Articles Posted in Insurance

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IMG_1314-1-300x225Don’t ever buy insurance with a family exclusion.  Here’s how it worked for a recent client of mine:

Mom was driving, didn’t pay attention to the slippery conditions of a Maryland winter, and her car slid into oncoming traffic.  Her vehicle was totaled, and more devastatingly, one of her twins the back car-seat was catastrophically injured.  She had brain damage, requires a feeding tube, and now needs 24-hour care. Thinking they had done the right thing when they purchased GEICO insurance, their policy provided for $250,000.00 if they injured someone else, or if someone without insurance injured them.

However, there was a caveat that they didn’t pay attention to: if a family member was injured because of the negligence of another family member, the most the insurance would pay out is $30,000.00.  That’s $30,000.00 for nursing care, medicine, therapies, wheelchairs, disability vans, and ramps to the front door.  From a legal perspective, it was easy—the insurance company offered $30,000.00 without much more evidence than the initial hospital bill.  From an emotional and financial perspective, however, it was devastating.  The family needed to go on public benefits, which do not provide nearly the level of care that sweet girl deserves.

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P1010814-300x225Insurance is an interesting thing.  You pay regularly (monthly, or semi-annually) to protect your family when they get hurt, and to protect other people that you may accidentally hurt.  However, many of our clients are steadfast in their efforts to avoid using their own car insurance at any cost, fearing an increase in their insurance rates.  What’s the point of having insurance if you don’t use it when you need it?

We understand the gut reaction—if I wasn’t at fault, why should my insurance pay?  There are three situations where you should go through your insurance policy.  Most importantly, you should know that your insurance company is not allowed to raise your premiums when you take advantage of these policies.

Personal Injury Protection (PIP)

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Calculator-III-03-25-18-278x300Every now and then we get a call from someone who has been slugging it out with the insurance company on their own in an effort to save legal fees and handle it themselves.  These calls often come at the time that negotiation is wrapping up because the callers want some advice about whether the settlement offer is a good one.  We try to be helpful to people who call us, and we take the position that lawyers should be responsible members of the community, so we will usually try to give some helpful general advice.  The truth that some lawyers won’t tell you is that yes, you can settle your own personal injury case.  Here are some criteria to determine whether you forgo a lawyer and settle a case on your own.

The main question that people have when talking to a lawyer while simultaneously trying to settle their own case is this:  “What happens if I hire you and we get more, but I personally get less?”  This is not a question with a simple answer. Until we evaluate your case, we cannot always make you a guarantee.  Every case is unique, and we will come up with an agreement that reflects the work you did on your case.  Without all the information about your claim, we don’t know whether the insurance company is undervaluing it or valuing it correctly.

The client needs to provide the attorney with as much information as possible regarding their case. This includes all treatment facilities, lost wages, and factors that have changed in the clients life due to the accident.

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Doctors-Invoice-300x268An Authorization and Assignment (frequently abbreviated as an “A&A,” or called a “letter of protection,”) happens when a medical provider agrees to hold off on collections proceeding until after a personal injury case is resolved (whether by way of settlement or a verdict).

Sometimes, this is the only way to guarantee that a client gets medical treatment.  Some providers are willing to provide treatment only if they have a better chance of getting paid, even if they have to wait until the case is over.  Doctors, running a business, would like assurance that they will be paid before they do the work.  Particularly for clients with no insurance, this is a good way to get treatment when they need it.

In exchange, the lawyers promise the doctors that they will paid before the client gets paid from a case.  Essentially, the doctor gets a lien on any recovery (settlement or verdict), and the lawyer promises (with the permission of the client) to pay the doctor when the case resolves.  Otherwise, the doctor runs the risk that the lawyer will pay all of the money to the client, and that the client will spend all the money or simply refuse to pay the doctor.

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McCoy-266x300Frequently, new clients ask me where they should go to the doctor.  I give the usual disclaimer—I’m a lawyer, not a doctor (it’s a reverse Leonard McCoy, M.D.).  But, I can offer suggestions.

My preference is for clients to find their own medical providers, typically through their health insurance.  The reason for this is twofold:  first, it prevents any claim from the insurance company that the medical treatment was “lawyer-directed,” which is their claim that the doctors and lawyers are in cahoots, and conspire to give fake treatment or inflated medical bills.  We know that the doctors we recommend are good, honorable physicians, but that doesn’t stop the claim.  Second, doctors we know might not accept a client’s health insurance plan, and we find that it is best to have medical treatment paid for by health insurance—it often makes it easier to settle the case or pay out the case at the end.  We might have to pay back the health insurer (usually not everything they paid—typically only two-thirds of whatever they paid), but at least if the worst happens and the case is lost, our client won’t have outstanding medical bills.

