What is the difference between a lawsuit and an insurance claim?

A lawsuit and an insurance claim are two different ways to resolve the same problem when you’ve been involved in an accident. In California, accident law is composed of civil rules and regulations around how you can seek justice or compensation for damages caused by an accident. A lawsuit is one way to seek justice after an accident. A lawsuit is a legal action stopped by an individual or a company seeking compensation for damages either through a judgement or an out-of-court settlement. This is usually initiated by filing a complaint in a court of law. An insurance claim is another way to seek recompense after an accident. An insurance claim is a request done by the insured person (or their representative) to an insurance company for payment or reimbursement of a loss based on the coverage provided by their policy. The insurance company will review the claim and will determine whether it is eligible for payment. While both lawsuits and insurance claims can provide compensation for losses, a lawsuit often includes additional legal action such as an investigation into the causes of the accident. Depending on the situation, a lawsuit may yield more favorable results than an insurance claim.

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What is the difference between a lawsuit and an insurance claim?

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