The Difference Between Restitution and an Insurance Claim

Certain car accidents may involve criminal liability on the part of a negligent driver. This is most common in car accidents that involve drunk drivers who when an accident occurred as part of a criminal act. The negligent driver, in this case, faces criminal charges from the district attorney and civil charges from those injured in the accident. It is important to understand that civil and criminal court represent two difference justice systems. Each has its own priorities and regulations. In terms of the compensation an injured person receives, a key difference involves restitution and an insurance claim.

What is Restitution?

Restitution is a penalty imposed in criminal court. If a person is found guilty of a crime, their penalty may include fines, jail time, and a variety of other possible consequences. When the crime seriously injures another person, such as in a car accident, the court may order the convicted person to pay restitution to the victim as part of the sentence. Most often, the DA may impose restitution as a requirement for a plea bargain.

Restitution usually starts with a questionnaire sent to the victim. This questionnaire attempts to assess the damage done to the victim so the DA has an idea of what amount to request as restitution. This questionnaire can confuse some people who may think they are filling out paperwork for their civil lawsuit. Worse, they may expect that they will be paid the restitution amount they are requesting or that the document represents an official promise of payment.

In fact, the questionnaire may be irrelevant. It is usually held in reserve to ensure the victim has adequate compensation in case insurance is not sufficient. The DA may also be using it simply as part of a prosecution strategy against the defendant without any real intent to get the money. While it is important to fill out a restitution questionnaire carefully and completely, it does not help a victim at all with their civil lawsuit.

The Civil Lawsuit and Insurance Claim

When most people think of getting money for a car accident or other injury, they are probably thinking about a civil lawsuit. Lawsuits do not require that either party is a criminal, only that some wrongful damage was done as a result of negligence. Rather than an attempt to impose criminal charges or penalties, a civil lawsuit merely attempts to acquire money as compensation for any damage sustained.

In most lawsuits, especially auto accidents, the money offered in a civil lawsuit comes from insurance. The lawsuit does not target the driver directly. Instead, it targets their insurance company that is obligated to pay damages in accordance with the insurance policy the driver holds. This is a claim.

A civil lawsuit or claim is altogether separate from any criminal charges or liability. The results of each legal activity can also differ. It is entirely possible for a person to be found not guilty of criminal wrongdoing and still be required to pay money in a civil lawsuit. That said, the two can affect each other. Whatever reasons allowed the person the not guilty verdict may impact the damages in the civil lawsuit even if the verdict itself does not.

How an Insurance Claim and Restitution Interact

Strictly speaking, there is little to no legal interaction between a claim and restitution. In a practical sense, many of the same facts and investigation are used in both cases. A client will generally work with their attorney to gather evidence that determines the value of a claim. This same evidence may help determine the value of restitution. This means that it can be beneficial to speak with an attorney and complete investigation for the claim prior to filling out the restitution questionnaire or speaking to the DA about restitution.

The value of an insurance claim may be limited by the coverage the person has according to their insurance policy. From a legal standpoint, there is no limit to economic damages. From a practical standpoint, a defendant can only settle for what they can afford to pay.

An attorney can help a client understand how restitution may affect their case. Even though restitution and claims are two separate areas of law, most personal injury attorneys have knowledge and experience related to restitution since the two often coincide.