Posted On December 19, 2013 Personal Injury
Throughout the process of handling your own personal injury claim, you’re likely to need a little help. You may run into words and phrases used in the legal system and the insurance industry that you don’t totally understand. You’ll likely come up against complicated concepts, like how Personal Injury Insurance (PIP) works. When you sit down to write a demand letter, you may realize that you don’t know how to format your letter, and how much easier the task would be if you had a template you could use as a guide.
Just as we’ve provided you with our favorite tips, tricks, and instructions to help you make the most of your claim, we want you to have easy access to all of the resources you need. Our annotated legal glossary explains the sometimes complicated terminology in ways that make sense, complete with any additional information you need to know when pursuing your claim. Our appendix is full of other resources to help you at a glance. A chart visually explains your responsibilities when it comes to personal injury protection (PIP) benefits. The demand letter template will guide you in both structuring and formatting your own demand for compensation. Our examples will break down for you various situations so you can make an educated decision whether to pursue a claim on your own or hire a lawyer.
Assumed risk, also called assumption of risk, occurs when a person knowingly and voluntarily proceeds, despite being aware of an obvious and known risk. For instance, say your injury was a slip-and-fall accident on a commercial property. If you slipped because of a safety hazard that presented you with no clear warning – for example, no nearby signs indicated a wet floor – then you could be eligible for compensation for any damages you sustain. On the other hand, if you got hurt while walking through an aisle of a store despite the presence of wet floor signs marking that specific area and visible slippery conditions, you assumed the risk of injury. The staff took reasonable measures to warn you of the hazard, but you ignored them. Assumed risk is important in determining liability and your ability to recover compensation, because a person who assumes the risk cannot seek money damages if he or she is injured.
Bad faith is a legal term used to describe a situation in which an individual or organization consciously and willfully misleads or deceives another. In terms of personal injury, bad faith typically refers to a breach of contract or “fiduciary duty,” which means a failure to adhere to the promises made in a contract. Typically, bad faith cases in personal injury claims occur in motor vehicle accident cases when a claimant’s damages exceed the policy limits of the at-fault party’s coverage and the claimant then turns to his or her own auto insurance company for coverage through an underinsured motorist claim. If you are in such a situation and your auto insurance company chooses to ignore or wrongfully deny your claim, it could be acting in bad faith. Unfortunately, you probably won’t be able to settle such a claim on your own. You may have to call a New Jersey insurance bad faith lawyer.
Claimant refers to the person who makes the claim against the insurance company – in this case, you. When you pursue compensation for your damages, you become the claimant. Should the case go to litigation, you would then be known as the plaintiff.
Comparative negligence is a legal concept that compares the plaintiff’s negligence to the defendant’s negligence, and reduces compensation accordingly. In New Jersey and Pennsylvania, you can still recover compensation from a party who is 51% or more at fault as long as your actions are less than 50% at fault for the accident, but your level of comparative negligence will influence your settlement. You may also hear the term contributory negligence, which refers to carelessness on the part of the plaintiff and failure to protect oneself against risk of harm.
Compensation is what you’re seeking when you pursue a personal injury claim — money that makes up for a loss, whether it’s for medical bills, property damage, loss of income, or other costs associated with an accident. Remember, compensation is a reimbursement for your economic and non-economic damages. That’s why, if you slip and fall but don’t actually get hurt or suffer any kind of property or income loss as a result, you have nothing to seek compensation for, and no case.
If at any point during the process you realize that you are no longer willing or able to handle your claim yourself and you decide to hire a lawyer to represent you, look for one that operates on a contingency fee agreement. This agreement means that your attorney would represent you for a percentage of the recovered amount, so you wouldn’t have any up-front fees to worry about.
The term “damages” refers to the losses suffered in an accident. Damages are the losses for which you are seeking compensation. However, you might also hear this term (or alternatively, the term “money damages”) to mean payment you recover for an injury or loss caused by the negligence of another.
The term defendant refers to the at-fault party, such as an individual who caused the automobile collision or the business that created a hazard on the premises on which you suffered a slip-and-fall. Your claim may involve more than one defendant, such as a business leasing a property and the property’s owner. You may also hear the term co-defendant, which refers to a defendant who is joined with another in the same case. While the defendant(s) caused the accident, you will seek compensation from the policyholder’s insurance company, not through them directly.
The demand letter is a written narrative that ties together all of the evidence you have collected relating to the other party’s liability and your damages and demands compensation from the at-fault party’s insurance company for those losses. Demand letters typically include sections regarding the claimant’s (your) information, a description of the basic facts of the accident, liability and theory of negligence on the part of the at-fault party, and a medical narrative detailing the consequence of the accident. Evidence must support all claims of liability and losses made in a demand letter.
