There are numerous reasons you might one day seek compensation from a party you think has wronged you in some capacity. For example, perhaps you’ve been injured in a car accident caused by someone else’s negligence. Maybe a loved one died unexpectedly due to the carelessness of another.
Or, you might have been injured as a result of a slip and fall accident. Maybe it could have been avoided if a property owner adequately took steps to protect you from harm.
There are two general ways you might go about pursuing compensation in these circumstances. One is to file a claim to collect from the negligent party’s insurance. Another is to file a lawsuit.
Many conflate filing a claim and suing someone. However, a claim is not the same as a lawsuit. This guide will help you better understand the difference between the two.
What is a Claim?
The negligent parties involved in personal injury cases often have some form of insurance through which a victim can seek compensation. Contrary to what some believe, it is often the insurance company who pays in these circumstances, and not the actual individual or entity who caused a victim harm.
Filing a claim involves submitting documentation to an insurance company demonstrating that:
- You were injured in some capacity
- Your injuries could have been avoided had another party not been negligent
- You sustained losses (such as medical bills, lost wages, etc.) for which you deserve monetary compensation
An adjuster will review the documentation you submit to determine how much compensation you deserve. Keep in mind, some adjusters will try to claim you don’t deserve any compensation at all. You need to prepare thoroughly to demonstrate that this is not the case.
If the insurance company does not deny your claim they will make an initial offer. This first offer is likely to be unreasonably low. Thus, the next step in the claims process may involve negotiating with the insurance company. Your goal is to settle the matter out-of-court in a manner that satisfies you.
What is a Lawsuit?
Some matters cannot be settled out-of-court. This may happen because an insurance company is unwilling to make a fair settlement offer. Additionally, there are instances when negligent parties do not have insurance to compensate their victims.
This is the key difference between a claim and a lawsuit. Filing a lawsuit involves preparing to go to court to seek the compensation you believe you are owed.
Filing a lawsuit also requires exceptionally thorough preparation. This is because you are no longer negotiating directly with the insurance company or at-fault party. Instead, you are presenting your case to a judge and jury.
You must be prepared to convince them that you are eligible for compensation. If the jury and judge don’t rule in your favor, you must accept their decision.
Pros & Cons of Claims
Benefits of filing a claim instead of a lawsuit include the following:
- A high likelihood of receiving compensation faster
- Less paperwork and administrative tasks
- Potentially greater control over the amount of compensation you may receive
However, filing a claim is not always the ideal option.
Drawbacks of claims may include:
- An insurance company could stubbornly prolong your case
- Your settlement might not be sufficient to compensate you for all relevant losses
- The insurer ultimately decides how much money you will receive
- The insurer is likely to blame you for the accident, reducing or completely denying your claim
Filing a claim is often the initial go-to option for victims in personal injury cases. There are many situations when it might not be the ideal choice.
Pros & Cons of Lawsuits
Filing a lawsuit instead of a claim is sometimes the best decision.
Benefits of filing a lawsuit include:
- A neutral outside party decides whether you deserve compensation (and how much you deserve if so), depriving the insurance company or negligent party of some power
- Your settlement may be higher if the judge and jury rule in your favor
- A skilled personal injury lawyer has access to significant resources to fight for you
- You could potentially receive additional compensation beyond what’s necessary to compensate you for your losses in the form of punitive damages
- No upfront costs to you – most personal injury lawyers only collect a fee if they win your case
However, there are also reasons you may be better off filing a claim and resolving the case out-of-court instead of filing a lawsuit.
Disadvantages of filing a lawsuit include:
- You may have a more difficult time proving your case using strict legal standards
- If your case goes to trial, relying on a jury can lead to unpredictable results
- Waiting longer to receive compensation than you otherwise would
The main point to understand is that there is no universal answer to the question of whether a claim is superior to a lawsuit. You need to account for various factors when determining how to pursue compensation.
The Importance of Legal Representation
The burden of deciding how best to go about seeking compensation in a personal injury case does not need to rest solely on your shoulders. Strongly consider hiring an attorney before making a decision. They can review your case and apply their legal expertise to determine which method of seeking compensation is best-suited to your circumstances.