might still be weeks or months of negotiations to go through before you get your settlement. The back-and-forth discussions and counteroffers can take considerable time, especially if there are many types of evidence and complicating factors to sift through at the negotiating table.
However, lawyers have a number of
negotiating tactics they can use to expedite the process and bring about a better outcome. Attorneys know how to adapt their strategies to different types of personal injury cases. They can take the initiative at key moments to make counteroffers and extend agreement terms that put you in a stronger position for your claim.
What Happens if You Reject a Settlement Offer?
Rejecting a settlement offer is extremely common, and it usually will not harm your case. After the insurance company receives your demand letter, it will likely respond with a settlement offer. The company may intentionally offer an amount that is lower than you deserve. While the insurer would be happy for you to accept this lowball offer, they likely expect you to reject it.
This is a common negotiation strategy. Each side will extend offers and counteroffers that are lower or higher than what the other is willing to accept. Each rejection will bring negotiations closer to a number that will satisfy both sides.
When you have strong evidence of the other party’s negligence and thorough documentation of your recoverable damages, rejecting a settlement offer will give you the chance to demand proper compensation. If the insurance company refuses to provide a
reasonable settlement, though, it may be necessary to take your case to trial instead.
What Should You Do After Receiving Your Settlement?
After receiving your personal injury settlement, there are certain financial obligations you should fulfill before spending the money or intermingling your finances. First and foremost, make sure to pay any outstanding medical bills or liens leftover from your accident. You likely will not need to worry about legal fees–your lawyer will extract their agreed-upon fees and handle other legal expenses before disbursing the settlement to you.
You should also determine if you will need to
pay taxes on your settlement. The IRS considers all income from any source as being taxable, including income from lawsuit settlements, unless exempted in another section of the Internal Revenue Code.
There is an exemption in
IRC Code 104, which states that damages received on account of personal injuries do not count as taxable income. This means that you do not have to pay taxes on a personal injury settlement in most cases. If your lawsuit settlement includes compensation for damages unrelated to a personal injury, though, you might still owe taxes on part of the settlement.
Can You Send Another Demand Letter After Getting a Settlement?
If you receive a settlement for your accident and later find out that it did not actually cover all of your damages, you might wonder if you can simply send another demand letter for the rest of your losses. However, this is usually not possible. You cannot
reopen a lawsuit after settlement unless there are very specific circumstances to allow it.
The reason for this is that most settlement agreements include a “release of liability.” Signing an agreement with this release means that you legally acknowledge that the other party is no longer liable for your damages. If it comes to light that the insurance company committed fraud or engaged in coercive behavior, though, it may be possible to reopen the settlement and send another demand letter.
Sargon Law Group Can Represent Your Settlement Case
The settlement process can be lengthy, but the right attorney will stay in constant communication so you never have to wonder how long after a demand letter you can expect a settlement. At Sargon Law Group, our
personal injury lawyers make sure you stay informed about your claim every step of the way.
Contact us today to schedule a free consultation and case evaluation. Our attorneys in Arizona, New Mexico, Colorado and California are ready to answer any questions you have about your settlement claim.
Resources:
https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section104&num=0&edition=prelim