The demand package is the full demand, including not only the demand letter which forms the centerpiece of the claimant’s (your) demand for compensation, but also numerous exhibits and evidence used to support your assertions of liability on the part of the at-fault party and the damages you are seeking compensation for. You will submit your demand package to the other party’s insurance company. Some demand packages fit inside an envelope, while others are so expansive that you may choose to ship them in a box.
Evidence refers to the proof of your claims about the accident, regarding both liability and damages. Proof in a personal injury claim may include photographs, medical records, police or incident reports, and witness testimony. In a personal injury claim, the “burden of proof,” or requirement that you prove your assertions, is on you, the claimant. However, in a personal injury claim you file against an insurance company, you don’t actually have to prove anything, at least not in the sense that most people outside the practice of law understand proof. In a criminal trial, prosecutors have to prove “beyond a shadow of a doubt” that a defendant is guilty and persuade jurors to reach a guilty verdict. In a personal injury claim that doesn’t proceed to trial, all you really need to do is provide a suitable amount of evidence that supports your assertion that the other party is at fault for your injuries.
A first party claim is a claim you make against your own insurance company based on a contract that you have with that carrier. In auto insurance, this will include medical benefits resulting from personal injury protection (PIP) coverage. If you purchased optional additional coverage, your first party claim may include coverage for other losses, including loss of income.
In Pennsylvania, the full tort option is a type of auto insurance that allows the insured to seek unrestricted money damages for injuries sustained in a car accident, including monetary losses and non-monetary losses, such as pain and suffering. This is in contrast to Pennsylvania’s limited tort option, but is similar to the no threshold option offered to policyholders in New Jersey.
You know that homeowner’s insurance protects homeowners from damage to and loss of a dwelling, but you may not realize that this type of insurance also covers personal liability issues that occur at the dwelling or by someone who lives at the dwelling. If your accident occurred at a private residence where you were legally permitted, you may seek compensation through the homeowner’s insurance policy. The good news is that this situation doesn’t put you in the position of directly seeking compensation from a friend or relative who owns the property, but instead from his or her insurance carrier.
Liability is the legal responsibility for one’s acts. In the case of personal injury law, it refers to a party’s legal responsibility for causing an accident or injury and the resulting damages. Some circumstances involve a doctrine called strict liability, which says defendants are liable for harm caused by their actions, regardless of intention or lack of negligence. Liability on the part of the policyholder is what you must prove to an insurance adjuster in order to receive compensation for your damages. Proving liability might require some research into building codes or traffic and property maintenance laws as well as evidence that the defendant failed to uphold his or her legal responsibilities with regards to these laws.
A lien is a legal claim against another’s property as a security for a debt. For the purposes of your claim, think of a lien as money that must come out of your settlement. A few of the most common types of liens you may encounter in a personal injury claim are health insurance liens (when a health insurance company seeks to be repaid for medical expenses related to your accident), child support liens (if you owe child support payments), and funding liens (if you had to borrow money during the course of pursuing your claim to make ends meet). Ideally, you will know of any liens before you agree to a settlement so that the amount of compensation you receive will cover all of your economic losses, including liens. However, not knowing about a lien doesn’t excuse you from having to pay once you find out.
In Pennsylvania, the limited tort option is a type of auto insurance that restricts the insured’s right to seek money damages for non-economic loss, such as pain and suffering. This is in contrast to Pennsylvania’s full tort option, but is similar to the verbal threshold option offered to policyholders in New Jersey. Auto insurance policies with limited tort selected are typically less expensive than those with the full tort option, but you may be unable to recover compensation unless your injuries surpass serious injury thresholds.
Like many goods and services in our economy, a personal injury claim does not have a fixed value. We use the term “market value” to describe how your claim fares in comparison to other cases on the market, or in the legal system. It encompasses the probable responses of an imaginary jury or judge, in the hypothetical situation that your case went to trial. Market value can vary widely based on factors such as jurisdiction, liability, the plaintiff’s likeability, and your history.
In an orderly society, all members have certain responsibilities. One is to act with what we call reasonable care, which means acting in a reasonable manner in order to avoid harming or injuring others. When individuals or entities engage in conduct which falls below the standard of care established by law to protect others, and which results in unreasonable exposure to harm, we call this negligence. In your personal injury claim, you probably won’t have to categorize the negligence of the other party – you will simply demonstrate how the party was negligent and how the behavior contributed to the accident. However, you should know that specific types of negligence exist. Negligence per se, means that a party has violated a statute or regulation. Gross negligence refers to serious carelessness, an indifference to others, or a blatant violation that shows a reckless disregard for one’s legal duty.
The term no-fault is confusing, because any accident for which you can seek compensation is someone’s fault – if it wasn’t, you would have no basis for a claim. No-fault laws such as those that exist in New Jersey and Pennsylvania simply mean that regardless of who is at fault for a motor vehicle accident, each party’s automobile insurance policy is required to pay for his or her own medical bills through coverage known as Personal Injury Protection, or PIP.
