Who Pays When You Sue in a Car Accident?
In most car accident claims, the insurance company involved pays when the claimant wins their case. The insurance company typically represents another driver but can also represent a business or government entity.
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Below we offer some more information about receiving compensation after a traffic accident. We cover the different parties you might name in your car accident lawsuit, the types of compensation you could receive, and the specific process of receiving money once your case has been resolved through a settlement or jury verdict in your favor.
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Defendants in Car Accident Claims
If you sue after a car accident, you have to name at least one defendant who you feel should pay for the economic and noneconomic losses you’ve incurred because of the accident and your injuries. Some car accident cases include two or more defendants because of multiple vehicles or their connection to the driver who caused an accident.
In most cases, the defendants you name in your car accident lawsuit carry auto insurance or another type of insurance policy that applies to your claim. Insurance companies act on behalf of their policyholders. So, if you sue John Doe, you are technically suing John Doe’s auto insurance provider.
Regardless of whether an insurance company is representing their policyholder, your car accident lawyer might suggest you name one or more of the following in your lawsuit:
Another Motorist
Other drivers remain the most common defendants in car accident lawsuits. Negligent motorists who make poor choices while operating their vehicles cause serious, sometimes deadly, car accidents. Driving under the influence, distracted driving, and drowsy driving are a few examples of negligent driving behaviors that can give rise to a car accident lawsuit. In most car accident cases, filing a claim against another insured driver means their bodily injury liability (BIL) insurance coverage will factor into the equation.
If an uninsured or underinsured driver caused your accident, your lawyer might advise you to bring a claim directly against the driver. In these situations, you can also receive some compensation by filing a claim under your uninsured or underinsured motorist coverage if you have these options on your auto insurance policy.
A Business
Various situations exist where your car accident lawyer might advise you to name a business in your lawsuit because their negligence led to the accident. Businesses can be partially or fully financially liable for damages, depending on the situation.
Here are some examples:
- A driver who causes a car accident is working and driving a company vehicle.
- An auto repair shop or mechanic performs subpar work that ultimately leads to a car accident after mechanical issues cause loss of control of a vehicle.
- A driver suffers a medical emergency and loses control of their vehicle because of an adverse reaction to a prescription drug or medical device failure.
- A drunk driver causes an accident after a bartender serves drinks to someone who is visibly intoxicated or a known alcoholic.
When businesses are involved in car accident lawsuits, an auto insurance carrier might not be. Sometimes commercial auto insurance coverage might play a part, but other types of commercial insurance often come into play if someone files a claim for damages against a business after a car accident.
An Auto Manufacturer
Companies that design and build auto parts and automobiles have a legal duty to bring safe cars to market. Yet, many cars, especially new models, suffer from design and/or manufacturing defects. Fortunately, quality control and inspections eliminate most defects before a particular model is released to the public.
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However, sometimes automakers do not know about a dangerous defect until consumers have experienced multiple accidents. In other situations, automakers know about hazardous aspects of their vehicles and choose not to inform the public of the issue.
If a product defect led to a car accident that caused you injuries, your lawyer might advise you to name the automaker when you sue after a car accident.
A City, County, or State
Although suing a government entity is rare after a car accident, it does happen on occasion. Villages, cities, towns, counties, and states have a legal duty to maintain public roads.
Interstates, highways, and roads with potholes, sinkholes, uncleared debris and dead animals, and other hazardous situations can lead to treacherous car accidents. Adequately maintaining roads also includes maintaining traffic control devices like traffic lights and stop signs.
Finally, some roads are deathtraps that frequently see car accidents, suggesting a poor road design. If any of these situations apply to your car accident, your lawyer will advise you to use the appropriate entity. Sometimes cities and towns have insurance for claims against them, but in most cases, they pay claims directly.
Types of Compensation in Car Accident Claims
If you reach a settlement or win your car accident claim, you could get paid for various accident-related losses. Here are examples of economic and noneconomic losses referred to as damages often included in car accident lawsuits. Victims can receive compensation for:
Current and Future Medical Treatment Costs
Car accidents come with various medical expenses. Sometimes these are one-time treatment costs, but sometimes victims must receive ongoing treatment. Ambulance transport to the nearest hospital for emergency room treatment is part of almost all major car accident claims. However, some victims need surgery and must stay in the hospital for days, weeks, or months. Doctors likely have to order several diagnostic scans and tests. Pain medication and other prescriptions also fall under the umbrella of treatment costs.
In the most severe car accident lawsuits, injured victims need continuous care and might need to move to a long-term nursing care facility. Health insurance rarely covers nursing homes unless a person purchases a special policy. Those who do not sue for damages could find themselves bankrupt at the expense of paying for long-term nursing care.
