Auto Accident Settlement Offers: When Is It Enough?

After a serious auto accident, you may be eager to receive your benefits and move on with your life. That can make any auto accident settlement offer appealing. But how do you know whether the offer is fair? When is it enough?

Auto Insurance Companies Often Want You to Settle Too Soon

After a car crash, many Michigan motorists receive an early auto accident settlement offer from their no-fault insurance companies. This early promise of a quick pay out may be appropriate if your injuries were relatively minor, or straightforward. However, many forms of accident-related injuries do not fully manifest right away. Anything from whiplash to a minor concussion can develop into serious back pain or a brain injury over the next few weeks or months. If you settle too soon, you may not even know about these injuries, or the cost of treatment they will require.

Ordinarily this would not be a problem. You could simply file a new claim for no-fault benefits once the additional medical expenses were incurred. However, these early auto accident settlement offers usually have language written into the small print that will interfere with those claims. When an injured motorists signs one of these settlement agreements, they are promising that the money received satisfies all their claims for injuries related to that auto accident. When further complications arise, you won't be able to collect additional no-fault benefits.

How to Determine if an Auto Accident Settlement Offer is Enough

Instead of jumping to a quick decision about an auto accident settlement offer, take the time to be sure the amount you accept will be enough to cover your medical expenses. The Michigan No-Fault Act requires an auto insurance provider to pay for:

  • Doctor and hospital bills
  • Rehabilitative therapy and other ongoing treatments
  • Medical equipment and accessibility modifications like hand rails or ramps
  • Attendant care, whether by skilled nursing professionals or unskilled relatives and friends
  • Up to 3 years of lost wages (at 85% of your regular wages or salary)
  • Up to 3 years of reasonably incurred replacement services including child care, landscape maintenance, or household cleaning

Depending on your auto insurance provider's conduct, you may also be entitled to interest or attorney fees. To determine if an auto accident settlement offer is enough, consider whether it will cover all of those expenses. Keep in mind that your attorney's contingency fee agreement will be paid out of the settlement, as well, so that may increase the amount you need to cover your expenses. However, your personal injury attorneys may be able to negotiate with your medical providers so they will accept less than their full bill and put more of any settlement payout in your pockets.

What Is Case Evaluation, and How Does It Affect Settlement?

Michigan auto-accident cases often involve alternative dispute resolution efforts to allow the parties to settle. This could include mediation, arbitration, and informal negotiations. In addition, every Michigan personal injury case is sent to case evaluation.

In case evaluation, a panel of three attorneys will review summaries of your case submitted by your attorney and the auto insurance attorney. These summaries can include reports from doctors and expert witnesses, as well as other evidence connected to your claim. The panel then sets a figure that it believes would fairly resolve the case. It is always lower than you requested in your complaint, and usually higher than the auto insurer wants to pay. Each side has the ability to accept or reject the case evaluation award, but doing so has risks.

If you reject the case evaluation auto accident settlement offer, you must do at least 10% better at trial. If you don't, you will be required to pay all the other side's attorney fees from the case evaluation forward. This works both ways. If the insurance company rejects the offer, it could be required to pay your attorney fees if you win at trial. Because of this, many personal injury cases settle after case evaluation. Rather than run the risk of attorney fees, the parties will crunch the numbers and accept the award, even if it is less than they might have liked.

Settlement in Third Party Auto Accident Cases

When a severe auto accident causes death, disfigurement or a serious impairment of bodily function, your personal injury attorney may file two lawsuit: the no-fault case discussed above and a Third Party lawsuit for non-economic damages against the at-fault driver. In the Third Party case, you can be compensated for pain and suffering, long-term wage loss and replacement services, and other damages not covered by your no-fault benefits.

Determining how much is enough for a Third Party Auto Accident Settlement Offer can be harder than in a First Party case. Non-economic damages often depend on actuary calculations of how long you are likely to live. Pain and suffering awards can often seem even more nebulous.

In addition to no-fault auto insurance, Michigan drivers are required to carry liability insurance. Unlike no-fault, however, these policies have a limit to how much they will pay per person, and per incident. Often, settlement offers in Third Party cases are closely connected to these policy limits. You and your auto accident attorney should meet to consider how much is enough and how that may compare to the insurance available to cover any damages, so that you can be prepared to respond to any settlement offers.

At Sachs Waldman, we have extensive experience helping auto accident victims recover damages from no-fault insurance providers and at-fault drivers. We will assess your case and discuss your needs, so you know whether to accept any auto accident settlement offers you may receive. Contact our Detroit personal injury law office at 1-800-638-6722.

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