Are you suffering from an auto accident that wasn’t your fault? Are you considering whether it is worth getting a car accident lawyer? Do you want to know if the amount of money it will cost you to hire a lawyer to handle your case is worth it in the long run?
Now before you start this 7-minute read, let’s be clear about the question we are answering. We are examining the value of hiring a lawyer, not whether you should hire a lawyer. Some people may think they need to hire an attorney or law firm for a car accident no matter how minor the accident or how insignificant their injuries are with no concern for the costs associated.
We are going to answer whether it makes financial sense to hire a lawyer after a car accident and explain our conclusion.
Why Should You Believe Me: I’m a Car Accident Lawyer
Our firm has over 120 years of combined experience, so we handle hundreds of car accident claims each year. We also don’t let potential clients hire us if we think it would NOT be worth it for them (and for us as well).
Worth Hiring vs. Whether to Hire No Matter What?
There is also the question of: Should I Hire a Lawyer for A Car Accident? That is an entirely different question but has some similarities to the initial question. If you want zero stress through the car accident claim process, then yes, hire a lawyer.
An experienced lawyer who has handled thousands of car accident claims knows the tricks and pitfalls to avoid throughout the process.
You probably wouldn’t hire a doctor just out of medical school for your surgery because they don’t have enough experience in the operating room. Now, that doesn’t mean you can’t have a successful insurance claim after a car accident with a new lawyer. But experience does matter and the insurance companies know this when evaluating your claim and what they are exposed to in the long run in terms of paying out for a claim.
Insurance companies know law firms and the lawyers that work for them. They keep data on how many times they have lost to a lawyer in trial. Knowing that the lawyer handling a claim will take the case to trial does affect their decision to settle claims.
Every lawyer was new at some point, they were fresh out of law school, and still learning the trade. But, if you are going to hire a lawyer for your car accident claim, you should hire someone that has experience handling the process from beginning to end.
And when we say end, we mean, all the way to the end, which is a trial. You want a lawyer that can go the distance when it comes to holding the insurance company’s feet to the fire.
That is one of the most important reasons you hire a lawyer for your accident claim. Insurance companies know that people who are not represented usually don’t have the training, knowledge, and experience to take their case to trial and ultimately force the insurance company to pay what is right and fair in their case.
As soon as a lawyer is hired in an accident case, the lawyer will send a Letter of Representation to the insurance companies. Insurance companies put this information into their system and they will value the claim differently since they know the claimant (that’s you) has a lawyer protecting their interests.
If you hire a lawyer, generally all you have to worry about is getting healthy after the accident. In other words, receiving the medical treatment and care to return your body and sometimes mind/mental state to the condition it was before the accident.
But what you are really wondering is, does it make financial sense to hire a lawyer. There are pros and cons financially to hiring a lawyer for your car accident and in this article, we are going to cover all of the options.
Are Accident Lawyers Worth It?
There is no doubt that a car accident lawyer is worth it if you want to have zero stress and you don’t want to have to worry about all of the steps it takes to get a claim resolved and maximize the recovery in your case.
Let’s look at some numbers to better understand whether it is worth (in the sense of money) hiring a car accident lawyer.
Car accident claims are like snowflakes, no two are the same. You cannot look at your friend’s car accident claim and compare it to yours. There are hundreds of factors that are used to calculate the value of a claim, so don’t try and compare.
We hear so many times from clients that, “my cousin got a million dollars for his car accident” or “my friend got $50,000 for his accident injuries.” While that may be the case, some people are going to inflate or fib as to how much they got.
Also, they may have had more serious injuries or maybe they treated for longer, or maybe the person that hit them was a drunk driver and their case was decided by a jury that was so appalled by the accident that they gave your cousin or friend a big number just out of spite.
That can happen in your case, but don’t rely on what other people got as a comparison or bar for your recovery.
Back to the numbers. As we will discuss throughout this article, most lawyers who handle car accident claims charge a contingency fee. That means the lawyer’s fee is contingent on the outcome in your case.
