Personal Injury vs. Property Damage: What’s the Difference?

Why do some attorneys handle one or the other, but not both?

After an accident, you're exhausted. You've just been through a traumatic experience. All you want to do is hand everything over to someone who knows what they're doing. That person would be your attorney.

You do the right thing – you collect some candidates, you interview them like you would for a job, and you hire the one who looks the most qualified. But then you hear something strange:

“I don't handle property damage claims. I only handle personal injury claims.”

Um, I'm sorry. What?

Why wouldn't a lawyer handle both claims?

The issue is that many attorneys don't solely handle property damage claims in relation to car accidents. They will handle them in conjunction with a personal injury claim, true – but they won't do them alone.

Mack Babcock, a personal injury attorney from Denver, Colorado, explains why:

“Consider your run-of-the-mill car accident. The property damage is usually less than $5,000 and often less than $2,000. The dispute is usually over value and not liability. Meaning, the tortfeasor's carrier is not disputing liability, but isn't willing to pay what the victim wants them to. The difference might be a few hundred dollars, but usually no more than a few thousand. It really doesn't make sense for a client to incur a 33% to 40% contingency, plus costs, to fight over a few thousand dollars. It also doesn't make sense to pay an attorney hourly when attorneys usually charge $250 to $400 per hour. Even if they win the fight, they'll end up with less in the end.”

The other problem is that attorneys usually slow down the process (think about it – more cooks in the kitchen spoils the soup).

Property damage claims are normally worked out within days or weeks, and there are serious consequences when they are prolonged. For instance, the victim's insurance carrier will only pay for a rental car for a short period of time. Dragging that out will drive up costs and mean less for the victim if he or she ends up having to pay for transportation.

“Cars are a necessity,” says Texas attorney Neal Davis, “and being without one is a huge inconvenience…. Many times, the client's own insurance handles the property damage claim and seeks subrogation from the liable third party's carrier without the attorney ever getting involved. So many times, attorneys just handle the personal injury claim since the property damage claims are processed differently among the respective insurance carriers.”

A lot of the time, property claims can be handled without the help of an attorney.

Most people already have collision and comprehension coverage under their policies. These carriers have good faith obligations and must be considerate when resolving collision and comprehensive claims. Insurance companies also subscribe to inter-company arbitration, which makes it far less expensive for them to resolve property damage disputes.

“Essentially, what happens is that your own carrier fixes your car – less your deductible – immediately,” says Babcock. “They then go after the other carrier for reimbursement. If they can't agree, they submit the dispute to an organization that arbitrates tens of thousands of these things every day. It's just done on paper. The arbitrator looks at the docs and says who wins. The insurance carriers all subscribe to that process and so they automatically pay you whatever the arbitrator says. If your carrier wins, you get your deductible back, and your car has already been fixed.”

If you've damaged a Ferrari or smashed your car into a building, that is a different conversation  Tweet this

On the other hand, if you've damaged a Ferrari or smashed your car into a building, that is a different conversation that an attorney would want to have.

Higher-end property damage claims usually involve people running cars into buildings, houses, or other property that costs more than it would to fix a vehicle. Attorneys think in thirds because that is generally what they are looking to recover, so a third of a $150,000 claim is far more likely to net them a good paycheck.

Additionally, if you have a personal injury case that also involves a property damage claim (such as a car accident that involves injuries), attorneys would handle both at the same time. If the attorney handles the property damage claim as well and negotiates with the adjuster, then he or she would typically take part of the fee.

The moral of the story? Buy appropriate car insurance. That way, if you get into a car accident and need help, you know that you are covered.

Need more help? Check out these resources:

• Dealing with insurance claims adjusters
• Filing a bad faith lawsuit
• Uninsured motorist coverage