Dear Dr. Per Cap: I was in a car accident a few days ago while riding in my friend’s car. We were shopping in Albuquerque and some guy ran a stop sign and plowed into us. This morning I got a call from a lawyer who told me not to settle with the other driver’s insurance. He said I should let him represent me because the insurance company will pay out a lot more money for my injuries than if I try to settle on my own. Should I hire the attorney? This is all super confusing so I’m thinking it might make sense.
Signed, T-Boned in Tohatchi
Dear T-Bone
Straight up….how badly hurt are you? Be honest with yourself because your physical wellbeing is by far the most important issue. If you’re seriously injured like broken bones, cuts, and lost mobility you need quality medical care that might be costly. Hopefully this isn’t the case, but if so and depending on the responsiveness of the other party’s insurance company legal representation might be a smart option.
However, if it’s just some small scrapes and light bruising, it doesn’t make sense to hire an attorney and here’s why. Personal injury and accident attorneys are notorious for cold calling auto accident victims. They frequently check local police incident logs which are public record and find victim’s names. It’s considered unethical and in some states illegal for an attorney to solicit like this but it happens all the time. An ambulance chaser once tracked my cousin down on Facebook!
This attorney wants to handle your claim because he’ll get a cut off the top, usually a third. Here’s an example. A person gets in a little fender bender and winds up with some soreness and stiffness in her neck and shoulders. Nothing too serious but she gets checked out by a doctor, maybe visits a physical therapist, and gets a couple of massages. All told her medical related bills add up to $1,000. Most insurance companies will offer three times this amount or $3,000 to compensate for pain and suffering in addition to paying all the medical bills. Now remember this only covers bodily injury. Insurance claims for property damage to vehicles are a separate matter which I won’t get into here.
If a person hires an attorney his cut will be $1,000 in the example above which only leaves the claimant with $2,000. So why bother with a lawyer to put less money in your pocket? Well the attorney will probably negotiate a bigger settlement than $3,000 by encouraging his client to rack up more medical bills than $1,000. Maybe even recommend doctors who will over treat the client’s injuries with lots of appointments and visits. The medical bills will keep climbing until they reach a number the attorney decides to settle at. At this point because a person now has a lot more bills than if she had settled quickly she might receive a bigger insurance settlement, but don’t forget the attorney will still take a third. In the end she might not come out that much more ahead by hiring an attorney than if she settled on her own. Moreover, who wants to spend all kinds of hours in a doctor’s office unless a person is really hurt?
Another thing to be cautious about is that your goal of settling an insurance claim should not be to profit. In fact it’s illegal to profit from an insurance company. The law says you are entitled to fair and reasonable compensation for your pain and suffering, no more no less. So don’t try to scam the system. It’s really not cool and we all end up ultimately paying the price for bogus and inflated claims with higher insurance premiums down the road. In summary it’s your call on the attorney based on the reasoning above. I vote for a fair settlement with fewer hassles if possible. And watch out for those crazy drivers in Albuquerque!
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