Do You Always Get a Settlement From a Car Accident?

Last year, Michigan saw its largest increase in traffic fatalities since 2007. While 985 people were killed in car and other motor vehicle accidents in 2019, this number spiked to 1,083 in 2020. This shocking number of fatalities came at a time when the overall number of crashes decreased from 314,377 in 2019 to 245,432 in 2020 and crash-related injuries decreased from 74,963 to 60,986.

Despite the decrease in injuries, however, when you are the injured person, statistics don’t mean much. Instead, your only concerns are recovering from your injuries to the greatest extent possible and obtaining the compensation necessary to pay your medical bills and lost wages. Does this mean you’ll always get a settlement, though? 

Settlement Versus Jury Trial

Nationwide, an estimated 96% of personal injury cases end in settlement, with the remaining 4% ending in a jury verdict. These percentages hold true even when the injured person hires an attorney and files a lawsuit against the negligent party responsible for the accident. Keep in mind that a settlement amount can be agreed upon at any time, even after the case goes to the jury.

Michigan’s No-Fault Law

As you may already know, Michigan is a no-fault state, meaning that, under most circumstances, you must purchase the following types of coverage as part of your personal auto insurance policy:

• Personal injury protection, also known as PIP
• Property protection, also known as PPI
• Residual bodily injury and property damage liability, also known as BI/PD

PIP Coverage

Under the new no-fault provisions signed into law by Michigan Governor Gretchen Whitmer in 2019, you can choose one of the following PIP options:

• Unlimited coverage
• $500,000 per person per accident
• $250,000 per person per accident

In certain limited circumstances, you can choose to carry a lesser amount of PIP protection. This may not be a wise decision, however, given that you must look to your own insurance company first when you sustain injuries in a car crash. Your PIP coverage limits determine the maximum compensation you can receive from your own insurance company for medical expenses and loss of wages associated with your accident.

Michigan’s Statutes of Limitation

You must file your claim with your own insurance company within one year of your accident date. If your medical expenses and loss of wages exceed your PIP policy limits, you then have two additional years in which to sue the negligent driver for the following:

• Amount in excess of your own coverage
• Pain and suffering
• Future medical costs and loss of income

Lawsuit Criteria

If you file a lawsuit, you will need to be able to prove two things: that the defendant was negligent and that you suffered a “serious impairment of body function.”

In general, proving negligence requires proof of the following:

• That the defendant owed you a duty of care
• That he, she or it breached this duty
• That as a result of the breach, you suffered injury
• That the defendant’s acts or failure to act were the proximate cause of your injury
• That your injuries resulted in damages for which the defendant must compensate you

Proving “serious impairment of body function.” can be a bit trickier. Section 500.3135 of the Michigan Insurance Code defines this term as follows:

• Your injury must be objectively manifested, that is, observable or perceivable by someone else based on your actual symptoms or condition.
• It must impair at least one of your important body functions.
• The impairment must temporarily or permanently affect your general ability to lead the normal life you led prior to your accident.

Settlement Process

The settlement process consists of your lawyer and the lawyer representing the other insurance company negotiating to arrive at a mutually acceptable settlement amount. Usually this potentially complicated process takes six months or longer due to various factors coming into play.

Existing Factors

Existing factors are the first area of concern:

• What type of injuries did you sustain?
• How extensive and serious are they?
• How long of a hospital stay did they require?
• What, if any, follow-up physical or occupational therapy have you had to undergo?
• How long have you already been off work?

Future Factors

Future factors then become important:

• Will your injuries leave you partially or totally disabled?
• Will they leave you with permanent scars?
• Will they require you to use an assistive device, such as wheelchair or walking aid, to get around for the remainder of your life?
• Will they require you to receive in-home care for a substantial period of time?
• Will they result in the loss of your ability to fully participate in the sports and other activities you enjoyed prior to your accident?
• Will they cause you to lose your overall enjoyment of life?

Initial Settlement Offer

Given all of the above, it’s important to remember that insurance companies don’t want to pay you any more than they have to. Consequently, if you settle too quickly, the amount you settle for will, in all likelihood, be far less than the amount you could have received had you been more patient.

For instance, a representative of your insurance company may call you while you’re still in the hospital. The sooner any insurance company can get you to accept a settlement amount and release it from further liability, the better its financial bottom line. Accepting the initial settlement offer, however, is definitely not in your best interests. For one thing, it may be too soon for you to know the full extent of your injuries or what, if any, long-lasting consequences they will have.

Therefore, if you receive such a call, your best interests dictate that you do the following:

• Decline any settlement offer.
• Refuse to make a recorded statement.
• Refuse to sign a release.
• Refer the caller to your lawyer, if you already have one.
• If you have not yet consulted a car accident lawyer, tell the caller you intend to do so in the near future, take his or her contact information, and inform him or her that, once hired, your lawyer will contact him or her.

Comparative Negligence

Another thing to keep in mind is that, in addition to being a no-fault state, Michigan is also a comparative negligence state. This means that if it’s determined that your own negligence was partially to blame for your accident, Section 600.2959 of the Michigan Code provides that any settlement amount or jury award for your economic damages, e.g., medical expenses and loss of income, must be reduced in proportion to the amount of fault you bear. As for your noneconomic damages, e.g., pain and suffering, if it’s determined that you bear 50% or greater fault for your accident, Section 600.2959 bars you from any recovery.

The Legal Help You Need and Deserve

Whether claiming against your own insurance company or that of the negligent driver who caused your accident, your wisest course of action consists of hiring the Mike Morse Law Firm. Our team of experienced and dedicated lawyers has been representing car accident victims since 1995. Today, we’re the largest personal injury law firm in Michigan, with over 150 employees, both attorneys and support staff. We have collected over $1.5 billion for our injured clients over the years. We stand ready, willing and able to give you superior legal representation and aggressively pursue the maximum amount of compensation for you available under the law.