If you were in an accident that wasn’t your fault, your job over the next few days is to lock down the evidence, get examined by a doctor, and open a claim against the other driver’s insurer before you say anything that can be used to shrink your payout. Fault being obvious to you is not the same as fault being established on paper, and insurers look for any gap in your documentation or treatment to reduce what they owe.
What To Do Before You Leave the Scene
Check yourself and your passengers first. If anyone is hurt, or you aren’t sure, call 911. Move vehicles out of traffic only if it’s safe; otherwise, turn on your hazards and get to the shoulder.
Call the police even if the crash looks minor. The report creates an independent record of what happened and what the officer observed, and most insurers treat the absence of one as a red flag. Most states also legally require you to report any accident involving injuries or property damage above a fairly low dollar threshold.
While you wait, exchange information with the other driver: full name, phone number, driver’s license number, license plate, insurance company, and policy number. Then photograph everything. Damage to every vehicle, skid marks, traffic signals, road conditions, debris, and where the cars came to rest before anything moves. Wide shots and close-ups. If anyone saw it happen, get their name and number before they drive off.
Do not discuss fault, apologize, or speculate about what happened. A reflexive “I’m sorry” or “I didn’t even see you” can be reframed later as an admission. Stick to facts with the other driver and with the officer.
See a Doctor Within a Day or Two
Get examined even if you feel fine. Adrenaline masks pain, and whiplash, concussions, and soft-tissue injuries often don’t surface for hours or days. A prompt medical visit creates a clean record linking your injuries to the crash. Wait weeks and the other side’s insurer will argue your pain came from something else.
Then follow the treatment plan. Every appointment, every session of physical therapy, every prescription. Gaps in treatment are the adjuster’s favorite argument: if you were really hurt, you wouldn’t have skipped three weeks of PT. Keep copies of all bills, imaging results, and prescriptions. Those documents are the backbone of your claim.
Opening a Claim Against the Other Driver’s Insurance
In most states, you file against the at-fault driver’s liability insurance. Contact their insurer, give them basic information about the accident, and tell them you intend to seek compensation. Notify your own insurer too, because most policies require prompt reporting regardless of who caused the crash.
Proving the other driver was at fault means proving negligence: that they owed you a duty of care, breached it, and that breach caused your injuries. A driver who runs a red light and hits you in the intersection clearly breached the duty every driver has to obey traffic signals. Police reports, witness statements, dashcam or surveillance footage, scene photos, and cell phone records all help establish what happened. Under federal evidence rules, a police report qualifies as a public record, but courts generally admit only the officer’s firsthand observations, not the officer’s opinion about who was at fault.1Cornell Law Institute. Federal Rules of Evidence Rule 803 – Exceptions to the Rule Against Hearsay
Fault is not all-or-nothing in most states. The vast majority follow some version of comparative negligence, where your recovery is reduced by your share of responsibility. If you’re found 20 percent at fault and your damages total $100,000, you recover $80,000. Most of these states cut off recovery once your fault reaches 50 or 51 percent. A handful still follow contributory negligence, which bars you from recovering anything if you carry even one percent of the blame. Which system your state uses shapes how hard the other side will try to pin some fault on you.
If You Live in a No-Fault State
About a dozen states have no-fault auto insurance. There, you file first with your own insurer’s personal injury protection coverage regardless of who caused the crash. PIP typically covers medical expenses and a portion of lost wages up to your policy limit. You can only step outside the no-fault system and sue the at-fault driver if your injuries exceed a severity or cost threshold set by state law. Missing the PIP filing deadline can cost you coverage, so check your policy right after the accident.
If the Other Driver Has No Insurance
Roughly one in seven drivers carries no insurance at all. If the person who hit you is uninsured or underinsured, your own uninsured/underinsured motorist coverage becomes your primary source of compensation. It’s optional in many states. Without it, you’d be left suing the at-fault driver personally, and collecting a judgment from someone who couldn’t afford insurance in the first place is often difficult.
How To Handle the Adjuster
The at-fault driver’s insurer will assign an adjuster to investigate. That adjuster’s job is to minimize the payout, and one of the first moves is usually a request for a recorded statement. You are under no legal obligation to give one to the other driver’s insurer. Anything you say can be used to reduce your claim. A polite “I’m feeling okay” gets pulled out of context weeks later as proof your injuries are minor. Memory lapses about small details get reframed as inconsistencies. If an adjuster calls, it’s reasonable to say you’ll respond through your attorney.
Early settlement offers are the other common tactic. An insurer may call within days of the crash with a quick payout that sounds generous before you understand the full extent of your injuries. Once you accept and sign a release, you generally cannot go back for more, even if your medical bills end up far exceeding what you took.
What Your Claim Is Actually Worth
Damages fall into three categories, and understanding the difference matters for both building your case and knowing what to expect at tax time.
Economic Damages
Economic damages cover every financial loss you can put a dollar figure on. Medical bills are usually the largest piece: emergency room visits, surgeries, hospital stays, physical therapy, prescriptions, and any future treatment your doctors say you’ll need. Lost wages account for income you missed while recovering, and if your injuries permanently reduce your ability to work, you can claim loss of earning capacity on top of that. Property damage covers repair or replacement of your vehicle and belongings.
Documentation drives these numbers. Save every bill, pharmacy receipt, pay stub, repair estimate, and rental invoice. The more precisely you can quantify each loss, the harder it is for the other side to argue it down.
