Picture this scenario: You get into a car accident that is not your fault. You get injured in the accident, causing you to have to miss a lot of work. On top of it all, you’ve got big hospital and medical bills to pay. You’ve filed a personal injury claim with the at-fault party’s insurance company and have been offered a settlement. Should you accept?
If this situation hits close to home, it’s understandable that your knee jerk reaction would be to settle quickly just to get things over with and carry on with your life. Nobody wants a personal injury case to drag on for years, after all, and it seems much easier to accept whatever you’re offered and move on.
However, there are a few important things to understand about accepting a settlement offer from insurance companies:
- You’re agreeing to (potentially) less money. When an insurance company makes you an initial settlement offer, it’s unlikely that such an offer will compensate you fairly for all the damages you’ve incurred: lost income, out-of-pocket expenses, and medical bills. The allure of such an offer is that you might need the money now. The downside, however, is that your injuries might be ongoing or worsening, and thus, you have additional expenses coming.
- You’re giving up your right to negotiate. If you’re impatient, it is tempting to accept whatever you’re offered. If you can afford to wait, however, you should collect your evidence that you are indeed due a certain amount of money to compensate you for your injuries and losses and enter into negotiations.
- You’re trading speed for money. Personal injury cases can take time to settle because, understandably, the insurance company wants to disprove that their client was at fault or negligent. They might also want to challenge your right to sue, which means they’ll drag their feet until a judge rules otherwise. So, when you settle, you’re bypassing all the headache of a long litigation process and simply “taking what you can get.”
- You’re giving up your right to sue. Last but not least, it’s critical to understand that when you accept a settlement payout from an insurance company, you’re not just accepting money. You’re releasing the defendant from liability. This absolves the defendant and his/her insurance company of any further responsibility.
This last point is especially important to understand. Let’s assume you accept a settlement, unknowingly giving up your right to file any additional claim with the insurer. However, six months after the accident, you’re still having blinding headaches, you’ve lost your job due to too many missed work days, and the settlement you received didn’t cover even a fraction of your incurred losses. At this point, you would be out of luck if you agreed to a settlement and signed a release releasing the other party from further liability.
Bottom line: you should always talk with a personal injury attorney when pursuing a claim or considering accepting an insurance settlement. They can help you get a better idea of what your potential settlement might be if you choose to sue. At the very least, it is important to understand what you’re giving up when you accept a settlement offer and speak with your doctor about your course of medical treatment. Accepting an offer before you’re fully healed might put you in serious financial trouble.
If you do pursue a lawsuit but are concerned about paying your bills while you await resolution of the case, Resolution Funding can help. Pre-settlement funding is a good solution when you need to make ends meet while you wait for the litigation process to pay out. Call us to learn more and to ask any questions you have about insurance companies and settlement offers.