car accident/lawyer question

[salsah]

dh was in a car accident last month. the other driver was at fault and his insurance company contacted us immediately to offer a settlement amount for bodily injuries/pain/suffering. we did not accept because it was too soon and dh was still be treated. some of dh's co-works told him that he should find a lawyer to represent him/mediate. i'm wondering if it is really necessary/worth it. i know that the number that the insurance company offered is low but i'm not sure what is reasonable and if we can negotiate with the insurance company ourselves. will the lawyer be able to get twice as much as we can get negotiating on our own? (roughly twice because the lawyer will get 1/3 plus costs).
are there other factors to consider in retaining a lawyer vs handling it on our own?

[wellyes]

If his injuries were serious enough for them to offer and pain and suffering settlement immediately, then yes I would probably have at least one conversation with an attorney. Unless he's completely fine now and you would feel satisfied taking a quick check and moving on.


I was involved in an auto related personal injury case once as the victim but my injuries were life changing (am fine now, was many years ago). It was a multiple year process. Not something I would go through for a minor injury, if lost wages were all covered by disability, if I recovered fully and quickly, etc.

[mctlaw]

I am a defense lawyer and handle these types of claims (I missed the thread about frivolus litigation earlier - about 1/2 my cases are that variety!) A lawyer may be worth your while, although since there is no question about fault, if you or your husband has negotiating experience, it is worth a go yourself, as you are right, the typical contingency fee is 1/3 plus costs (the costs should be minimal unless it goes into suit).

This is general and not specific to you since I don't know your state or particular situation (how do ya like the disclaimer:wink2:), but an injured person may be entitled to payment of the medical bills (yes, even if your health insurance has paid for them, but they may assert a lien or a right of subrogation so you have to watch out for that and negotiate it too if it occurs), plus pain and suffering plus an amount for any permanent/continuing disability. Wage loss can also be compensable, but generally not "lost" sick time that was compensated for. Pain and suffering is entirely negotiable and depends on the individual circumstances. Many plaintiff's lawyers used to figure/hope for an amount like 3 times medical bills plus any wage loss, but in my opinion that calculation has gone way down and is fact specific. For example, if your husband's medical bills are mostly diagnostics and he didn't suffer painful/long lasting injuries, he would arguably be entitled to less. On the other hand, the majority medical bills are for valid therapies (watch out for chiropractic, not saying it's not valid, but its considered questionable), the pain and suffering can be higher.

Those are some things to keep in mind, feel free to PM me if you have further questions. Oh yeah, and if you get a lawyer, stay far away from the guys with the big phone book ads. Hope your DH is doing better!

[salsah]

(yes, even if your health insurance has paid for them, but they may assert a lien or a right of subrogation so you have to watch out for that and negotiate it too if it occurs)

thanks for your response. do you mind explaining the "subrogation" part of this?

[salsah]

It was a multiple year process. Not something I would go through for a minor injury, if lost wages were all covered by disability, if I recovered fully and quickly, etc.

that is how i feel. i don't want to get into a big mess. but at the same time, the other party's insurance company was trying to settle w/in a week of the accident and for such a low amount, i just didn't feel comfortable.

[ThreeofUs]

My insurance (Allstate) has free specialized law services. Check with your insurance company.

[mctlaw]

thanks for your response. do you mind explaining the "subrogation" part of this?

Contractually speaking subrogation is, pursuant to your health insurance policy contract, the insurance company's right to attach itself to your (ie DH) personal rights of recovery in a personal injury to the extent they are entitled to make themselves whole for anything the health insurance company may have paid out on your behalf. Practically speaking it just means you may have an obligation to pay back your health insurance co. out of any settlement. However, it may not be widely known that many health insurance companies either never assert this right, or, they will accept a greatly reduced amount to satisfy their interest.

For a simple example if your health insurance paid a $1000 bill and your DH got a $5000 settlement they are entitled to their $1000 back but only if they ask for it, and that $1000 can be negotiated to something much lower. The reason they are willing to negotiate is that they realize they could get nothing if you don't pursue the claim or a lawsuit, and also, it is your (or your attorneys) efforts that are getting them this money back, and there is a recognized value to this.

HTH!

[Melbel]

I think your instincts are correct that it is too early to make an educated decision re. settlement. When I was involved in a car accident, at the scene, I thought I was fine. The next day and first year thereafter, I had signs of soft tissue type injury. We then discovered a herniated disk when I finally had an MRI. By year 3, after exhausting less invasive measures, I had my first back surgery. Even though I am an attorney, I still hired an attorney who specialized in PI cases to handle my claim/settlement because he was much more experienced in what amount was reasonable and had existing relationships with the insurance company claims reps.

