9 Things That Victims Need to Know About Car Accident Settlements

Man calling roadside emergency after car accident

Every year, between 20 and 50 million people get injured in car accidents. Are you part of this group?

If you were recently injured in a car accident, you probably have a lot of questions, especially when it comes to your settlement. You might be wondering how long it’ll take for you to receive your settlement, for example, or what you can do if your settlement seems unfair.

Read on for answers to these questions and more. Listed below are 9 things everyone needs to know about car accident settlements.

1. You Need to Report the Accident

If you want to receive a settlement from the insurance company for your accident, the first step is to report the accident to the proper authorities.

In most states, this is required by law, and you’ll need to contact the police as soon as possible. This is especially important if you or anyone else was injured in the accident. 

2. At-Fault vs No-Fault System

You should find out, too, whether your state operates under an at-fault or no-fault system. Here are the key differences between the two:


Most states follow this system. Under it, the person who is at fault for the accident is responsible for the damages. If another driver is responsible for your accident, you can seek a settlement through your own insurance company, through their insurance company, or from their directly (if you file a lawsuit).


A few states operate under a no-fault system, including the following:

  • Florida
  • New Jersey
  • Michigan
  • Pennsylvania
  • New York
  • Utah
  • North Dakota
  • Minnesota
  • Massachusetts
  • Hawaii
  • Kentucky
  • Kansas

In these states, you can collect damages no matter who caused the car accident. This means your insurance company will pay for your personal injuries (according to your specific policy limits). You cannot sue the other driver in a no-fault state, though, nor can they sue you.

3. Statute of Limitations

Every state has different statutes of limitations when it comes to filing injury claims after a car accident. You’ll need to do some research to see what the law is in your state. In most cases, though, you have somewhere between one and six years to file a lawsuit or claim.

It’s better to act sooner rather than later. If you wait, it can be harder to build a strong case for yourself and you might not get as large of a settlement as you deserve.

4. How Are Settlements Calculated?

There are a lot of factors that go into the process of calculating a settlement. Every insurance company has a slightly different approach that they take.

In most cases, though, they’ll consider the following when determining how much to pay you:

  • The extent of your injuries
  • The extent of the damage to your car
  • The existence of injuries prior to your accident
  • How soon after the accident you sought medical attention
  • The level of treatment you received and whether or not it seems “excessive”

They’ll also consider your age, general health, and the conditions that led to the car accident.  

5. Settlement Agreements Release the Insurance Company

When you receive a settlement agreement from the insurance company, you might be tempted to sign it right away and get things moving. Keep in mind, though, that once you sign that agreement, you’ve released the insurance company.

This means you can’t go after them if you find that you have additional injuries. You also cannot file another claim if you discover additional damage to your vehicle.

6. The First Offer Is Rarely the Best One

Remember, too, that the first settlement offer you receive is rarely the best one. Insurance companies want to get away with paying as little as possible. As a result, they’ll offer you a very low settlement in hopes that you’ll release them and save them from paying more than they’d like.

There’s almost always room for negotiation, though. Be wary of accepting the first offer that comes your way.

7. Don’t Sign Without Knowing Everything

Because of the weight that settlement agreements carry, it’s imperative that you avoid signing one until you understand the full extent of your situation. This means understanding exactly how severe your injuries are, as well as how they’re likely to affect you long-term.

Will you have to change jobs or modify your work because of them? How much are you expecting to pay for treatment (including things like physical therapy or occupational therapy)? Take all this into account to ensure you get a settlement that covers everything you need.

8. Having an Attorney Evens the Playing Field

It might seem excessive at first to hire an attorney to help you with your case. Remember, though, that having an attorney helps to even the playing field between you and the insurance company. When they find out that you’ve hired an attorney to assist you, they’ll know that you’re taking the situation seriously and won’t back down without a fight.

9. When to Call an Attorney

There are certain situations in which you absolutely need to have the best car accident attorney on your side. For example, if you’ve been hit with a low-ball settlement agreement and need help negotiating.

You can also benefit from hiring an attorney if the insurance company is refusing to pay. The same is true if they seem to be trying to use certain aspects of your situation (previous injuries, for example) against you.

Put Your Knowledge of Car Accident Settlements to the Test

At this point, you likely have more information about car accident settlements than you ever thought you’d need. Now that you have this knowledge at your fingertips, though, you can put it to good use and ensure you get the kind of settlement you deserve.

It doesn’t matter if you’re waiting for your settlement or have found out it’s lower than you’d like. Either way, this information will come in very handy.

Be sure to check out some of our other car accident-related articles today as well. They’ll provide you with more tips on how you can get the most out of your settlement and get back on your feet as soon as possible.

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