Attorney Jim Desmond

Experience the Desmond Difference

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Category: Car Wrecks

A Huge Mistake To Avoid in Settling a Personal Injury Claim

I signed up a client recently that was hit by a car while riding a motor scooter. After we met and I began to represent him as his lawyer, he solicited a personal injury settlement from the insurance carrier for the at-fault driver. He did not inform me of this and it escapes me as to why he bothered to meet with an attorney at all. Nevertheless, while the insurance company should not have discussed any part of his injury claim with him since he had legal representation, they claimed that they had not yet received my letter of representation and that my client had told them he did not sign any contracts with any lawyers.

Even though I think I could have voided any personal injury settlement that was arguably reached, my client instructed me not to interfere and informed me that he wanted to proceed with the settlement of his personal injury claim, despite my legal advice to the contrary. As a result, I withdrew from the case and allowed the client to resolve his injury claim as however he saw fit. However, he made a big mistake on a key issue that I want to make you aware of.

Except for the medical bills paid by a Kentucky no-fault carrier, the vast majority of personal injury settlements are inclusive of the medical expenses or any liens that stem from the payment of those medical bills. In other words, when you settle a personal injury claim from a car wreck in Kentucky or Indiana, that personal injury settlement will include every lien or medical bill except for those paid by a Kentucky no-fault carrier.

In this case, the injured victim was on a scooter that because of the size of its engine, qualified as a motorcycle. In Kentucky, motorcycle riders do not generally qualify for no-fault insurance unless they have purchased optional no-fault coverage. So the client’s own health insurance would be responsible for his medical bills. (Recall that the insurance carrier for the at-fault driver typically own pays an injured person’s medical expenses when the entire personal injury claim is settled; not as the injured party incurs the medical expenses.) Thereafter, my former client’s health insurance carrier could assert a subrogation claim against any personal injury settlement that was recovered for the medical bills they paid on the client’s behalf.

Essentially a subrogation claim by a health insurance carrier says that they legally stand in your shoes in regard to the medical bills they have paid on your behalf. So if you recover the medical bills from the at-fault party, the health insurance carrier has the right to recover the amounts they have paid from your personal injury settlement or you. Since the settlement of the former client was inclusive of all medical bills and liens, the client’s own health insurance carrier now has the right to sue him, their own insured, to recover the amounts they have paid on his behalf. In addition, some health insurance plans would give the insurance carrier the additional right to deny payment of future health insurance benefits to the extent that their subrogation rights were impaired.

In essence, the former client not only settled his injury claim too soon and for less than it was worth but also, the amount recovered in that settlement may not be taken away by the health insurance carrier to satisfy their subrogation claim. Very simply, don’t rush a personal injury settlement. The only one that benefits from rushing a personal injury claim is the insurance carrier.

Should you settle a personal injury claim immediately after a car wreck?

Hmm? Good question.   Nine of ten times I have to tell a client “No!”  Today, to my own surprise, I had to suggest to a client that she accept an early settlement of her personal injury claim.

I represented this lady for another car wreck about six months back and she was just involved in a second car wreck over this last weekend.  In short, I did some investigation and all indications were that the at-fault driver was not insured.  As a result, we opened an uninsured motorist claim with my client’s own insurance carrier and a no-fault claim.[1] The problem is that the uninsured motorist coverage would cover only her pain and suffering; it does not cover the damage to her vehicle. [2]

To my surprise, the Uninsured Motorist Carrier made an unsolicited offer on her personal injury claim during out first phone call with us.  Admittedly, it was a good offer. I was not going to charge this client an attorney’s fee on this second wreck because she had been responsible for several other people using my law office. Also, since she did not have collision coverage and the at-fault driver was uninsured, she was without the money to purchase a new vehicle.  Consequently, while it was my client’s decision, I had to admit that I thought she ought to accept the offer from the insurance carrier. However, there were some caveats she needed to be aware of.

First, when she accepted the settlement, her personal injury claim was over and done with. So if she found out that this car wreck injured her back in such a manner that she needed surgery two months from now, she would be unable to recover anything further.  Second, the settlement had to be exclusive of the no-fault benefits. In short, this allowed her to have her medical bills, paid by her own insurance company, up to the $10,000 limit.  Lastly, we made sure to add language to the release that made it clear she could still recover for the damage to her car should the at-fault driver prove to have insurance coverage after all.

Just to be clear, there is not a hard and fast line to knowing when to settle a personal injury claim. Just make sure you know all your legal rights first and that you are comfortable with the fact that it is a “Full and Final” settlement of your legal rights even if your arm falls off tomorrow because of the car wreck.

[1] If the wreck had occurred in Indiana, we would have opened a med-pay claim and an uninsured motorist claim.

[2] In Indiana, uninsured motorist coverage may cover the damage to the vehicle depending upon how the insurance policy is written.

