Settle Your Case Without an Attorney? Beware the Risks
We recently spoke to a young woman who had settled her auto accident case six months ago. She had been injured in a pretty severe crash where the other driver was clearly at fault. That driver was drunk, as a matter of fact. The injuries were serious.
Shortly after the accident she was contacted by the other person's insurance company. The claims adjuster was very courteous. She even visited Jill at her house because Jill could not get out of the house for several weeks.
This nice young lady (who we will call “Jill”) had incurred about $35,000 in medical bills, most all of which have been paid by her medical insurance benefits that she has with her employer. Jill told me that she had not wanted to hire an attorney because her case was "straightforward" and she thought she she would end up with more money in her pocket if she settled her case directly with the insurance company. The claims adjuster even said some things to Jill about lawyers “taking most of your settlement” during her discussions with Jill.
The insurance adjuster had Jill sign some medical releases and collected all of the bills and records. The adjuster knew that Jill's out of pocket expenses weren't that high since she had good health insurance. She had paid a few co-pays but her deductible had already been satisfied so she hadn't spent much money on the accident at all. Jill had also missed work but her employer paid her because she had accrued sick leave that she could use.
When it came time to settle the case after Jill had fully recovered from her injuries she went on the Internet and visited “forums” where lawyers and lay people had posted messages about accident cases. She visited some of those “Ask a Lawyer” websites and exchanged several emails with attorneys who were “bidding” on her case. (She didn't know that the “featured attorneys” at many of those sites are the ones who have paid a lot of money to be “featured.”) She also chatted with non-lawyers across the country and thought she knew the “secret formula” for getting fair value for her case.
Jill settled her case for $15,000. She thought that was very fair since she had spent a couple of thousand dollars of her own money and her employer had paid her while she was out of work. She ended up pocketing almost $10,000 for herself and she was thrilled.
Now Jill wanted me to help her take back her settlement with the insurance company. It turns out that her health insurance company had written her a letter asking to be repaid all of the benefits it had paid on her behalf to her doctors for her injuries. It pointed to a “reimbursement and subrogation” clause in her policy. Her own health insurance company wanted all of the settlement proceeds since it had paid out far more than $15,000.
We reviewed her health insurance policy and found out that her insurance company was correct. There it was, buried deep in the policy: “If we pay you medical bills for injuries you receive in an accident, and you later recover money from another insurance company for those injuries, you will repay us.”
Since she did not use an attorney she was not aware that her employer's health insurance company might this type of reimbursement. Of course the adjuster from the car insurance company did not mention this to her nor did they have a duty to. The adjuster did not misrepresent anything but didn't volunteer anything anyway. Most Virginia personal injury attorneys, however, know to instinctively investigate and look for this type of clause in a health insurance contract.
All that chatting on the Internet didn't help much. The laws are different in each state and it turns out that she had been getting her “legal advice” from everywhere but Virginia.
My evaluation of Jill's medical records indicated that her case had a reasonable value of at least $127,500. It might have had an even higher value, depending on the drunk driver's blood alcohol level, because Virginia law provides that drunk drivers are subject to punitive damages. Recently a jury awarded over $100,000 in additional damages against a drunk driver. To make matters worse, I told Jill that Virginia law says that she had been entitled to recover for lost wages, after all, because she now could not use her sick leave the next time she got sick and would not be paid by her employer.
The bottom line was that, had Jill used an experienced Virginia auto accident attorney, she would likely have netted over $150,000 to herself for her case. Yes, she would have paid her attorney about twenty five percent of that amount, but it would have been a fee well earned. Because she had settled her case, however, and her own insurance company wanted its money back, she was going to end up with nothing. I told Jill that if she didn't repay her health insurance company she might lose lose those benefits for a time.
So what about “ripping up” that settlement she had made with the car insurance company?
Not a chance. Jill had signed a “full and final release.” The paperwork stated that she had “not relied on the advice of the insurance adjuster” in entering the release and that she had “had the opportunity to consult with an attorney of her own choosing” in reaching an agreement with the company. I advised Jill that these “full and final” releases are binding in Virginia.
An insurance adjuster is generally under no duty to give you legal advice. They typically are prohibited from misleading you but this can be very hard to prove. In most cases they are simply trying to close the claim and their duty is to their customer (the drunk driver in this case,) not to you.
Accident victims should not be afraid to speak to an experienced, board certified, personal injury attorney in their area. Jill would not have thought about taking out her own gallbladder, would she?
Most car accident attorneys will consult with you without charge on an “free initial consultation” basis. Many offer websites filled with useful information. Some have authored books to help consumers understand their rights.
It’s bad enough that you’ve been in a car wreck, and the fact that you are having to handle your Virginia personal injury claim. It’s plain and simple, there’s just nothing fun about it! You’ve probably read or heard how the insurance adjuster will act like your friend and try to destroy your claim or nickel and dime you, but surprisingly this is where you should start.
Most think, “when should I contact my insurance company?” which is a great question. Fortunately you don’t have much to worry about initially with the insurance company! In fact, I strongly suggest you get in touch with them right away regarding your Virginia personal injury accident you’ve had. Even if the car accident isn’t your fault, odds are you have some great parts to your policy which cover things such as towing expenses, rental of a car, or even medical payments. This means you can get these benefits quicker than waiting for the other guy in your accident.
Another key piece to this puzzle is that you could be saving yourself from someone that isn’t covered at all. If your own insurance policy covers uninsured or underinsured motorists coverage and the other driver that caused the accident has no insurance, then you’re in luck. You won’t be stiffed with the bill when the other guy is liable but can’t pay up!
So now that you’re in a bit of a sticky situation and probably have other questions besides when to contact your own insurance company, you may still need help. The best thing to do would be to grab a free resource with great information that will answer all of your questions regarding your personal injury case.
You can download a FREE copy of our consumer guide, The Five Deadly Sins That Can Wreck Your Injury Claim, to learn more about personal injury claims in Dumfries, VA by following this link
If you have a question for Ben, you can submit it confidentially online at JustAskBenGlass.com.