Motor Vehicle Accident Settlement Process in Texas

The cost of a motor vehicle accident in Texas can easily stretch into hundreds of thousands of dollars. The accident itself may be over in a split second, but the aftermath — medical expenses, lost wages, pain and suffering, and disability — may affect your life for a long time or permanently. That’s why the Texas Department of Insurance requires motorists to maintain minimum liability coverage of $30,000 per person and $60,000 per accident to cover damages caused to other road users. Texas car insurance laws require the at-fault party’s insurance company to pay for damages injured victims incur.

However, getting the other driver’s insurance company to pay a fair amount for an auto crash is another matter entirely. For injured victims, it may be challenging to know where to start and what to expect throughout the car accident settlement process. Understandably, the unknowns of the personal injury claims process can make the experience stressful for victims and their loved ones.

Nonetheless, one thing to keep in mind is to never accept the first settlement offer from an insurance company without consulting an experienced motor vehicle accident lawyer. Remember, you only have one shot at recovering the compensation you deserve for your catastrophic injury or losses.

At Morris & Dewett Injury Lawyers, our legal team understands how insurance companies work. We know all about their tricks and tactics and know what to expect. Let us guide you through the car accident settlement process and help you recover the full value of your car accident settlement.

What Is a Settlement?

A settlement is a legally binding agreement between two or more parties that resolves a dispute. Typically, this mutual agreement involves one party paying money to another. A settlement may also include terms such as issuing an apology to the aggrieved party or refraining from certain behaviors.

What Is the Settlement Process in Texas?

Before you and your car accident lawyer enter into settlement negotiations with the insurance company, several steps should be taken, including:

  • Documenting your accident
  • Investigating the crash and assessing damages
  • Getting a diagnosis for any accident-related injuries
  • Seeking appropriate medical care
  • Obtaining evidence, such as witness statements and police reports

If law enforcement officers don’t investigate the accident, you must also report the accident within 10 days if it resulted in injury, death, or property damage of at least $1,000.

Filing a Demand Letter

After reviewing the evidence and medical information, your car accident lawyer will send a demand letter to the other driver’s insurance company. This should be your first contact with the at-fault driver’s insurer. Your demand letter should explain:

  • The details of the crash
  • How the other driver is to blame
  • The severity of your injuries
  • The treatment you’ve received
  • Whether you require additional treatment
  • Other accident-related damages you sustained

Once you’ve sent a demand letter, the insurance company must acknowledge receipt of the claim within 15 days and commence an investigation into the case. The insurance company may request accident-related forms, statements, and information pertaining to the case.

Receiving a Reservation of Rights Letter

Once the insurance provider receives your demand letter, they’ll send you a Reservation of Rights letter stating they are investigating your claim. They’ll also state that they reserve the right to deny your motor vehicle accident claim if it lacks merit. This is a routine letter from insurance companies that need not worry you.

Negotiating a Settlement

An insurance company has 15 business days after receiving all documents, statements, and forms to accept or deny a claim. If the insurance company agrees to settle your claim out of court, they will offer you a settlement check covering your injury and losses. Depending on the type of accident, the severity of your injury, your financial losses, and other variables, our car accident lawyers at Morris & Dewett will assess the offer and either accept the settlement or proceed with further negotiations.

If your motor vehicle accident lawyer reaches an agreement with the insurance adjusters, you can negotiate an out-of-court settlement. If this isn’t feasible, the insurance company must provide reasons for denying your claim. It’s important to note that cases can still be settled out of court even after a lawsuit is filed.

Drafting a Release

Before the defendant’s insurance company releases a settlement check, you’ll have to sign some paperwork, the most important of which is a release of liability form. As the name suggests, this document releases the defendant from any liability, even if your condition worsens in the future.

By signing this form, you agree not to sue the defendant or demand more damages once the check is issued. This is a legally binding document that protects both parties in the dispute.

Issuing a Settlement Check

Once you sign the release, the Texas Insurance Code requires the insurer to pay the claim or part of the claim within five business days. The insurance company will issue you and your attorney a check, which they will hold in a trust until it clears. Once it clears, your lawyer will deduct any outstanding expenses and liens, such as hospital and medical liens, subrogation claims by health insurance companies, and legal fees. Once your debts are cleared, your lawyer will give you the remainder of your settlement. 

Receiving Settlement Funds

Once all bills, liens, and fees are settled, your Texas car accident attorney will release the remaining settlement amount to you. You may now use your money as you wish. 

Contact Our Texas Motor Vehicle Accident Lawyers for Sound Legal Advice Today

Insurance companies will often pressure injured victims to settle quickly. Never settle immediately when it comes to insurance claims, even if the insurance company insinuates that you won’t get any other offer. It’s never in your best interest to settle before an accurate assessment of your injury and damages has been completed. It’s a ploy to keep their costs low and maximize profits.

If you have been injured in Texas and need help with the car accident settlement process, call our personal injury lawyers at 888-492-5532 to schedule a free consultation. We know all about Texas car insurance and the settlement process and are ready to answer your questions.


  1. Automobile Insurance Guide. Texas Department of Insurance. Accessed on August 11, 2023.
  2. Settlement Meaning and Definition. Collins Online Dictionary. Accessed on August 11, 2023.
  3. Driver’s Crash Report. National Highway Traffic Safety Administration. Accessed on August 11, 2023.
  4. Processing and Settlement of Claims. Texas State Legislature. Accessed on August 11, 2023.

Morris & Dewett provides this information to the public for general education and interest. The firm does not represent clients in every topic discussed in answers to frequent questions. The information is curated and produced based on questions commonly asked or search terms commonly used. Every effort is made to provide accurate information. Do not make any decision solely based on the information provided, please seek relevant counsel for each topic area. Consult an attorney before making any legal decision, consult a doctor before making any medical decision, and consult a financial advisor before making any fiscal decision. Information provided is not legal advice. If you have any legal needs, please do not hesitate to contact us. We are pleased to assist you.

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