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How do Car Accident Settlements Work?

Another common question we get at FVF Law is: How do car accident settlements work? In this episode, Josh and Aaron provide an overview of the car accident settlement process and what variables can change that process.

Listen here or read the transcript below. FVF’s Summary Judgment podcast is available wherever you listen to podcasts including Apple Podcasts, Spotify, iHeart Radio, and more.

Intro: Thank you for tuning into summary judgment where Austin personal injury attorneys Josh Fogelman, and Aaron Von Flatern of FVF Law discuss the ins, outs, and in-betweens of personal injury cases.

Aaron Von Flatern: Okay, this is Aaron Von Flatern and I’m here with my law partner Josh Fogelman and we are talking today about how do car accident settlements work? This is a broad question, but a lot of our clients come to us not really sure of what all their questions are. They know that they have been hurt, and they’ve heard that settlements occur, but they don’t really know what that process is. So, Josh, do you want to just start us off by kindof describing the overview?

Josh Fogelman: Sure, and there’s a lot of places people can go on the internet and find settlement calculators and things of that nature. But I think one of the things that we’ve learned over the course of our careers is every single case is different. And so in order to figure out how your particular car accident settlement is going work or what your case trajectory is going to look like, you have to look at the specific factors involved in your particular case. And some of the main factors… When we’re doing a client intake or evaluating a case, the main factors that we’re looking at are things like how severe are the injuries? Is there an obvious catastrophic injury? Do we have broken bones or hospitalization or surgical intervention, or is it a person that’s having some discomfort in their back and neck? Maybe they’ve sustained a concussion or something of that nature, which can help us sort of… Help discuss with the client what their course of medical treatment is going to look like and how long it’s going to take for us to figure out what the short and long-term consequences of the injury are. So, severity of the injury is a big factor.

Josh Fogelman: We often look to see whether there were any sort of aggravating factors that were involved in causing the incident that resulted in the injury. Some examples of those would be drunk driving, cell phone use. There could be any number of really bad reprehensible behavior that contributed to the accident occurring in the first place. And those types of aggravating factors can have an impact on what path we take towards a resolution and, really, the ultimate case valuation, because there are certain things that we can do with cases that have really egregious facts that we’re not able to do it in less egregious cases. One of the…

Aaron Von Flatern: Yeah, I would say that some of the moving parts I’ve seen that surprise people are we’ve got to get the medical bills. We’ve got to talk to a lot of times their health insurance company and find out how much they’re claiming in reimbursement out of the case. And then a lot of people are surprised to learn that we even have to pay the health insurer back. And of course, we negotiate that. But what are some of the other kind of confusing things about settlements that you’ve seen from new clients?

Josh Fogelman: No, you’re absolutely right, Aaron. How many people have their fingers in the pie is something that many new clients are surprised to learn. You mentioned health insurance companies, you’ve got hospitals that file liens over your case and they can be pretty aggressive with their collection efforts. So if you wanted to simplify sort out how the case works, there’s going after and collecting the money and then there’s figuring out how to deal with all the people who claim to be owed money out of the settlement or out of the recovery. And it takes a lot of people by surprise to learn really how complex it can be to fight back against people who are wrongly trying to get their hands on a recovery that’s designed to compensate a person for a real and serious harm or loss that they have sustained.

Aaron Von Flatern: Yeah. Talk about scaring someone, when the health insurance company… I mean, when the hospital files that lien and it comes to your house and it’s got the State of Texas logo on it, and it obviously appears to be something scary. Talk a little bit about what a lien is and why they’re filed.

Josh Fogelman: Sure. Well, a lien, the best way to think about it is if you were to go and buy a new car, or if you were to go and buy a new house and you had to borrow some of that money in order to pay for the house or to pay for the car, the bank that loaned you the money will have a lien over the house or over the car. So if you don’t make the payments, they’ll come back and they’ll try and take the car or the house back. And a hospital lien kind of works very similarly to that if it’s done properly by the hospital, which oftentimes is not. But when they’re done properly, when you settle a car accident case, or if you go to a jury trial and get a recovery, the hospital is going to have a priority interest in that recovery and if you fail to pay it, they’ll sue you and they can, in some instances, sue your lawyers as well. So really important to get a handle on whether the hospital has done the things that they need to do in order to properly assert that claim. And what we’re finding more and more is hospitals engaging in abusive billing practices in order to really inflate what that lien looks like.

Josh Fogelman: So I would say dealing with liens and dealing with those back end liability issues are a pretty big factor that come into a car accident settlement and actually making it work. But when we’re talking about what a case looks like from the outset, there are some other big items that we have to consider like what do the liability insurance limits look like? How much insurance does the person who hurt you have and similarly, how good a job did you do of protecting yourself from a situation where you might get hurt by someone who doesn’t have enough insurance to pay for all the damage done? And, Aaron, as you know, we talk all the time when we go onto the news and things of that nature, and when we are drafting blogs, we’re talking all the time about things like under-insured motorist coverage.

Aaron Von Flatern: Yeah. Yeah, it’s one of those things that surprises everyone is that when they get in a bad, like a catastrophic accident we are going to pull in coverage from all corners of the earth. We might have short-term disability involved, health insurance involved, people may need to take settlement loans to feed their family. We’ve got to find their uninsured motorist coverage, their PIP coverage, which is another… It’s like they have all these names and all you need to know is that slow down, don’t sign on the dotted line or release anybody without at least getting informed. And that’s kind of where we’re coming from with this. How do settlements work? Well, the answer is, each case is a snowflake, it’s unique and it needs to be analyzed by someone who’s seen it before. Josh is… Do you get the question a lot, Why aren’t they settling with me right away? Like in that first month?

Josh Fogelman: Yeah, I think we get a lot of different questions about insurance conduct very early on. Sometimes insurance companies don’t want to make settlement offers because there’s a question about who actually caused an accident, or they can’t get a hold of their own insured which can open up a whole different type of can of worms. But what we generally advise people is even if an insurance company is coming to you with a settlement offer early on, you should be very skeptical about that and you should take the time to get educated about what your rights and options are before you consider engaging in a negotiation with an insurance company to settle your case before you really understand what your situation is. And oftentimes that can take many, many weeks or months to develop a full understanding about whether or not an injury is going to have any short or long-term consequences, which is what you have to do before you can be in an equal bargaining position with an insurance company.

Aaron Von Flatern: Yeah, so bottom line, I think, and Josh, you’ll agree with this message, everybody just get informed. If you call a lawyer and they sound high pressure, they sound like they’re not going to answer your questions, then move on to the next. Call FVF Law. We set up our law firm to make sure that people could get answers first. The law does not belong to us, we don’t sell it, it’s the people’s and we want people to get those answers when they call us. So call us and thanks again for listening.

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Fogelman & Von Flatern is a personal injury law firm that believes it matters why we practice law: to make sure good people in unfair circumstances who want reasonable options are taken seriously, especially by their attorney. We value transparency, compassion, and justice, and we strive to embody that in our practice. At FVF, you can trust that you've got the best people on your case, for the right reasons.

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