Non-Economic Damages
Non-economic damages compensate for losses without receipts. Pain and suffering covers the physical discomfort and emotional toll. Emotional distress addresses anxiety, depression, and insomnia. Loss of enjoyment of life applies when injuries stop you from doing things you used to do.
Because there’s no invoice for suffering, these are harder to calculate. Attorneys and insurers commonly use one of two methods: a multiplier (your economic damages times a factor, usually between 1.5 and 5, based on severity) or a per diem approach (a daily dollar amount for every day you lived with the injury). Severity, length of recovery, and the quality of your medical documentation all push these numbers up or down.
Punitive Damages
Punitive damages are rare and reserved for conduct that goes beyond ordinary negligence into reckless or intentional territory, like a drunk driver going the wrong way on a highway. The purpose is to punish, not to compensate you for a specific loss. Most accident claims never involve them.
The Collateral Source Rule
One rule works in your favor. In most states, the defendant cannot reduce your damages by pointing out that your health insurance already covered your medical bills. The doctrine prevents the at-fault party from benefiting because you had the foresight to carry insurance, and the jury typically never hears that a third party already paid some of your expenses. Some states have modified this rule by statute, but the traditional version remains the majority approach.
Liens on Your Settlement
This is where many people get blindsided. If your health insurer paid for accident-related treatment, it likely has a contractual right to be repaid out of your settlement. The same goes for Medicare and Medicaid.
Most employer-sponsored health plans include a subrogation clause that entitles the insurer to recover what it paid once you receive compensation from the at-fault party. Plans governed by federal ERISA rules can enforce this right by placing an equitable lien on the specific settlement funds.2Office of the Law Revision Counsel. 29 USC 1132 – Civil Enforcement The insurer can’t go after your other assets, but it can claim priority over the portion of your recovery that corresponds to the medical bills it paid. An attorney can often negotiate these liens down, sometimes significantly, but you need to know they exist before you spend the check.
Medicare is stricter. If Medicare paid for any of your accident-related care, federal law requires reimbursement from your settlement. Once a settlement, judgment, or award is reached, the responsible party must reimburse the Medicare Trust Fund, and interest begins accruing if repayment isn’t made within 60 days of notice.3Office of the Law Revision Counsel. 42 USC 1395y – Exclusions From Coverage and Medicare as Secondary Payer You’re also required to report any pending liability case to the Benefits Coordination and Recovery Center and provide settlement details including the date, total amount, and attorney fees.4CMS. Medicare’s Recovery Process Ignore Medicare and the government can pursue you directly.
What the IRS Takes
Not all settlement money is treated the same way, and the tax hit can be real if you aren’t prepared.
Compensation for physical injuries or physical sickness is excluded from gross income. That covers payments for medical bills, pain and suffering, and lost wages, as long as the underlying claim is rooted in a physical injury.5Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness This is the rule most accident victims benefit from.
Emotional distress damages are taxable unless they stem directly from a physical injury. If you settle a pure emotional distress claim with no underlying physical harm, that money counts as income, though you can exclude the portion that reimburses medical expenses for the distress as long as you didn’t already deduct them on a prior return.6Internal Revenue Service. Tax Implications of Settlements and Judgments Punitive damages are almost always taxable regardless of whether the underlying case involved physical injuries.5Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
Settling vs. Suing
Most personal injury cases settle. Negotiations typically begin when your attorney sends a demand letter outlining your injuries, your evidence, and the compensation you’re seeking. The insurer counters, and the two sides either reach a number or reach an impasse.
Settlement gets you paid faster, avoids the unpredictability of a jury, and saves on litigation costs. The trade-off is that settlements often come in lower than a jury might award, particularly where liability is clear and injuries are severe. Signing a release permanently closes the claim.
If talks stall, some jurisdictions require mediation or arbitration before trial. Mediation is non-binding help from a neutral; arbitration is more formal and can be binding if both sides agreed to that. Litigation is the last resort. Discovery, depositions, experts, and pre-trial motions can stretch a case out a year or more, but when the insurer refuses fair compensation and the damages justify the effort, trial may be the right call.
Know Your State’s Deadline Before It Catches You
Every state sets a deadline to file a personal injury lawsuit. Miss it and you almost certainly lose the right to sue. The window ranges from one to six years depending on the state and the type of claim, with two or three years the most common.
Some states recognize the discovery rule, which starts the clock when you discover (or reasonably should have discovered) the injury rather than when the accident occurred. Deadlines may also pause for minors or people without legal capacity, restarting when they turn 18 or regain capacity. Find out your state’s deadline early. Starting the process well before it also gives you more leverage with insurers who know you still have the option to sue.
When To Hire an Attorney
For anything beyond a straightforward fender-bender with minor property damage, legal representation is worth serious consideration. An attorney handles negotiations with the insurer, gathers and organizes evidence, calculates damages people often underestimate (especially future medical costs and lost earning capacity), and keeps the case on track with filing deadlines.
Most personal injury attorneys work on contingency. You pay nothing up front and the attorney takes a percentage of whatever you recover. The standard fee is roughly one-third if the case resolves before litigation, rising to around 40 percent if it goes to trial. Ask how the fee is calculated relative to expenses: whether the attorney takes their percentage before or after deducting costs like filing fees, expert witnesses, and medical record retrieval can make a meaningful difference in your net recovery.
Many attorneys offer free initial consultations. Use the meeting to ask about their experience with cases like yours, how they communicate with clients during the process, and what timeline they expect. A good attorney will give you a realistic sense of what your claim is worth rather than telling you what you want to hear.