A car accident settlement is compensation that an insurance company pays an injured victim due to negligence. This settlement helps the injured persons to make up for the economic and non-economic losses incurred from the accident.
“Getting compensated for injuries suffered in a car accident due to another’s negligence can provide a form of closure to the accident victim,” says attorney Nicholas Stamatis of Price Benowitz Accident Injury Lawyers, LLP. When an accident victim files for compensation claims, the insurance company does not just hand over the claim amount to them. The insurer carries out investigations that may last for months before the victim can get their settlement.
At other times, the victim may have to file a personal injury lawsuit which may take some time before it is resolved. While waiting for the settlement to be paid, the injured person must cover other expenses like upkeep and medical bills.
What Financial Options Can Accident Victims Access?
Many financial options are available to car accident victims before receiving their car accident settlement. These financial options include:
#1. Health Insurance
After an accident, the victim would have to seek immediate medical attention to avoid complications. The expenses incurred can be paid off using the victim’s health insurance policy after negotiating with the insurance providers. Once the car accident settlement is paid, the insured can pay back their health insurance carriers.
It is possible to receive a portion of the car accident settlement immediately to cover specific medical emergencies like purchasing over-the-counter drugs and ambulance costs. However, this is dependent on the type of injury sustained. Also, depending on the health insurance policy coverage, the injured may qualify for some financial relief and can offset their medical expenses using their insurance claim.
#2. Loans
You can apply for loans if you urgently need money to take care of recurring expenses pending when the insurance company pays your settlement. Many banks and other credit institutions offer loans to individuals with pending car accident settlement negotiations.
Some loans are typically tied to the settlement amount and are paid back only if the injured is awarded the settlement. However, many of these loans require the borrower to pay a monthly service fee, which can be very high when added up. Also, these loans can land the injured in a debt cycle if the settlement awarded is below the expected amount and not enough to cover the loan.
Some loan companies are predators and have used such loans to attract unsuspectingly people who end up spending all their settlement amount repaying such loans. Therefore, before signing any pre-settlement loan agreement, ensure you get expert advice from your attorney or a financial advisor.
#3. Medical Lien
This is another financial option available for car accident victims waiting for their settlement to pay for their medical bills. A medical lien is a legal document that bestows the holder with the legal right to recover the cost of treatment once the injured receive their settlement. The injured can sign a lien that would make it possible to receive treatment pending when they receive the car accident settlement.
#4. Charitable Foundations
The waiting period before getting a car accident settlement is challenging for most victims. However, no one says you have to bear the burden alone without finding a viable alternative to keep afloat financially.
There are so many charitable foundations that well-meaning individuals have set up to help people going through tough financial situations. One can get some assistance that will help to cushion the financial stress of the period pending when the insurance company pays the settlement amount.
You may need to speak with a personal injury lawyer. Your lawyer should know many of these charitable organizations and can direct you on how best to get assistance from them.
#5. Letter of Protection(LOP)
A letter of protection comes in handy when the injured does not have active medical insurance, or the health insurance benefit is insufficient to cover the medical bills. A letter of protection as a legal document is issued to the healthcare provider by the victim’s attorney.
This letter guarantees the payment of all medical bills incurred at a later date when the car accident settlement is paid. Upon accepting the payment condition specified in the letter of protection, the healthcare provider will postpone the payment of the bill pending the settlement payment.
#6. Social Security Benefits
This financial option is not available to everyone but is specifically for people whose accidents left them with a permanent disability. The social security disability benefit is a government program set up specifically to help individuals with severe disabilities who cannot earn a living by working actively. The benefits paid by this program are typically small but usually enough to cover the beneficiary’s living expenses.
According to reports, 70 percent of social security benefit applications are turned down. Before applying, it is advisable to speak with your attorney and get their opinion on what to do to ensure the success of your application.
#7. Declaration of Bankruptcy
This financial option is only advisable in extreme cases of financial incapability and where every other option fails. Declaration of bankruptcy is not a light matter. Accident victims should therefore take adequate time to consider it.
The reason is that a bankruptcy declaration will appear on your credit report for seven years, lower your credit score, and hinder your chances of getting funding or accessing certain opportunities in the future. Before filing for bankruptcy, ensure you seek the opinion of your attorney.
Bottom Line
Many of the financial decisions you may take while waiting for your car accident settlement have long-term implications. It is advisable not to make decisions hastily but to think them through and seek expert opinion. Working with a qualified and experienced personal injury lawyer can help resolve your car accident settlement payment faster and save you the stress of worrying about finances.
