Car crash settlement: not a lottery

Every person who has been injured in a car crash wants to get better. Is that really true?

What about the big settlement? What about winning that settlement “lottery” that will lower the mortgage on your home and give you a head start on retirement? The settlement “lottery” is a fallacy.

A car crash settlement is compensation for real loss— not imagined loss. And not only does the loss have to be real, it has to be loss that is proven to a very sophisticated insurance company.

It has to be a real loss that has been proven with reference to binders full of documents, including income tax returns, clinical records, and receipts. Even if your real loss is provable, it is typical that the actual settlement ends up being something less than the real loss.

There is usually something about the case that is potentially problematic— something that results in a risk a judge or jury will not believe the full extent of your loss.

Perhaps your doctor didn’t write down your lower back pain complaints until six months after the crash. You know the lower back problems started within days of the crash and you didn’t mention it to your doctor until six months later because the pounding headaches and multiple fractures to the left leg were more serious concerns for you.

The insurance company knows, however, that there is a chance a jury can be convinced the doctor’s notes are the only evidence that should be considered and the lower back pain shouldn’t be blamed on the crash.

The role of the insurance company in a trial is an easy one. All its lawyer has to do is pick, pick, pick at your claim and make suggestive comments that play into the unfair public perception of car crash claimants. If any of the picking sticks, then the crash victim ends up with less than fair compensation.

The risk of an unfair result at trial influences what a crash victim will accept as a settlement. The higher the risk, the more of a discount from fair compensation a crash victim might accept.

Then there’s the biggest discount of your claim. You will not actually receive the settlement amount, as discounted as it might be.

You hired a lawyer because you learned that failure to do so translates into a settlement that will not even make it into the ballpark of fairness. And the lawyer needs to be paid.

It’s not an easy job going up against an insurance company. Up to one-third of your claim will go to the lawyer— and that’s not one-third of the settlement “lottery” win.

That’s one-third of your actual losses, discounted to the extent of the risk a judge or jury won’t believe the full extent of your loss. So, let’s say the settlement is 90 per cent of your actual loss and your lawyer is paid one-third of that. You would end up pocketing just 60 per cent of your actual loss.

If you ever think a car crash victim is a lucky lottery winner, think again. And, if you think the moral of this column is that you should handle your case without a lawyer, have a look at the past columns I’ve written that deal with that issue head-on.

The bottom line is that instead of ending up with 60 per cent of your loss, you are more likely to end up with about 10 per cent if you don’t have lawyer. Everyone who has been in a crash wants to get better.

It’s not about the money. It’s about the fact that pain is not fun. It’s also about the fact no amount of money can ever adequately compensate for a lifetime of pain.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.