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Negotiation: Once you have completed treatment, and your lawyer has all your medical records and bills, your attorney will usually forward that on to the insurance company's adjuster. Most of the time, he, or she, will also make a "demand" which is an initial offer to settle for a certain amount. The insurance company adjuster will review the records, bills, and any information that they have gathered in their own investigation. If you are lucky, your case will settle at this point.

The negotiation process often resembles trading a flea market. Your lawyer might start making demands higher than insurance company will ever pay, and the insurance company's adjuster will make offers lower than they are willing to pay. The critical thing is determining what your case is worth, and there are several factors that determine value.

Valuation of your case: there are two basic concepts that determine the value—Liability and Damages.

Liability is the likelihood that a judge and jury will hold the defendant responsible under the law for injuries you have. Liability can be very complicated and turns strictly on the facts of a case, but in most instances the law that determines liability is negligence. Negligence is the failure to use ordinary care. Although there are several exceptions, a person or company will likely be liable if their failure to use ordinary care actually caused your injury.

Damages are the likely amount of money that a judge or jury would find you are to receive as compensation. Although there may be other factors, such as punitive damages, most of the time damages are determined by the four basic elements: (1) lost wages, (2) medical bills, (3) impairment, and (4) physical pain and mental anguish.

Role of insurance: You may be wondering why are we talking about the liability of company or person when there is an insurance policy. There is a very common misperception that an insurance policy will pay damages regardless of the facts. Although there are some types of policies out there that do, the vast majority of cases involve liability insurance. Liability insurance is not insurance that covers the injured person. It is insurance that covers the negligent person or company for claims brought against them. For example, if you are rear-ended by another driver, in most states, you will have to bring a suit or claim against that driver. Car insurance normally includes liability insurance, so his insurance will pay you if it believes he is responsible for causing the wreck. (Note there are some states that have "no-fault" insurance which pays regardless of fault, but in those states its your policy paying you, not the person that caused the wreck. There are 12 no-fault states).

Problems preventing settlement: the most common problems preventing settlement are disputed liability, disputed injury, or disputed damages (when the extent of the injury is disputed).

Disputed liability: when the insurance company says they are denying liability, they are claiming that the insured (the person or company who you claim caused the accident) is not legally responsible. They may be claiming that you caused the wreck. For example, in a rear-end collision case, they may be saying that even though you were rear-ended it was not the insured’s fault because you pulled in front of him and caused the wreck.

Disputed injury: Most disputes in cases revolve around injury. The insurance company or defendant may be more than willing to admit that they caused an accident, but not that they hurt you. And even more often, they deny they hurt you very badly.

Prior Injuries: It is very important if you want to protect the value of your case to let your lawyer know if you have had any prior claims or injuries. During the entire process, tell no lies, especially about this. In today’s world, much information is kept about you that you don't know about. Prior cases can be found in public records, and if you have had a prior claim, an insurance company is likely to still have records about it to share with the insurance company you are now claiming against. If you forget about a prior claim, or lie about it, it will likely be brought up to embarrass you. It will be used against you. Thus, you hide prior claims and injuries at your peril. If an insurance company has information about other claims, they may likely be unwilling or reluctant to pay your claim. They may believe the injuries you are now claiming are the same injuries you have claimed in the past.

Insufficient Information: Another major problem when trying to settle is missing or insufficient information. Many times there may be questions raised that can't be answered without a suit. Court cases give both sides the right to issue subpoenas that can compel people to testify and turn over documents. Before a case is filed, people can only make requests, and they have little authority to force anyone to cooperate. For example, many cases involving intersection collisions turn on disputes as to who had a green light. Witnesses may not be willing to give a statement as to who had green or red light. And even if they are, without examination by both sides, it may be impossible to decipher each side’s story. Thus, many times a case has to be filed before either side is ready to settle.

Have realistic expectations: another big reason cases do not settle promptly is one side does not have a realistic grasp of what their case is worth. To avoid this, ask your lawyer what your case is worth. If you don't trust him, you might go and see another lawyer who is experienced in personal injury claims and agree to pay them for their time (a half hour consultation would be appropriate). Most will tell you honestly if your current lawyer is adequately representing you. (Be leery of someone who just wants to take over the case, you could end up owing two separate lawyer fees).

Settlement or Lawsuit: If you cannot get a decent offer to settle, you will have to file suit. Before suit is filed, you need to be aware that in most cases, additional expenses will decrease the amount you get. Thus, if your lawyer is advising you to take an offer, and you want to file suit, you may be reducing your net recovery. Thus, even if an offer goes up after suit, you may receive less. So, be realistic and make sure you have a lawyer you can trust.