Should you file a personal injury lawsuit or compensation claim?

After a car accident, you may wonder if you should file a compensation claim with the at-fault party’s insurance company or go for a lawsuit. For a person not familiar with the legal terminology, compensation claim and lawsuit may mean the same thing. However, compensation claims and lawsuits are two different methods used by personal injury lawyer near me to resolve personal injury cases. If you have been injured in an accident or bitten by your neighbor’s dog, you must be contemplating what course of action to take.

Although personal injury lawsuits and compensation claims are methods of settling personal injury cases and ensuring the plaintiff gets a fair settlement for their damages, both are different entities.

In this blog, we have cleared the distinction between a personal injury lawsuit and a compensation claim to help you make an informed choice.

What is Personal Injury Claim?

A PI compensation claim is a formal request made by the plaintiff (the person who has sustained injures in an accident caused by someone else) to the at-fault-driver insurance company for compensation. The compensation claim process doesn’t involve the judiciary system. Both the parties settle the case through negotiation.

What is Personal Injury Lawsuit?

A PI lawsuit is a process of filing a civil suit against the defendant (the at-fault-party) in court. While the case is still open in the court, both parties’ lawyers can negotiate to settle the case outside the courthouse. If no settlement is reached through negotiation, the court will resolve the case.

People often have a hard time deciding which approach to take. Various factors should be kept in mind when picking the right option for your personal injury case. For instance, if you have sustained severe injuries or incurred considerable damage, you should file a lawsuit. Most people attempt to recover the damages through a compensation claim. If they are unable to secure a favorable settlement, they turn to the court.

The process of negotiating a Personal Injury Claim

The negotiation process of a personal injury claim can be complex. If you have been in an accident of any sort, you should immediately look for a top personal injury lawyer. It’s essential that you file a compensation claim with the at-fault driver’s insurance company within 24 to 48 hours of the accident. Once you have filed a compensation claim, you will receive the “Reservation of Rights” letter from the insurance adjuster acknowledging your claim. Once you have accepted the ROR, you are required to send a demand letter to the insurance carrier. In the demand letter, you should mention the accident’s details, like how and when it happened, the injuries you have sustained, and the damages you have incurred. Also, attach evidence to support your claim.

After receiving the demand letter, the insurance company will start the investigation. The initial process of case assessment is done to limit the settlement amount. After the investigation, the insurance company will reach out to you with a settlement amount, which is usually lower than what you would have calculated. You can accept the settlement offer, reject it or make a counteroffer.

Filing a Personal Injury Lawsuit

This may be a wise choice if you have suffered a very serious injury and will need a high amount of compensation. You will want to consider filing such a lawsuit if you suffered a:

Head injury

Brain injury

Spinal cord injury

Eye injury


Burn injury

Catastrophic injury

A loved one suffered a wrongful death

Remember, the costs associated with these injuries are astronomical. Filing a lawsuit is usually the only way to recover the necessary compensation.