When you first learn the amount of your total settlement, you must understand that you will not receive a check for that exact amount of money. Further, the insurance adjuster handling your claim is unlikely to give you a breakdown of their offers during the negotiation process unless asked to do so. They expect that you understand that any offer they make includes money to cover your medical bills and expenses as well as to provide you with compensation for your pain and suffering. Pain and suffering is an arbitrary number that is nearly impossible to calculate, so this amount is usually dependent on your specific insurance adjuster. When you handle a claim on your own without a lawyer, the settlement check will be mailed directly to you. However, this money does not all necessarily belong to you, as some of money from that sum may be damages to which your medical providers or insurance company are entitled.
North Carolina law governs what percentage of your settlement must be used to pay back medical providers and insurance companies that have an interest in your claim. Often, patients will not be able to pay for their medical treatment at the time of treatment and will arrange with the medical provider to pay back the account balance once a settlement is finalized. Basically, this means that if a medical provider follows proper protocol according to the law, they can attach a “lien” to your settlement, ensuring that they are paid back at least partially for services rendered. Insurance companies may also take out a lien against your settlement if they pay for portions of your treatment at the time of service. Read more about the concept of liens and the different types of liens in our North Carolina Liens section.
Typically, about 1/3 of your settlement will be used to pay back medical providers and insurance companies (to satisfy liens), 1/3 will go to attorney’s fees, and 1/3 will go to you, if you engaged a law firm to handle your claim. A 1/3 contingency fee is common for personal injury lawyers in North Carolina, but the attorney’s fee is something that can be negotiated with your lawyer before you sign a retainer agreement. By far the most confusing part of your settlement will involve the concept of liens. This article will give you more details about how liens affect your settlement as well as provide links to other articles that explain this complicated topic.
If you choose to settle your claim quickly without attempting to negotiate with the at-fault insurance company, you may lose out on compensation you deserve for your injuries and treatment related to the accident. Also, if you settle soon after the accident occurs, before you finish treatment for your injuries, your total medical bills in the future may exceed the amount you settle for if you do not wait until you are done with treatment. At Wallace Pierce Law, we typically do not even start creating a demand package to send to the adjuster until we have an itemized copy of every bill from every date of service for treatment related to the accident. By doing this, we ensure that all of your treatment costs are included in the demand. Further, negotiation is an important tool in determining your settlement amount. The insurance adjusters usually start with a very low offer and expect that you or your lawyer will come back with a counter offer. If you simply accept the low offer made early on by the adjuster, you may miss out on the full extent of the compensation to which you are entitled.
The settlement check can be disbursed after all medical provider account balances and liens have been verified. If you have hired an attorney to handle your claim for you, he or she will take care of this verification process. If you are handling the claim on your own, it may depend on the particular adjuster you have been working with as to whether or not liens need to be verified before the settlement check will be issued. However, if the insurance company has received direct notice of a lien, they will pay it. Sometimes medical providers will send a lien straight to the insurance company so that the insurance company will pay the lien balance before disbursing your settlement check. Regardless, we would always recommend that an individual contact all medical providers and verify their balances after their case has settled. You may also attempt to negotiate your liens with the medical providers at this time. Often, facilities will provide substantial reductions to clients through charity care and tax write-offs, so it never hurts to ask for a reduction. To learn more about liens and subrogation negotiations in North Carolina, read here.
If you handle the claim on your own without the help of an attorney, you likely will not be mailed a settlement check until you sign and return the release document sent to you by the insurance adjuster. If you have an attorney handling your case, it can depend on the adjuster as to whether or not a signed release will be required before the settlement check is sent to the law office. Some adjusters will send the settlement check along with the release document to an attorney’s office and expect that the attorney will ensure the client signs and returns the release. See the next section of this article for more information on signing a release of all claims.
Whether you are handling your personal injury claim on your own or have hired a lawyer to handle it on your behalf, you will receive a release document from the insurance adjuster once both parties have agreed upon a settlement amount. A release of all claims releases and acquits the liable person or institution of any further actions related to the accident, once the victim has received settlement funds. Thus, once you receive settlement money from the at-fault insurance company, you sign this document to legally establish that you will not pursue a lawsuit and will accept the settlement sum to cover all damages associated with that accident. See a sample release document here.
It is important to sign a release, as many adjusters will not even send you a settlement check until you sign a release stating that you will not sue or ask for any more compensation after you receive that settlement check. Other adjusters will send the check and the release at the same time. Either way, legally, once you accept funds from the at-fault party for your damages, you must sign the release. As was previously stated, if a lawyer is handling your claim, then the law office will ensure that the release is signed and returned to the insurance adjuster. It is likely that the adjuster will not disburse the settlement check until the release is signed if someone chooses to handle their claim “pro se” (without a lawyer).
Once your settlement check is disbursed, it is your responsibility to pay any balances that are not covered by the liens using the portion of the settlement you actually receive after attorney’s fees and liens are paid. When liens attach to your recovery proceeds, medical providers or insurance companies ensure that they will be paid at least a portion of what they are owed out of your settlement. Whatever is owed after a lien has been paid is still your responsibility, but it is not legally tied to your settlement money. You may be able to talk with the lien holder before your settlement is complete to negotiate a reduction in your account balance for several reasons. Read and learn more about Negotiating Liens in North Carolina.