If I were your DH, I would consult with an attorney to determine the statute of limitations (the cut off for filing a law suit) and to obtain guidance on the value of a potential claim. Here, initial consultations are free and there is no obligation to sighn up. It would also be wise to get a second opinion. If it is a low value claim, at least you will have insight as to the how much is reasonable. Definitely get recommendations for an attorney (preferably a lawyer's lawyer if you know any attorneys). You can also search Martindale Hubbell for attorneys who are AV rated and specialize in personal injury.

[snowbunnies300]

I used to work for a subrogation company. I negotiated recoveries for health plans for 5 years. Subrogation is essentially having the responsible party pay for the medical costs associated with an injury. When your health insurance pays claims that is money out of it's own fund/pocket. Your health insurer pays the claims as a curtsey to you. Thus there is subrogtion which the laws state your insurer can recover monies should you receive reimbursement for your injuries.

I would first find out if your health plan is self funded ERISA (which is governed by federal law) or fully insured (which is governed by state law). ERISA plans are employer funded and they must continually add money to the fund to pay any health related claims that are covered under the plan. Therefore your employer is essentially the payer of the plan. A fully insured plan pays a premium to a insurance company - much like your own auto insurance. If you have a lot of claims your yearly premium goes up but you don't have as much of an investment in your plan. In my experience fully insured plans have a harder time recovering monies due to the state laws are not as strong as the federal ones and many times their plan language is not strong.


Pull out your current plan language for your health plan. Everyone gets a booklet each year which says what services are covered etc.. Look at the table of contents. There should be a section on subrogation. If there is a portion that reads something to the effect "to be reimbursed fully, regardless of whether or not you are made whole from any recovery or insurer regardless of how classified. " this language is considered strong language. Also many times there is a portion which states the plan will not be responsible for any attorneys fees and/or costs associated with the recovery.

Most third party payers, the company that pays administers the plan (receives and pays the bills), have software that looks for certain coding on bills. If it pulls up codes that may indicate an injury they will send a claim onto a subro company or they may have an in-house subro department. They will start sending letters to you informing you of the plan's rights with a questionnaire asking if you were injured and what happened. The companies I worked for sent 3 letters and if you didn't respond we looked to see if you were ERISA or not. If ERISA we contacted your employer. 99% of the time the employer went to talk personally with the employee asking why they hadn't completed the questionnaire (many times the plan language says you must cooperate with the Plan's rights). Fully insured plans pay a premium and therefore don't have as much "skin" in these matters. They pay a premium because they don't want to have to deal with these messy situations. Yes their premium may go up but dollar for dollar an ERISA plan has way more invested.

There is also a database for insurance companies. This database is one for insurance claims. If you've filed a claim you are in this database. Most subro companies also have access to this. We enter in your info and find out if you have filed an insurance claim. We contact the insurance company and place them on notice of the plan's rights. Most times the adjuster will tell us if you have an attorney and give us that info. We then send notice to your attorney. Most insurers want the attorney to negotiate the subro rights and that is why they so quickly give up attorney info. If you haven't retained an attorney then the insurer will deal with the subro or will have you complete a waiver stating that you will satisfy the subro claim.

Now should you not pursue a claim your plan may have the right to do so (depending on the plan and it's language). This is not done often. Where I worked if it was an ERISA plans we had to get settlement approval from the plan. We would be calling your HR or owner of the company to discuss reimbursement. Now many times a reduction is warranted. Thus I would call your employer and advise that you are not willing to reimburse in full and want the Plan to take a reduction. But explaining this to people who want their money back is not easy. Especially if you or your attorney are offering nothing. The worst "offer" is when the offer is a "go away my client is not made whole from the insurance proceeds". How do I say this, um....most times that went over like a big fat fart in church. A lot of times we would agree to a reduction. Sometimes they agreed to take a 1/3 reduction for attorney's fees as mctlaw said they knew they wouldn't have anything if you and your attorney didn't pursue the matter. Other times they didn't care what your attorneys fees were they didn't think they should pay 1/3 and would take a reduction of say anywhere between 10% to 25%.

If we couldn't come to any agreement on a reduction we would hire an attorney in your state to pursue the matter on behalf of the plan. I know I handled cases where the plan sued the employee to recovery reimbursement. Yes they had to pay fees to recover that money but to the plan it was better than the offer it received from the employee.

