One of the questions we hear most often related to personal injury claims—after "How Long Does It Take to Settle a Personal Injury Claim or Case?"— is “How much will a personal injury claim cost me?”
There is often confusion around the costs associated with personal injury claims, and understandably so, so let's try to clear things up!
When we’re talking about personal injury claims, we typically mean that you—the claimant—have been injured through no fault of your own by the negligent actions of another person or party. When you start a claim against the responsible party, we call them the defendant.
That said, sometimes you won't even be required to go after the defendant because you may have an insurance policy that will cover some of your damages. For example, the standard automobile policy in Alberta covers the insured for Accident Benefits and may also include coverage for physical damage to your vehicle.
However, you may not have insurance that directly compensates you for any damages beyond what Accident Benefits cover. Therefore, you would need to seek compensation from the responsible party (the defendant).
If the defendant has an insurance policy, it will be the obligation of that insurer to check the validity of your claim and negotiate a settlement with you, the claimant. In turn, you will need to justify the details of your claim.
Ideally, a claim will cost you nothing to settle.
However, if the negotiation process breaks down, it may be advisable to engage the help of a personal injury attorney.
In some cases, a dispute arises between what you (the claimant) and the defending party's insurance company believe is owed or covered by the policy. These disputes can arise over anything from what the policy language says is covered, to how much treatment costs, to disputes around how much income you make at your job on an annual basis.
The defendant's insurer performs many calculations in their evaluation of your claim. And these calculations depend heavily on the information provided to the insurer by you about your injuries (i.e. what can you prove about your injuries.)
These disagreements can break down the negotiation process, and often lead to abandoned claims.
Fortunately, there are several options available to protect your rights as a claimant and to escalate the claim if you feel the insurer is not likely to settle your claim. These options include Alternative Dispute Resolutions (ADR), like arbitration and mediation, OR litigating the claim (taking the defendant and their insurance company to court).
Regardless of whether you negotiate the claim directly with the insurer, engage in ADR, or seek a judgement in court, you always have the choice of hiring a personal injury attorney, or self-representing your claim.
Either way, the actual costs to you as the claimant come when the process of negotiating with the insurer breakdown. These costs include:
Note that you may have to pay for certain costs upfront and out-of-pocket, to be repaid when you settle with the defendant.
You always have the choice to keep a lawyer to help you negotiate and settle your claim. It’s important to understand the costs that are associated with engaging a lawyer, to make sure you are making an informed decision.
Many personal injury attorneys will take on cases on a contingency fee. That means that they don’t get paid unless you get paid, although you may still be required to pay for any incurred fees required to prove the validity of your claim, like expert reports, medical reports, or court costs.
Depending on whether you end up settling directly with the insurance company, the contingency fee that your lawyer charges is commonly as high as 30-40%, though it could be higher.
Before deciding to hire a lawyer, you should consider if this fee is reasonable for your specific case, as well as what other options might be available to you. Engaging a professional to handle your case could prolong the process of negotiating with the insurer, or could lead to escalation by the insurer, adding further delays.
Our personal injury assessment tool can help you get an understanding of the possible award you might get if the case when to court. It can also suggest the net settlement you may receive once legal fees and other costs are paid out. Try our personal injury settlement calculator, for free, here.
One last thing to consider is that many lawyers will only take cases worth a certain amount to make it "worth their time"—generally over $30,000.
This means that, for smaller cases, you may not be able to find a lawyer who will take your case. These smaller cases are where self-representation, with the help of PainWorth’s settlement negotiation tools, is particularly appealing.
The reason that some lawyers choose to decline smaller cases is because they feel that the amount of work they would need to do outweighs the money they expect to earn.
In some cases, you may also not be able to find a lawyer to help you simply because there might not be a personal injury attorney geographically close enough to you to take your case. Self-representing using PainWorth can become useful in those situations as well.
Try PainWorth for free today and find out what you may be entitled to in your personal injury claim settlement.