In New Jersey, the no threshold option is a type of auto insurance that allows the insured to seek unrestricted money damages for injuries sustained in a car accident, including monetary losses and non-monetary losses, such as pain and suffering. This is in contrast to New Jersey’s verbal threshold option but is similar to the full tort option offered to policyholders in Pennsylvania.
When you attempt to handle a personal injury claim on your own, you are seeking an out-of-court-settlement or an agreement reached between two sides without the intervention of a court, judge, or jury. To reach such a settlement, you will gather your evidence, submit it to the insurance company with it with a demand letter, and negotiate with an insurance adjuster. If you have to take your case to trial instead of settling out-of-court, it could cost you a lot of money, and you will probably need a lawyer.
Pain and suffering is a type of non-economic loss that refers to the impact of the accident on your life, including compensation for some important but very subjective things: your aggravation, humiliation, inconvenience, anxiety, sorrow, anxiety, and mental strain. Though you won’t (and can’t) itemize pain and suffering the way you will itemize economic damages in your demand for compensation, pain and suffering can increase overall claim value.
In handling your own personal injury claim, you may see the word “party” used to refer to yourself, the person or business at fault for the accident, or any person involved in the claim or a legal proceeding.
In its simplest form, a personal injury claim is a demand for money to compensate or make up for a loss suffered as a result of a physical injury caused by another person’s carelessness.
The phrase “preponderance of evidence” refers to the sum of your collected materials in your claim against the insurance company. It also refers to the amount of evidence needed for the plaintiff to win in a civil action.
After you both agree to a settlement amount, the insurance adjuster handling your claim will send you a release, an official form that you sign that indicates your acceptance of the settlement amount and waives your right to pursue further action against the defendant. Always read a release carefully before you sign it, and consider having a legal professional look over the document. All releases involve some waiver of rights, but some seek to strip you of rights that you shouldn’t have to give up.
Right-of-way refers to which driver in any situation involving automobiles or use of roadways has the primary right to use the roadway at a given time. Factors such as road features, traffic signals, and signs as well as the direction of travel determine right-of-way. Who has the right-of-way can play an important role in determining liability.
A settlement is an agreement between parties that disposes of a lawsuit. When you attempt to handle a personal injury claim on your own, you are seeking an out-of-court-settlement rather than going to trial. For more details, see out-of-court-settlement.
The statute of limitations, as it applies to civil claims, is a law that specifies how much time a plaintiff has to file a lawsuit. In New Jersey and Pennsylvania, the statute of limitations for most personal injury claims is two years from the date of the accident. Keep this important deadline in mind as you gather your evidence, submit your demand, and negotiate a settlement. If you wait too long and end up approaching the statute of limitations, you’ll have to file a lawsuit or end up with nothing.
As opposed to first-party benefits, like those available through the PIP portion of your auto insurance coverage, a third-party benefit refers bodily injury and property damage coverage available from the at-fault party’s auto insurance policy.
In civil law, tort is an injury or wrong committed to a person or property. Personal injury claims like yours will turn into tort lawsuits if they enter litigation.
Underinsured Motorist (UIM) coverage is an optional portion of coverage that you can purchase when you buy your auto insurance policy to provide coverage if you are injured in a collision caused by a driver with policy limits that are lower than the amount of damages you suffered in the accident.
Uninsured Motorist (UM) coverage is an optional portion of coverage that you can purchase when you buy your auto insurance policy to provide coverage if you are injured in a collision caused by a driver who has not purchased auto insurance (if there is no other insurance available).
In New Jersey, the verbal threshold is a type of auto insurance that restricts the insured’s right to seek money damages for non-economic loss, such as pain and suffering. This is in contrast to New Jersey’s no threshold option, but is similar to the limited tort option offered to policyholders in Pennsylvania. Auto insurance policies with a verbal threshold option are typically less expensive than those with the full tort option, but you may be unable to recover compensation unless your doctors believe your injuries have caused permanent physical damage.
Understanding PIP: The Basics |
|
| Your Responsibilities | The Auto Insurance Company’s Responsibilities |
| Deductible: minimum of $250 (can be as high as $2,500, depending on your policy) | None – The deductible is your responsibility to pay out-of-pocket.
Tip: If you have health insurance, you may have the option of listing them as a secondary insurer. Your health insurance policy may cover some or all of your deductible. |
| Copayments: You are responsible for paying 20 percent of the first $5,000 of medical bills, minus the cost of your deductible | The insurance company pays 80 percent of the first $5,000 of medical bills, and the remaining medical bills in their entirety up to the coverage limit you selected.