That said, sometimes we need to recommend medical providers.  In most cases, this is because our clients might not have medical treatment, or may not be able to afford the co-pays for extensive treatment.  Doctors we recommend are usually able to hold off on receiving payment until after the case is concluded—that means they won’t bill the clients during the pendency of the case, and won’t send the clients to collections (which could ruin their credit, if they can’t afford to pay).  If a client doesn’t have health insurance, they can usually tell a court that it is why they needed a doctor recommended by a lawyer, and it will often prevent any implication that the doctor is up to no good.

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Cash-300x150Pre-settlement loans are the scourge of plaintiffs’ lawyers for a couple of reasons.  The first is that they take so much time—shepherding an application from beginning to end, working out details of the money transfer, and making it all happen in time to help the client with the financial emergency that they are having—it can easily add hours to a case.  That wouldn’t be so bad, but for the second reason—loans are often an expensive waste of money for our otherwise deserving clients.

What is a pre-settlement loan?

A pre-settlement loan is a generic term used for money loaned to a client before they are paid from a case.  Sometimes they happen when a client is still receiving treatment, sometimes they happen before a lawsuit is filed, and sometimes loans happen after a settlement or verdict is received, but before the money has been paid.

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Record-Button-300x200I saw a generic internet article about what not to say to your insurance company.  It dealt with all types of insurance claims, but there are a few things it got right for auto claims.  Here is what you should remember:

  • Apologizing: be careful saying you are sorry after an auto accident.  It is laudable to apologize if you are at fault, but just make sure you know that you are fault before you do.  In court, the other side can testify that you apologized at the scene of the collision (or after).  If there is any doubt, leave it to police, insurance adjusters, and lawyers to figure out.
  • Injuries: when talking to the insurance company, it is usually best to limit your discussion about your injuries.  The article mentioned that the word “whiplash” could make the insurance company suspect that you are faking your injuries.  Any lawyer would recommend that you avoid discussing your injuries at all.  You may need to explain it to your PIP adjuster when you submit a PIP application, but you should refuse to discuss it at all with the opposing company.  This is especially true right after the accident—your injuries may not have fully realized at that point, and mentioning that you are okay could harm your claim.
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Total-Loss-11-26-11When an auto case settles, or after the judge or jury give a verdict in your favor, the insurance company will send your lawyers a check.  Your lawyers will ask your permission to sign your name to the check, and they will deposit it in an escrow account.  The escrow account is one of the safest, most regulated parts of lawyering.  Lawyers can lose their ability to practice law if they don’t handle the escrow account exactly right.  It is a near-sacred duty to the client.

After that, the lawyer will need to disburse the money to everyone who is entitled to part of it.  You can see a sample settlement and disbursement form here: Settlement & Disbursement (03-05-18).   In general, the money goes three places:  to you, to your lawyer, and to the other people (usually medical providers or health insurance companies) who are still owed money.  Let’s run through a sample distribution.

Let’s say your case settles for $300,000.00.  The amount of money your lawyers get is determined by your contract with them—by the retainer agreement (sample here: Retainer (Form-Auto)(03-04-18)) you signed.  Most lawyers have the same fee agreement for settled cases—they get 1/3 (or 33.33%) of the total gross settlement.  (If you are active military or a veteran, let us know—as part of our appreciation, we cut our fee percentage!)  In our example, 1/3 of $300,000 is $100,000.  Sounds like a lot, and it is.  The question to ask yourself is, without your lawyers, would you have received as good of a verdict?  If you hire cut-rate lawyers, would you still do as well?

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Crash (2 vehicles).jpgAn automobile accident can turn your life upside down. There’s so much to do–find reliable transportation, get to the doctor, deal with insurance companies, and survive missed work. The easiest way to know if you have a claim is to consult with a lawyer–don’t let the insurance company convince you that you have a claim (they are, after all, looking out for their own best interests).

Law School for Non-Lawyers

There are four requirements for every personal injury case. In order to recover in a lawsuit, each must be proven. For a settlement, the strength of one may help to overcome deficiencies in another.

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Norwood jury box 2.jpgSo your lawyer made a claim to the insurance company, and the case didn’t settle. Cases don’t settle for several reasons, including:

  1. The insurance company denies liability, thinking that their driver wasn’t at fault
  2. The insurance company believes that you were at fault for the collision