Claim vs. Lawsuit

If you have been injured in an accident, you may have the right to seek compensation for your medical bills and other damages from the responsible party. There are two main ways to do this: a personal injury claim or a lawsuit. 

These terms are often used interchangeably, but they refer to different methods of formally seeking compensation. Understanding the difference is important as you consider your legal options and decide how to pursue compensation.

What Is a Personal Injury Claim?

A personal injury claim is the first step most people take after an accident. This is usually a request for compensation filed with an insurance company.

You or your attorney will notify the insurer of your injuries and losses. Claims are usually filed against the at-fault party’s insurance policy, but there are exceptions. You may file a claim against your own policy if the other party is uninsured or can’t be located, for instance. 

This begins the negotiation process to try to reach a fair settlement.

Common types of claims include:

• Car accident claims filed with the at-fault driver’s insurance
• Premises liability claims filed with a property owner’s insurance
• Workers’ compensation claims, filed with your employer’s insurer if applicable

Most injury cases begin and end with a claim. 

What Is a Personal Injury Lawsuit?

A lawsuit is a formal legal action you file in civil court. Unlike a claim, which is usually handled by an insurance company, a lawsuit may go to trial, with the outcome decided by a judge or jury. 

This usually happens when:

• The insurance company denies or undervalues your claim
• The settlement offer is too low
• There’s a dispute over who was at fault
• Your injuries are severe and involve substantial losses
• Your full damages can’t be compensated adequately through a claim

Filing a lawsuit doesn’t necessarily mean your case will go to trial. Often, the threat of a lawsuit leads to more serious settlement negotiations. But if a fair deal can’t be reached, a judge or jury will decide the outcome.

Key Differences Between a Personal Injury Claim and a Lawsuit

Here are some key differences to help you better understand the difference between these types of formal demands for compensation. 

Where It’s Handled

A claim is generally handled by an insurance company. A lawsuit is handled in civil court. 

Who Decides the Outcome

With an injury claim, the outcome is decided by the insurance adjuster and you or your attorney. A lawsuit is ultimately decided by a judge or a jury. Most personal injury cases reach a pre-trial settlement. 

Typical Timeline

The timeline depends on the type and complexity of the case. As a general rule, a personal injury claim may be resolved within weeks or months. A lawsuit usually takes months or even years. 

Available Compensation

A lawsuit allows you to pursue compensation beyond insurance policy limits. The at-fault party may be personally responsible for damages beyond this limit, although actually recovering the money can be challenging if they lack significant assets. 

Cost

There is no cost to submit an insurance claim, although you may have expenses related to the evidence you need to submit. A lawsuit, on the other hand, comes with court costs, including filing fees. 

If you hire a personal injury lawyer, you will likely have a contingency fee agreement. Your attorney’s fees will be paid as a percentage of your financial recovery. Many lawyers have a tiered fee structure, which means their fee increases if a lawsuit must be filed, and again if the case proceeds to trial. 

When Should You File a Personal Injury Lawsuit?

Your case will probably start with an insurance claim. However, if negotiations are unsuccessful, filing a lawsuit may be recommended. 

It may be necessary to file a lawsuit when:

• The insurance company denies your claim
• They offer a settlement far below what your case is worth
• Liability is disputed
• You suffered injuries that are very serious, catastrophic, or cause long-term effects
• Crucial evidence can only be obtained through the discovery process
• Your case is complex or involves multiple parties who may share liability

Sometimes a lawsuit is the only way to recover the compensation you deserve. 

Your attorney will help you decide if and when a lawsuit is necessary and explain the potential drawbacks. A lawsuit has the potential for higher compensation, but it comes with increased costs. It may also mean a longer wait for compensation, and it involves risk, as there is no guarantee a jury will award more than the insurance company has offered. 

How Long Do You Have to File a Personal Injury Case in Texas?

In Texas, you generally have two years to file a personal injury lawsuit. The clock usually starts on the date you are injured, but it may not begin until you discover (or should have discovered) your injury.

There are limited exceptions to this deadline. If a case involves an injured child, for example, they may have more time to pursue damages. In some cases, you may have less time to seek compensation, such as cases involving government entities. 

Contact McMinn Personal Injury Lawyers for a Free Consultation With an Experienced Austin Personal Injury Attorney

Recovering compensation after an accident can feel overwhelming, especially if you are unsure of what steps to take next. A personal injury lawyer can help you with every step of your case, from submitting a demand letter to the insurance company to arguing your case before a jury. 

If you have been injured and believe someone else is to blame, McMinn Personal Injury Lawyers is here to help. Contact our Austin personal injury lawyers today for a free consultation to discuss your case and explore your legal options.