Tip: If you have health insurance, you may have the option of listing them as a secondary insurer. Your health insurance policy may cover some or all of your copayments. |
| Out-of-pocket maximum: If you chose the lowest deductible amount, the lowest* out-of-pocket maximum payment you will be required to make is $1,200. | None – The deductible and copayments that make up the out-of-pocket maximum are your responsibility. If your medical bills exceed your coverage limit, you may be responsible for those bills, too.
Tip: Check your policy for coverage limit information. In New Jersey, the default amount of PIP coverage is $250,000, and the minimum is $15,000. In Pennsylvania, your coverage limit could be as low as $5,000. |
| *Your out-of-pocket maximum varies depending on the deductible you selected when setting up your claim. If you chose a $2,500 deductible, you could get stuck paying up to $3,000 out-of-pocket.
Tip: Auto insurance policies are complicated. If you don’t understand your coverage, it may be worth paying a lawyer a one-time fee to review your policy and explain your coverage to you. |
|
Suppose an automobile accident with a person who has only the minimum $15,000 coverage amount leaves you with damages that the insurance company values at $9,000.
Because the policy limit in this specific claim is low, the lawyer could really only recover $15,000 for you, or approximately 1.6 times the amount you were already getting for yourself, rather than the theoretical 3.5 times the original settlement offer ($31,500). Then the lawyer would collect one-third of the settlement as payment (for simplicity’s sake, and because this was a lower-value claim, let’s ignore the potential cost of pursuing the claim in this example).
Settlement you received for yourself:
$9,000
– 0 (subtract fees – in this scenario, none exist)
$9,000 in your pocket
Settlement attained by a lawyer:
$15,000
– 5,000 (subtract attorney’s fees – 33 percent)
$10,000 in your pocket
In this scenario, having the help of an attorney doesn’t gain you much. At least some of that extra $1,000 will likely go toward case costs other than lawyer’s fees, so you will end up with about the same amount of money despite getting a larger settlement. If you’ve already negotiated the $9,000 settlement with the insurance company, you may not want to wait to get your money, which you will certainly have to do if you hire an attorney to negotiate a larger settlement for you.
In this case, you probably should take the $9,000 settlement you negotiated, and not hire an attorney.
Now imagine a similar situation occurring in Pennsylvania instead of New Jersey, where attorney’s fees may be up to 40 percent.
Settlement you received for yourself:
$9,000
– 0 (subtract fees – in this scenario, none exist)
$9,000 in your pocket
Settlement attained by a lawyer:
$15,000
– 6,000 (subtract attorney’s fees – 40 percent)
$9,000
This leaves you with the exact same amount either way, right? No exactly. Remember that there will still be some costs associated with your clam, and that in Pennsylvania, attorneys can take their payment before deducting those expenses. The final amount of money in your pocket will actually be less than $9,000.
In this case, you are actually better off proceeding on your own instead of hiring a lawyer.
Suppose you are involved in a somewhat more serious automobile accident with a person who has $100,000 in coverage. You have some severe injuries that required costly medical care, and you missed work for some time. The insurance company refuses to go higher than $20,000, even though the policy limits allow for far more compensation.
Depending on other factors regarding the claim, this could be a relatively high-value case. Perhaps the lawyer will succeed in getting a settlement as high as 3.5 times the one you originally negotiated, or $70,000.
Settlement you received for yourself:
$20,000
– 0 (subtract fees – in this scenario, none exist)
$20,000 in your pocket
Settlement attained by a lawyer:
$70,000
– 23,100 (subtract attorney’s fees – 33 percent)
$46,900 in your pocket
Of course, there will still be costs associated with pursuing this claim. Because it is a higher-value claim that will probably require more negotiation than one that results in a settlement worth only a few thousand dollars, those costs might be higher than in a low-value case. However, this is a situation in which you should clearly hire, or at least consult, an attorney. You could more than double the amount of compensation you receive, just by getting the help of a professional.
Now imagine a similar situation occurring in Pennsylvania instead of New Jersey, where attorney’s fees may be up to 40 percent.
Settlement you received for yourself:
$20,000
– 0 (subtract fees – in this scenario, none exist)
$20,000 in your pocket
Settlement attained by a lawyer:
$70,000
– 28,000 (subtract attorney’s fees – 40 percent)
$42,000 in your pocket
Remember that there will still be some costs associated with your clam, and that in Pennsylvania, attorneys can take their payment before deducting those expenses. However, though you are recovering less money in this scenario than in a similar scenario that occurs in New Jersey, the increase in the final amount of money in your pocket is still significant.
Keep in mind that market value is just as significant in a claim that a lawyer is handling as it is in a case you handle yourself. An accident in a city like Philadelphia is likely to result in a higher settlement than an identical case that originated in a less urban area. It’s also a plus that an attorney should have enough experience to know the market value and avoid settling for less money than you deserve.