Rehabilitation Expenses
Car accident victims typically participate in various types of costly rehabilitation as their bodies heal from their injuries. For some, a little physical therapy is enough to help regain lost functions after an accident. However, those with the most severe injuries typically need hours of physical therapy each week. Many with severe injuries, especially permanent injuries, also need occupational therapy to learn how to do day-to-day activities in new ways. Rehabilitation can also include mental health services for those who suffer emotional trauma from their accident.
Lost Income
Severe car accidents lead to injuries that force people to take time away from work, sometimes for months. Full-time workers can use paid time off, such as vacation and sick days, but this doesn’t provide income for very long, especially with severe injuries. Part-time workers don’t have the same benefit and might face a much bigger financial burden. Car accident claims typically include compensation for this lost income.
Lost Earning Capacity
The most severe car crashes can leave victims with catastrophic injuries that prevent them from returning to work or seeking future employment. In these situations, lawyers include lost earning capacity in the demand for damages after a car accident. Lost earning capacity compensates accident victims for the income they would have earned over their lifetime had they not suffered car accident injuries. Car accident claims that include future lost earnings or salary often have a much higher value than other car accident claims.
Pain and Suffering
Severe traffic accidents have physical and emotional consequences for those involved. Those with severe injuries often experience massive pain. Sometimes the pain subsides during recovery, but other times, victims face chronic, lifetime discomfort and pain.
Additionally, car accident victims can face emotional distress from the trauma of the accident, and they might deal with mental health issues because of their injuries. Those who suffer scars and permanent injuries are most vulnerable to mental health struggles.
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For example, someone who loses a limb or suffers severe burns in a highly visible area of the body has to suffer the embarrassment of scarring and disfigurement. Lawyers and insurance companies evaluate pain and suffering and include it in compensation for victims.
Loss of Consortium
Car accident victims may also experience physical and emotional struggles in marital relationships. Loss of consortium is the legal community’s term to describe struggles that couples suffer inside and outside of the bedroom due to injuries. It can refer to a loss of physical intimacy but also a loss of emotional intimacy because a car accident victim is struggling with aspects of their injuries.
Reduced Quality of Life
Car accident victims who suffer severe injuries cannot do many of the same hobbies and activities they did before their accident. Sometimes permanent injuries make it impossible.
Other times victims face chronic pain issues. In either case, this reduced quality of life refers to the loss of enjoyment people face because of their car accident injuries. For example, victims who can no longer play sports, go to the gym, or travel, suffer from a reduced quality of life. Sometimes accident victims receive compensation for this change in their situation.
The Process of Seeking Compensation After a Car Accident
Understanding who pays if you sue after a car accident and the types of compensation that might be included needs further explanation in the context of the legal process of a car accident lawsuit. Below we discuss how personal injury protection (PIP) coverage impacts car accident lawsuits and when you can expect to have funds in your pocket if you win your car accident claim.
PIP Benefits Reduce Compensation for Car Accident Victims
Pennsylvania, New Jersey, and Florida are a few of several states that operate on a no-fault insurance system. Pennsylvania residents can opt-out, but in most states, residents who register a vehicle must carry minimum amounts of personal injury protection (PIP) or another type of no-fault insurance for lost income and medical expenses. In these states, everyone involved in a car accident files a claim with their insurance company under their own no-fault coverage. An approved claim will pay up to their policy limits.
Unfortunately, PIP insurance limits are low, so benefits rarely cover severe injuries that require surgery and hospitalization. Also, PIP coverage does not cover pain and suffering, loss of consortium, and other non-economic damages that car accident victims suffer.
Fortunately, victims can file a lawsuit to recover additional compensation. However, lawyers and insurance companies subtract any PIP benefits, reducing the compensation that the defendant pays a victim. An experienced car accident attorney can help you take advantage of all insurance options and take legal action, giving you the best chance of receiving maximum compensation for your injuries.
Receiving Payment After Resolving Your Car Accident Claim
Car accident claims typically get resolved in one of two ways. Most car accident victims reach a settlement agreement with the insurance company involved in the claim.
This might require a lawyer to file a lawsuit to get the insurance carrier to agree to pay fair compensation. In other cases, a lawyer can file an insurance claim on behalf of their client and send a demand letter to start settlement negotiations. Both sides have the incentive to reach an agreeable number because going to trial is expensive, and neither side wants to risk letting a jury decide the outcome.
When liability disputes muddy the waters, some car accident claims must go to trial. If you use and your car accident claim goes to trial, you will only receive compensation if the jury rules in your favor and awards you damages. Even after you win your case, you will have to wait a few weeks before seeing any money.
Once you sign the final documents for a settlement or court-awarded damages, the insurance company will usually send a check within 30 days. Your attorney will likely receive the check and use the funds to pay any outstanding medical bills related to the accident and your injuries. Next, they deduct attorney fees and other legal costs. Finally, your personal injury lawyer in Philadelphia will issue you the balance of the payment.
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