If you’ve been injured in Minneapolis, MN, understanding the difference between a claim and a lawsuit is crucial for pursuing compensation.
Best Minneapolis personal injury attorneys help accident victims understand whether filing an insurance claim or a lawsuit is the best approach for their situation.
What Is a Personal Injury Claim?
A personal injury claim is typically the first step in seeking compensation after an injury. This process involves working directly with insurance companies rather than the court system.
When you file a claim, here’s what typically happens:
- You submit a notice to the at-fault party’s insurance company stating that you were injured and believe their insured is responsible.
- You provide documentation of your injuries and damages, including medical records, bills, proof of lost wages, and other evidence.
- The insurance adjuster evaluates your claim and may conduct an investigation.
- You or your attorney negotiate with the insurance company to reach a settlement.
Claims are generally less formal and less adversarial than lawsuits. According to Forbes, most personal injury cases are settled through the claims process without ever going to court.
What Is a Personal Injury Lawsuit?
A lawsuit is a formal legal action filed with the court when a claim cannot be resolved through negotiation with the insurance company. Filing a lawsuit escalates the matter and brings it under the court system’s jurisdiction.
The lawsuit process typically involves these steps:
- Your attorney files a complaint with the appropriate court, formally stating your allegations against the defendant.
- The defendant is served with the complaint and must respond within a specified timeframe.
- Both sides engage in discovery, a formal process of exchanging information and evidence.
- Your case may go through mediation or other alternative dispute resolution methods.
- If no settlement is reached, your case proceeds to trial, where a judge or jury will decide the outcome.
Lawsuits generally take longer to resolve than claims and involve more formal procedures, but they may be necessary when insurance companies refuse to offer fair compensation.
Key Differences Between Claims and Lawsuits
Understanding the major differences between these two processes can help you make informed decisions about your case:
Formality and Legal Requirements
Claims are less formal talks with insurance companies. You’re asking the insurer to pay for damages caused by their insured.
Lawsuits, however, must follow strict rules set by the rules of civil procedure. If you don’t follow these rules, your case might be dismissed, no matter how strong it is.
Timeline Considerations
Claims typically resolve faster than lawsuits. A straightforward claim might settle within a few months, while complex cases can take longer.
Lawsuits often take one to three years or more to complete, depending on the court’s schedule, the complexity of the case, and whether appeals are filed.
There are strict time limits for filing both claims and lawsuits. Missing these deadlines can permanently bar you from seeking payment, which is why talking to an attorney soon after an injury is important.
Control Over the Outcome
With a claim, the insurance company decides whether to pay and how much to offer. Your power comes from the implied threat of a lawsuit if they don’t offer fair compensation.
In a lawsuit, if no settlement is reached, a judge or jury decides who’s at fault and how much they owe. This gives you a chance to have your case heard if the insurance company isn’t fair.
Cost Considerations
The claims process is generally less expensive because it avoids many court fees and costs associated with litigation.
Lawsuits involve filing fees, deposition costs, expert witness fees, and other expenses that can add up quickly. However, most personal injury attorneys work on a contingency fee basis, meaning you don’t pay these costs upfront.
When a Claim Becomes a Lawsuit
Many personal injury cases start as claims and only become lawsuits when necessary.
Common reasons for escalating to a lawsuit include:
- The insurance company denies liability for the accident.
- The settlement offer is too low to cover your damages.
- The claim is complex and involves disputed facts or legal issues.
- The insurance company is acting in bad faith.
- The deadline for filing a lawsuit is approaching, and negotiations are stalled.
Converting a claim to a lawsuit doesn’t end talks with the insurance company. Many lawsuits settle before trial, often during the evidence-gathering phase when both sides see the full picture.
Benefits of Starting With a Claim
There are several advantages to beginning with the claims process:
- It’s faster and less expensive than immediately filing a lawsuit.
- It allows you to avoid the stress and uncertainty of court proceedings.
- You maintain more control over the settlement negotiations.
- It keeps communication channels open between you and the insurance company.
Most attorneys recommend exhausting the claims process before filing a lawsuit unless special circumstances warrant immediate legal action.
When to Skip the Claim and File a Lawsuit
In some situations, it makes sense to bypass the claims process:
- When the time limit for filing a lawsuit is about to expire.
- In cases involving government entities, which often have special notice rules.
- When the insurance company has shown bad faith from the start.
- In cases with severe injuries, where the policy limits are clearly not enough.
An experienced personal injury attorney can advise you on whether your situation calls for beginning with a claim or moving directly to a lawsuit.
The Value of Legal Representation
Whether you’re pursuing a claim or lawsuit, having a lawyer greatly improves your chances of getting fair payment.
An attorney can:
- Accurately value your claim, including future costs you might not think about.
- Handle all talks with insurance adjusters and defense attorneys.
- Gather and preserve evidence to make your case stronger.
- Negotiate effectively based on experience with similar cases.
- Make sure all deadlines and legal requirements are met.
Understanding the difference between a claim and a lawsuit can help you confidently navigate the legal process. If you’ve been hurt because of someone else’s carelessness in Minneapolis, reach out to Hall Law Personal Injury Attorneys to discuss which approach is right for your situation. You can contact us online or call (800) 292-1979.
