The descriptions provided below may help you understand legal terms and insurance terms as they are frequently used in letters or conversations about personal injury accidents. The definitions do not include every possible meaning of the terms being described.
Accept Liability – Accepting Responsibility. This means an insurance company is willing to pay a claim.
Adjudicate – Settle by court decree. Requires going to court.
Agreement – A bargain. Reaching a settlement without going to court requires an agreement.
Alternative Dispute Resolution – Procedure for settling claims without litigating, usually arbitration.
Answer – Response of a defendant to the plaintiff’s complaint.
Appearance – Coming into court as a party to a suit. Usually a lawyer appears on behalf of the party.
Arbitration – An alternative to going to court. The plaintiff and defendant present their cases to an arbitrator.
Bad Faith – If your insurance company refuses to pay you for a legitimate claim that they had purposely led you to believe would be covered by your policy.
Casualty – An injury or property loss caused by an accident.
Causation – The act which produces an accident.
Damages – Money paid as compensation for an injury or loss caused by negligence.
Demand – To ask the at-fault driver’s insurance company to pay your injury claim. This usually occurs after you have finished medical treatment for your accident injuries.
Disability – Incapacity to perform tasks usually encountered in a person’s employment.
Endangerment – An act which brings into danger or peril.
Future Medical Expenses – It is sometimes not possible to completely cure accident injuries. Continuing medical treatment costs can be estimated.
General Damages – This term refers to damages that do not have a specific dollar value. Some examples of general damages include pain and suffering and loss of enjoyment of life or compensation for the hassles and inconveniences involved with an injury. Although it is hard to put an exact value on these types of damages, they have significant value and are a large part of injury claims.
Judgment – A formal decision of a court.
Loss of Earning Capacity – Permanent disabilities can reduce your ability to earn a living in your current field of work. Putting a dollar value on these losses often starts by having a Functional Capacity Evaluation (FCE) performed by a physical therapist. The FCE results are given to a doctor who writes a report about Loss of Earning Capacity.
Negligence – Carelessness. Failure to exercise reasonable care to prevent injury to others. Personal injury lawyers are interested in auto accident injuries resulting from negligence.
Present Cash Value – The current value of future income or expenses for a series of future payments discounted for an assumed interest rate. The present value is always less than the total of the future payments because it is assumed that money received now will earn interest if it is invested. The assumed interest rate is an important variable. The smaller the assumed interest rate the larger the Present Cash Value. When the future payments being evaluated are for medical costs, it is important to consider that medical costs often increase more rapidly than inflation.
Settlement – An agreement between disputing parties to settle an injury claim without involving litigation.
Special Damages – These damages can be given a specific dollar value. They include things like loss of income or loss of future income. They also include all types of property damage such as damage to your car. Medical expenses and future medical expenses are another large part of special damages.
Tort – A “wrong” committed by a “tortfeasor”. Car accidents harm victims by causing physical injuries and financial losses.