Settlement with fully insured plans were different. In my company I had the authority to settle. These were so much easier as I didn't have to educate anyone on the laws of subro and why we should take a reduction. I hated this job. I was good at it but I hated it. All day long fighting with people. All day long having to inform attorneys that yes federal law supercedes state law (where did these people graduate law school LOL). All attorneys tried this as state law is much more friendly to the injured party than a health plan. It was like a glorified debt collector except I was required to deal the attorneys and provide the necessary documentation to support the plan's claim. Meaning I wrote a ton of letters wherein I had to research the applicable state and federal laws and case law then received and had to rebut letters from attorneys stating incorrect laws and case law. But it is a necessary function. It is not fair to the health plan (which includes all employees) to pay claims that it isn't responsible to pay. By obtaining recoveries you keep the costs of the plan down and that keeps your healthcare costs down so that your benefits don't suffer.

Now to my soap box. I've seen many times where people have the minimum state required coverage on their vehicles and no under-insured coverage to go after. Blew. my. mind. when an attorney would call and say "well the medical bills are 50K and there's only 10K in liability insurance and there's no under-insured coverage". WHAT? Your client didn't protect themselves? PLEASE make sure that you have enough insurance coverage should you be involved in an accident that is not your fault. If the other party has pitiful coverage you would be protected under your own policy by having under-insured coverage to make a claim against. Many times you settle for less than the amount of medical bills or the amount of insurance coverage in no ways comes close to making a person whole. If you've got 50K in medical bills imagine what other bills you have that the 10K won't even come close to helping to pay. Along with long term issues related to the accident/injury. I know no one likes to write a big check to auto insurers but you need to protect yourself and your family. And let me tell you, I can count how many times in 5 years where an attorney took a reduction of their fees so you would get more of the settlement funds. I'm not knocking attorneys in any way shape or form. They worked hard in many cases to get you the money but just as a reminder to protect yourself. Ok off my soap box.

Wow this ended up being longer than I thought. Probably more info than you wanted. And mctlaw is correct, not all health plans assert a right to subro. Just be prepared. You can negotiate but don't insult with a very low ball offer or no offer. Be reasonable and they will be reasonable back.

[salsah]

Contractually speaking subrogation is, pursuant to your health insurance policy contract, the insurance company's right to attach itself to your (ie DH) personal rights of recovery in a personal injury to the extent they are entitled to make themselves whole for anything the health insurance company may have paid out on your behalf. Practically speaking it just means you may have an obligation to pay back your health insurance co. out of any settlement. However, it may not be widely known that many health insurance companies either never assert this right, or, they will accept a greatly reduced amount to satisfy their interest.

For a simple example if your health insurance paid a $1000 bill and your DH got a $5000 settlement they are entitled to their $1000 back but only if they ask for it, and that $1000 can be negotiated to something much lower. The reason they are willing to negotiate is that they realize they could get nothing if you don't pursue the claim or a lawsuit, and also, it is your (or your attorneys) efforts that are getting them this money back, and there is a recognized value to this.

HTH!

great, that's what i thought, thanks.

[salsah]

I think your instincts are correct that it is too early to make an educated decision re. settlement. When I was involved in a car accident, at the scene, I thought I was fine. The next day and first year thereafter, I had signs of soft tissue type injury. We then discovered a herniated disk when I finally had an MRI. By year 3, after exhausting less invasive measures, I had my first back surgery. Even though I am an attorney, I still hired an attorney who specialized in PI cases to handle my claim/settlement because he was much more experienced in what amount was reasonable and had existing relationships with the insurance company claims reps.

If I were your DH, I would consult with an attorney to determine the statute of limitations (the cut off for filing a law suit) and to obtain guidance on the value of a potential claim. Here, initial consultations are free and there is no obligation to sighn up. It would also be wise to get a second opinion. If it is a low value claim, at least you will have insight as to the how much is reasonable. Definitely get recommendations for an attorney (preferably a lawyer's lawyer if you know any attorneys). You can also search Martindale Hubbell for attorneys who are AV rated and specialize in personal injury.

thanks, you addressed my exact concerns.

is there a way for us to determine what is a reasonable amount? if it ends up being straight forward / a minor claim, and we don't need a lawyer, I want to know what is a fair number for us to try to negotiate for. we aren't trying to get the most possible, we just don't want to be taken advantage of (which is how we felt when we were first contacted by the ins. co.).