Insurance settlement: What should I do?

[Jack K]

Here's one for you...

The details: Some months ago as I was stopped at a stop sign my car was rear-ended. I felt a shot of pain in my back and neck, but was well enough to pull over, walk around, examine my car for damage (there was none), and take care of business with the driver who hit me and the officer who responded. I was still in enough pain that afterwards I drove myself to a doctor to be checked out. I was prescribed muscle relaxant pills but otherwise pronounced okay. My back kept aching for a day or so, but then the pain went away and I've had no lingering effects that I can tell.

The aftermath: Some days later the other driver's insurance company contacted me. I submitted my bills for the doctors and the meds, totalling $224. They sent me a settlement letter to sign, and told me they were giving me an extra $250, raising the total settlement amount to $474.

The puzzle: Here's what I got to thinking: The insurance company's interest is in getting me to sign the settlement thus ending their liability. That's why they offered an extra $250. But chances are, that extra $250 will come out of the pocket of the guy who hit me, not the insurance company, assuming his deductible is at least $500. And he has no say in the matter. Policies routinely state that the insurance company gets to settle all claims as they see fit. So they offerred me $250 of his money because they don't care about him, they just want a settlement. I don't know this for a fact, though. I just suspect it.

The dilemma: I don't really know the guy who hit me and don't care to contact him, though it's a small town and we do have some common aquaintances. The guy was mostly pleasant after the accident but did get me a little irked by suggesting to the officer that (1) I might be faking my injury and (2) getting rear-ended might have been my fault for actually coming to a complete stop at the stop sign. So whatever happens, he's got it coming to him. Still, I suspect he needs the money involved much more than I do.

What should I do?

 

[Zenas]

Tear up the letter, lawyer up, and get you some serious money.

/kidding

 

[Andres]

I think you should sign the settlement. If your conscience really bothers you though, could you ask the insurance to change the settlement to just the first amount of the $224 before you sign, but I don't think that's neccessary.

 

[Kim G]

I'm not sure what you should do in your case, but you might want to keep in mind that you may need that money for injury-related doctor's visits in the future.

I was rear-ended at a stop light three years ago. My upper-back was out of alignment and I spent over $1000 at a chiropractor's office until it would stay consistently in place. When I was pregnant with my son last year, my back started popping out in the same place and I was able to use some of the extra settlement money to take care of the problem. When I am uptight or work too much, my back still hurts (in fact, it's out of alignment right now). I'm thankful for the extra money I still have in savings.

 

[Phil D.]

DO NOT SIGN the settlement without an explicit rider that assures the insurance company will still be liable for any and all future treatments that may be necessary (if, of course, they are medically determined to be related to this incident). I would strongly suggest seeking the counsel of an injury attorney, who will at leas be able to provide you with an appropriate form for this kind of thing. Also, insist that the insurance company cover any proactive lawyer expenses like this that you incur upfront. I have personally been privy to too many injury cases where people had serious regrets for taking the insurance company's "generous" initial settlement.

 

[travstar]

Policies routinely state that the insurance company gets to settle all claims as they see fit.

This is correct, and he signed said policy. This isn't some third party mediator. "[T]hey" aren't trying to settle by adding "$250 of his money...." He signed a policy assuming full knowledge of their settlement say-so.

Also, an insurance company offering $250 more in order to reach a quick settlement is, more often than not, in the best interest of the client. If you privately settle with him, he has no protection you won't come for more later if the back pain flares up and you require further medical attention as a result of the accident. If it's like any other settlement agreement I've read, it does legally protect him from future claims arising from the incident.

 

[Dwimble]

...But chances are, that extra $250 will come out of the pocket of the guy who hit me, not the insurance company, assuming his deductible is at least $500.

I don't think that the way it works. The liability portion of his policy is what is taking care of your settlement. There is no deductible on that...at least none that I've ever seen. He won't be paying anything. His premium may go up, but that might happen anyway regardless of the settlement, because of the claim and wreck that was his fault. If he were having to repair his own car, that's when his deductible would kick in and he'd have to pay a portion of it.

But maybe things work differently in your state or with some policies. I've just never heard of it being done that way.

 

[Romans922]

I would say that what needs to be done is you get 224$ from the insurance company and not sign the settlement. You may have future chiropractic injuries from this accident that needs to be covered.

I don't know how you go about doing this though...

 

[Zenas]

If you sign the settlement and in a year have to have back surgery because a disc has slipped in your back, you will not be able to recover that money because you already signed your rights away.

Candidly, the insurance company is trying to get you to sign away any liability they might have as quickly as possible, ergo the $250 which is a pittance. You're not due that extra $250, yet, and you may never be. However, that's an insult of an inducement to settle.

 

[Jack K]

Thanks to all of you.

Here's the thing. This accident happened back in March. My pain was gone in a day and has not returned. I don't believe I've been seriously injured, and if back/neck pain of some sort were to flair up I can't imagine ever being able to argue successfully that it was connected to the accident. I really don't think it would be. I mean, I'm getting older and in the past I've hurt my back worse by moving furniture, playing with the kids, etc. So say some back pain flairs up. Who's to say it was due to the accident and not something else?

So I appreciate the concern for potential future flair-ups. But it feels exploitive if I were to try to take advantage of this accident by blaming all future back problems on it. Still, this leaves me with other questions:

- Would it be appropriate kindness to the other driver to settle, or even to do so without accepting the additional $250 even though my agreement to settle and my brief pain and suffering are probably worth at least that much?

- Am I interpreting the insurance company's actions (that they're bargaining with his money) correctly?

- Does it really make any difference whether the insurance company is bargaining with his money or theirs? Shouldn't my approach be just as non-greedy regardless?

 

[LawrenceU]

Jack, I know that you are trying to be fair in this and I appreciate that. It is rare in insurance issues. But, do not whatever you do sign a settlement with them that frees them from future obligations to you. The recent bought of pain, misery, and surgery that Molly underwent, from which she is still recovering is most likely from an automobile accident 17 years ago. She felt fine within days of the incident and really never thought about it again. It is the only explanation for the damage that she evidenced in the MRI's. Spinal damage can cause things to happen many years later and they can be very expensive. I wish we had not settled. It was a mistake. I had folks counsel us to not do so, but we figured that she had been doing fine and we wanted the aggravation to go away. Plus, we go a nice little check. Big mistake.

 

[Dwimble]

Ah, that was quite awhile ago. If the other driver's insurance rate was going to increase, it has done so already due to the accident alone, regardless of any claim. He will pay nothing additional specific to this claim, because it was a liability claim. You accepting the settlement shouldn't affect him one way or the other. I imagine from his perspective this minor issue is all but forgotten. Clearly you aren't being greedy, and in my opinion accepting the claim that they offered of their own choice is perfectly fine. It's not like you are seeking additional from them or threatening action against them. Also, I don't think that additional money is excessive or anything out of the ordinary. I'd consider it compensation for the inconvenience of having to deal with the pain, having to go the doctor, time that you had to spend dealing with it instead of taking care of other business, and so on.

In my opinion you should enjoy the $250 and consider it a blessing. Maybe donate it an orphanage, a water-well fund, or something else that would seem right and good to you. I respect your desire to do right by the man who was at fault, and I think you have done that. Sometimes it is much harder to receive money than give it, but in this case I think it is him and the company doing right by you. I think you should receive it with thankfulness.

 

[Rich Koster]

I would have a MRI of my neck/spine before signing anything.