What is the Payment Process for a Third Party Auto Insurance Claim for a Car Accident I was in?

If you’re talking about someone else’s auto insurance, you’re talking about a third-party automobile insurance claim.

A third-party insurer has no moral or contractual duty to you. Their duty is to the other party—the one who pays their premiums. They need to defend him if he’s sued (which it seems you’re doing, or at least contemplating), and they need to pay, up to the limits of the policy, if he’s found liable. Not to be harsh, but they don’t care about you or your injury, except as it impacts their duty and their bottom line.

The third-party insurer wants to discharge its obligation to its policy holder—the person who ran into you—at the lowest possible cost to itself. If they’re offering $5,000, clearly they think that he is likely liable for something—otherwise, they wouldn’t be offering anything at all. $5,000 probably represents their judgment of what you might accept quickly, sparing them the cost and uncertainty of a lawsuit. If they thought they had to offer more, they would; or if they thought they could offer less with a credible chance of you accepting it, they would do that.

However, just as they do not have any duty to you, you do not have any duty to them. You are under no obligation to take their offer, if you think it’s inadequate or that you could get more by proceeding with a lawsuit. You should—with your lawyer’s counsel and advice—weigh the extent of your injuries and the damages you could reasonably sue for, the odds of you winning the case, and the cost of bringing a lawsuit, against the insurance company’s offer and decide whether, on the balance, it makes more sense to take the offer or to proceed further with a lawsuit, in hopes of a larger settlement or winning at trial.