You will not have to pay the lawyer out of pocket at the beginning of the case nor will you have to pay as the case goes along. However, the lawyer will be paid some percentage of the final recovery in your case.
Law firms and private lawyers that regularly handle auto accident claims will charge either 33% or 40% for a car accident fee. If the case settles, the fee will be 33% of the recovery (how much the insurance company paid) or 40% if a lawsuit is filed in your case.
Therefore, if the recovery is $100,000 and your lawyer is able to obtain this result during negotiations with the insurance company, the lawyer will deduct 33% or $33,333.33 as their legal fee. and if the case goes to trial and a judge/jury awards this verdict, then the lawyer will be paid $40,000.00.
You have to also remember that there may be legal costs associated with your case. Expert fees, administrative fees, medical record, and billing costs to recover, copy fees, postage, and mailing costs. These will also be deducted from the recovery when the case concludes.
Generally speaking, the longer your case goes on, the more treatment you receive and if your case requires a lawsuit, the higher the legal fees will be. Legal fees are different than legal costs. the legal fee is what the lawyer charges for his/her services, legal costs are fronted or paid by the lawyer or a law firm and are reimbursed by the money recovered.
The fact that you don’t have to pay the legal costs and legal fees upfront is what makes personal injury claims unique and it also makes it easier for the client to pursue a claim.
If lawyers charged an hourly rate of a flat fee structure for personal injury and car accident claims, then the client would have to fork over thousands of dollars at the onset and this is usually when the client is already down financially.
For example, you may have just lost your car as it was totaled in the accident, or your car is in the shop for a week to be repaired. Or you have to take off work to recover from your injuries and you don’t have an income right after the accident.
This would be the worst time to have a huge expense in hiring a lawyer to handle your case. and the contingency fee is like getting a lawyer for no money out of your pocket and then paying the fee at the end, and only if you win.
Remember, if you don’t win and you receive nothing in your case, you won’t owe the legal fee or have to repay the legal costs for your case, this is a huge benefit to the victim of a car accident.
So, is it worth it to pay a lawyer $33,333.33 or $40,000.00 for your case? Maybe, and the problem is, you won’t know if it is worth paying the lawyer until it may be too late.
When is it Not Worth Hiring a Lawyer for Your Car Accident Case?
You Have More Time and Knowledge Than a Lawyer
If you have endless time, knowledge of the legal system, insurance laws, and how to get insurance companies to pay fair and reasonable settlements or present a case to a judge or jury, then it is not worth hiring a car accident lawyer for your claim. This excludes almost everyone unless you went to law school and have been handling insurance claims for years.
You Have Money to Waste
If you have thousands of dollars in your bank account that you are willing to risk on your car accident claim without knowing how the process works and taking chances on making the right decision, then it is not worth hiring a lawyer for a car accident case.
Adequate and Fair Compensation is Not a Priority to You
You have principles, you don’t like lawyers, you don’t want help from anyone, you like to “do it yourself” and you don’t care how much you receive, you just want to do it yourself and let the chips fall where they may. If that is you, then you don’t need a lawyer and it will never be worth it to you.
You Can Get Lucky
“Even a blind squirrel finds a nut once in a while.” Yes, you can get lucky and get an adjuster at the insurance company asleep at the switch for a second and offer you a settlement offer higher than you would expect, but this may happen once a year, and insurance companies process hundreds of thousands of claims a year, so don’t bet on this happening.
You’re a Gambler and You’re Lady Luck
Do you feel lucky, are you a gambler? Then don’t hire a lawyer, take your chances and maybe you’ll get lucky and the insurance company will send you a huge check and not look at any of the facts of your case. This will never happen, but you can always take a chance.
You Just Don’t Care
We have seen people that just don’t care, they don’t want to hire anyone, they don’t want to do anything after an accident and they throw up their hands and just say, “Whatever.” If you are of this mindset, then no, you do not need to hire a lawyer and there is no worth that lawyer will bring to you that can justify you picking up the phone or sending an email to hire an attorney.
Is it Worth Getting a Lawyer for a Minor Car Accident?
