Risks include giving up all of your legal rights – and leaving money on the table
Here’s the most common scenario: You are involved in an automobile accident. Within a few days you receive a letter, a phone call, or even a knock on your door from the insurance company of the guy or gal who caused the crash. Most people (at least those who haven’t been injured in a car accident before) think they will be treated fairly. The insurance company tells you they would like to settle the matter. The adjuster also tells you that you do not need a lawyer. After some information is exchanged, they make an offer of settlement that ranges from a few hundred to a few thousand dollars.
In exchange, the claims adjuster requires you to sign a full and final release in exchange for the small settlement offer. It’s natural to think that this is “free money” and doing this is in your best interest.
As an attorney, I’m often asked about these situations. Here’s the skinny: you have to be very careful. If you truly are not hurt and have no residual pain or problems, and the other insurance company wants to throw a couple hundred dollars your way, then you probably don’t need to hire an accident lawyer to help you.
What I see the most of, however, is the other side of things, such as insurance adjusters essentially stalking people and trying to throw money at them so they won’t hire a lawyer. When I was President of the American Association for Justice Truck Accident Lawyer Group, I remember a case where an adjuster for a trucking company that had just negligently killed a husband and father attempted to “settle” the case by buying the surviving family members a new Buick.
That case should serve as a warning. The insurance industry estimates that when an attorney becomes involved, the settlement value of any car accident claim increases fourfold. That’s why so many insurance companies essentially stalk accident victims – to prevent them from hiring an experienced personal injury attorney.
These claims adjusters will call you, knock on your door and visit you in the hospital, trying to get you to sign a release and settle your case before you talk to a lawyer – often for what is pennies on the dollar. And because information is one-sided, most people have no idea what their legal rights are or what kind of compensation they are entitled. Plus, at this point so close to the car accident, many people are still in shock, or have yet to fully understand how serious the injuries will become in the days and weeks that follow.
So there may be times when you don’t need a lawyer at all. But you are giving up quite a bit and taking a risk by signing any legal release. A release will extinguish any and all legal rights you have – whether that be for pain and suffering or in non-no fault states for wage loss and medical bills and other claims. Make sure you truly have nothing to lose before settling your case if you are approached by an adjuster and told you don’t need to hire a lawyer.
You need a lawyer for the loopholes
Ever hear that most people can figure out the law, but you need a lawyer for the loopholes? Even a seemingly harmless “limited property damage” release can be very dangerous. Here is a true example from people who contacted our office when a mini-tort property damage release also contained language saying this was a full and final settlement releasing all personal injuries.
Too many people can rush into signing these documents without having the language reviewed by an accident attorney. In fact, it was insurance companies manipulating people and taking advantage of people that has led many states to bar direct contact between claims adjusters from the party that caused the accident with accident victims as the unauthorized practice of law.
Remember, no insurance company ever tries to give away its own money – unless it is in its own interest for doing so.
– Photo courtesy of Creative Commons, by Morgan