By Daisy Rogozinsky
March 27, 2022

If you were in a motor vehicle accident, you may eventually come to a settlement with an insurance company to pay you damages. In this article, we define the term “settlement” and explain the settlement process in motor vehicle accident cases.

Key Takeaways

  • A settlement is an agreement between two parties that resolves a dispute without litigation. 
  • Most motor vehicle accident cases are settled outside of court.
  • It is recommended to have an attorney represent you to make the settlement process as fast and fair as possible. 

What Is a Settlement?

In law, a settlement is an agreement between two parties that resolves a dispute without requiring the case to go to court. In fact, this is a very common outcome for a lawsuit, with the majority of cases being settled outside of court. Settlements are beneficial because they speed up the legal process, helping to avoid ongoing legal fees. Most often, settlements are negotiated on behalf of either party by their legal representatives, although they must approve the settlement before it is officially agreed upon. 

Settlement in Motor Vehicle Accidents

If you are in a motor vehicle accident and seek compensation from your own insurance provider or the provider of the other party, you will most likely go through a process of settlement. This can involve negotiations both inside and outside of the legal system. While motor vehicle accident lawsuits can go to court, it is most common for them to be resolved outside of court in the form of a settlement. This is because a jury trial does not guarantee a favorable outcome.

The following is an outline of the process of reaching a settlement in your motor vehicle accident case.

  • Gather evidence. As soon as the crash happens, it is important to gather evidence that shows that you were not at fault and demonstrates the losses you suffered.
  • Send a demand letter. Following the accident, you or an attorney representing you should send a letter to the at-fault party’s insurance company explaining why the other party is responsible with details of the harm you suffered. This is the beginning of the settlement process.
  • Wait for the insurer’s investigation. The at-fault party’s insurance company will then assign an adjuster to investigate the claim. 
  • Receive a settlement offer. When the investigation is complete, the insurance company will either accept or deny your claim. If they accept your claim, they will offer a payout.
  • Negotiate. It is unlikely that the insurer’s first offer will be to your satisfaction. This usually kicks off a process of negotiation in which both sides make counteroffers until one side is satisfied.
  • Optionally, file a lawsuit. If you cannot come to an agreement independently, you can file a civil lawsuit and begin litigation.
  • Settle the lawsuit in or outside of court. Once a lawsuit is on file, it can either be settled outside of court or continue to a jury. Most often than not, motor vehicle accidents are settled outside of court. 

Note that it is advisable for you to be represented by an experienced motor vehicle accident attorney throughout this entire process so that it is as effective, quick, and fair as possible. 



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