An auto accident is an unfortunate and traumatic event. Many people are unsure of what to do and who to speak to when they have been in an auto accident. Unfortunately, many gravitate to the first name they see on an advertisement as a first contact. This can be a very big mistake in many cases for many reasons.
First and foremost, if you are injured seek care as soon as possible after the accident. A delay in care can be viewed as you not truly being injured by the insurance company. More importantly, undiagnosed injuries can be life threatening. Your health comes first!
Secondly, picking an attorney name off the internet or from an advertisement is hit or miss at best. Law offices spend thousands if not millions of dollars on advertising just to get your attention. The money for this advertising comes from past clients like you! Some attorneys will charge 40% of gross settlement. Some will drop your case if a specific amount of property damage hasn’t been met. Do you know which attorneys do this? At our auto injury treatment office we know which attorneys are likely to: drop clients for low property damage, charge excessive fees, or not return phone calls.
Notice it’s mentioned above that some attorneys take from “Gross” settlement. This is in contrast to “net” settlement. Here’s an example:
$10,000 settlement with $4,000 in medical bills:
Math with GROSS settlement:
Attorney gets $4000
Medical bills are $4000
Client gets $2000
Compared to math with NET settlement:
Medical bills are $4000 that leaves a “Net” of $6000.
Attorney who takes a “net” settlement will get $2,400 and
the client will get $3600!!
Notice with the example above the difference between signing with an attorney who takes Net vs Gross is the difference between the client getting more money and the attorney getting more money! Who was injured? Who should get more money?
But, wait! There’s more! In the above case scenario the medical bills are being paid out of the settlement. What if the client has Medpay (Medical payments) on their auto accident policy? Let’s assume the client has $5,000 medpay coverage so all the medical bills are paid for.
With Medpay coverage settlement amount the math is as follows:
$4,000 to attorney
$6,000 to client
It stays the same whether the attorney takes their fees from the gross or net settlement.
That leads us to discuss another attorney trick! When your medical provider charges your medpay they do not bill for filing the medpay with insurance. Some attorneys will advise their clients to let them file the medpay on the clients behalf. The attorney then charges the client hundreds of dollars to file for services provided by a doctor that would have filed the same claim for FREE! In some cases, the attorney will have the insurance company pay the fees to them and count it toward the settlement (monies collected)! In that scenario the math can be present as:
$10,000 settlement with $400 medical bills
$4,000 medpay collected
Total of $14,000 recovered x 40%= $5,600 to attorney
leaving $4,400 to client (as medpay was paid but attorney fee was
based on recovered funds).
Tricky math but, it results in more money to the attorney than if medpay had been billed for and paid directly to the medical provider! In addition, if the attorney charged $500 to bill the medpay, the attorney would get $6100 and the client would get $3900! Again, who was injured? Who should get more money?
So how does one go about negotiating the “money side” of an auto injury case? Here is a summary of items to help you:
- • Your health comes first. Always seek medical care if you are injured
- • Have Medpay on your auto policy. It’s illegal for your premiums to be raised for using it. A good amount to have is at least the cost of your health insurance deductible. Medpay can only save you money.
- • Don’t fall for the attorney advertisements. Find a medical provider that treats auto injuries and can refer you to an attorney.
- • Don’t let you attorney charge you to file your medpay!
- • Don’t let you attorney dictate the type of care you need. You can be “pain free without pills”TM. Some attorneys like to see prescription (opiate medications) prescribed as it helps the “value of your case”. This is often done with little or no regard to the patient’s health or the potential for addiction/dependence that comes with prescribing such medications.
- • Agree to attorneys taking “net” settlements (getting paid after your medical and other bills have been paid) rather than gross settlements.
- • Be cautious of big name law firms with large advertising budgets. The money for those advertisements came from other people’s injuries. If your accident isn’t catastrophic your case can get lost in the “big machinery” of a larger law firm
- • Beware of law firms where you speak only to paralegals or phone calls don’t get returned promptly.
There is also the question of: Do you really need an attorney? That’s a difficult question to answer. Many people will cite data that using an attorney results in larger settlements. However, when one takes into account the fees attorneys take from the settlement, the math of using an attorney may not be to the client’s advantage in a “smaller case”. If the medical bills are paid for and the insurance company offers a “fair” amount, why share 33-40% with an attorney?