Kentucky Car Wrecks: Having To Use Your Car Insurance to Pay Your Medical Bills

I signed up a mother injured in a car wreck in Louisville, Kentucky last week.  The problem is that the mother was driving a car owned by her daughter.  Consequently, even though the driver/client was not at fault in causing the car wreck, I have to use the daughter’s automobile insurance to pay my client’s medical bills.   This is why they call Kentucky a no-fault state. It does not mean that you can’t make a claim for pain and suffering against the at-fault driver. Rather, it means that the car insurance for the vehicle you are riding in is responsible for the first $10,000 of your medical bills and lost wages, regardless of how the car wreck occurs.  As a result, I have dealt with several phones calls this morning from both the mother and daughter addressing their concern about using their own car insurance when the mother did nothing to cause the wreck.

The idea behind Kentucky no-fault law is that I should not have to prove fault for an automobile accident in order to get the medical treatment I need. As a result, the Kentucky statutes made this kind of coverage automatic.  In essence, when you are involved in a motor vehicle accident in Kentucky whether you were or were not at fault for causing the wreck, you are immediately entitled to $10,000 of medical expense and lost wage coverage.  So when you see attorneys advertise that they can immediately get you $10,000 on your personal injury claim, now you know what they are referring to.  They are misconstruing the law for the purposes of an advertisement.  You don’t get the $10,000 but rather, the insurance carrier has to provide you with medical expense and lost wage coverage up to that amount.

Kentucky law goes on to say that in exchange for that coverage, you give up the right the right to recover the first $10,000 of medical bills and lost wages from the at-fault driver.  That legal right of recovery becomes the right of insurance carrier who is responsible for your medical bills and lost wages.  If you think about it, it only makes sense. If we are going to obligate the no-fault carrier to pay your medical bills, they should have the right to recover any amounts paid.  However, it is for this reason that you do not have a choice but to use your own car insurance to pursue your personal injury claim.

For example, if I submit a personal injury claim on behalf of my client and he has $5,000 worth of medical bills and I want another $6,000 for his pain and suffering claim for a total of $11,000, the insurance company will still only offer me $6,000 at best for my client’s pain and suffering claim.  Why? Because they know that it is not my client’s right to recover the first $10,000 in medical bills but rather, it is the right of the no-fault carrier. They also know that if they paid me the full $11,000 on the claim, Kentucky law would still allow my client to make a no-fault claim for the $5,000 in medical bills.  Then the no-fault carrier would have the right to recover the $5,000 they paid from the at-fault insurance carrier that now would have paid out a total of $16,000 on the claim when they should only have had to pay out $11,000.

I understand that is complicated. In essence, for a Kentucky motor vehicle wreck, the at-fault carrier will not agree to pay the first $10,000 of your medical expenses as part of your pain and suffering claim because of the risk that they might have to pay these bills twice.  Consequently, to not use my client’s no-fault insurance would mean that I could not recover some of the medical bills that compose their personal injury claim. So yes, even though my client did not cause any part of the car wreck, I have to use her own car insurance or I cannot recover fully on her personal injury claim.

A topic for another day is Indiana law in regard to car wrecks and medical bills. In essence, Indiana law does it just the opposite and all medical expenses are considered part of the personal injury settlement.

How to Discuss your Personal Injury Claim with your lawyer.

I had a phone call earlier today from a young man who had been hurt in an automobile accident in Bowling Green, Kentucky.  He already had a personal injury lawyer so I was limited in what information I could tell him.  However, I knew this personal injury lawyer from when I went to law school in Lexington and I knew he had a good reputation among the attorneys in Warren County. Moreover, from the information he was telling me, I could tell that this injury attorney was properly handling the personal injury claim.  Nevertheless, the young man’s phone call was justified as he was not receiving an adequate explanation as to the steps involved in the handling of a personal injury claim.

I get it. Lawyers are busy people who are constantly being pulled in five different directions.   Also, even though my injured clients  can contact me on my phone through texts and calls,  none of us are perfect in keeping our clients informed all the time.  However, you as a consumer and as the injured victim of  a car wreck, have legal rights.

When you hire a personal injury lawyer, you effectively turn the handling of those legal rights over to his/her care.  My point is that every person injured in a car wreck has the right to know the status of their personal injury claim stand and the game plan is for the ultimate resolution of that injury claim.  I don’t care if the car wreck happens in Bowling Green, Louisville or New Albany, Indiana.  All car wrecks share some common elements:

1) Who was at fault for the car wreck and what evidence do we have to prove fault?

2) By whom and how are my medical bills and lost wages going to be paid?

3) How long do I have to present my personal injury claim?

4) Can my personal injury claim be settled without a lawsuit or will I have to prove the other driver was negligent and responsible for my damages?

If you have been involved in a car wreck and whether you are representing yourself or have hired a personal injury lawyer, you need to know the answers to these questions. You are paying a personal injury lawyer the same contingency fee, usually 33.33% of the total amount recovered on your personal injury claim, whether you meet with him 1 time or 100 times.  Why not make sure he has told you what you need to know so you can feel confident as to the handling of the legal claim and concentrate on getting the medical treatment you need.