This is a tough one and you may not actually need a lawyer for a minor car accident. and it’s not the severity of the accident that dictates the need for a lawyer but the damages you suffer and the recovery you’re seeking from the accident.
Again, we’re only talking about bodily injury, not property damage. Property damage is a separate issue and if you keep reading, we talk about if you should hire a lawyer for a property damage claim and whether it is worth it.
Is it Worth Getting a Lawyer for a Car Accident with No Injuries?
Generally speaking; No. If you were not injured in the car accident, then you won’t need to hire a lawyer since there will not be a bodily injury claim. You may be asking, what about my car, who’s going to fix or replace my car, and what if they don’t offer me enough to replace or repair the vehicle? You can then hire a lawyer for the car repairs, but this may not make financial sense.
Why You Should Not Hire a Lawyer for a Property Damage Only Claim
The short answer is: it is going to cost you more in legal fees than the value you may recover for the lost or damaged vehicle. Lawyers that handle property damage claims work on an hourly basis. Most lawyers will not handle a property damage claim on a contingency basis since the recovery can be too small to realize a profit for the lawyer.
Let’s look at an example. Most lawyers that charge a contingency fee will receive a payment of 33% of the total amount recovered. So, let’s say that the insurance company is offering you $25,000 to replace your vehicle. Yet you think that you should receive $27,000 for your care, the net profit is $2,000.
Now, the contingency fee lawyer is either going to charge you 33% of $27,000 if he is able to get the court to award that much money to you, which is $8,910. That means you are going to pay $8,910 to get $2,000 more dollars on a claim.
Before you hired the lawyer you were going to get $25,000 for your vehicle, and now with the lawyer and their contingency fee, you will only receive $18,090. Therefore, you got less money in your pocket after hiring a lawyer.
This does not make financial sense for you and most lawyers that have any ethics would not allow you to do this. the only reason this makes sense is that you wanted to prove a point to the insurance company, but you ended up losing money in the end.
The other option is if the lawyer will charge you an hourly rate to take your case and try to get you the $27,000 for your vehicle. You would need to hire a contract lawyer, but a personal injury lawyer could handle this for you as well.
Let’s say the lawyer charges $250.00 an hour to represent you to recover the extra money for your totaled car. Let’s use the same numbers from above. (Reminder: the insurance company has offered $25,000 to replace your totaled vehicle, but you think it’s worth $27,000 based on what you have found online).
So you hire the lawyer and he does 10 hours of legal work in the preparation and trial of your case. That means you will pay the lawyer $2,500 in legal fee and only get $2,000 more from the insurance company, you have now lost $500. Again, not a smart move.
One other thing to consider is if you go to trial, the judge or jury, depending on your jurisdiction and the limits of which court has jurisdiction, may award you less than what the insurance initially offered you. For example, let’s say the insurance company is willing to pay $25,000 for your vehicle. You go to trial and the judge/jury thinks that your car is worthless or pays your $5,000. Again, you are losing money, and thus this is not a good financial decision.
Settlement Sheet: Breakdown
At the end of any successful personal injury and car accident case, the lawyer will provide a settlement sheet that breaks down the money in and the money out, here is an example:
Medial Expenses (bills that must be paid back):
Emergency Room Doctors: -$1,200.00
Doctor #1: -$12,500.00 (reduction negotiated by your lawyer from $20,000.00)
Physical Therapy: -$5,000.00
Total Medical Expenses: $44,890 (the total of all medical care above)
Money left after the medical expenses are paid: $155,100.00
Legal Fee (33%): $66,660.00
Legal Costs (records, admin., etc.): $725.00
Money Left After Legal Fee and Costs: $87,690.00
Total money paid to Client for their case: $87,690.00
Therefore, in this example, the client would have all of their medical expenses repaid, their lawyer paid, and receive a check for $87,690.00 for their accident.
Now that you have all of this valuable information, you have a decision to make. and you don’t have to make it alone. Speak with a car accident lawyer, most offer a free consultation. Get a feel for how they interact with you and learn what the costs and benefits are for your case.