Misunderstandings Related to Motor Vehicle Accidents and Settlements

In speaking regularly with personal injury clients, it’s clear that there are a lot of misunderstandings surrounding motor vehicle accidents & insurance settlements. We’re going to address some of the common misconceptions in a series of upcoming blog posts to help everyone understand the process a bit better and to help set appropriate expectations. Follow along for the first post in our multi-part series…

MISUNDERSTANDING #1: The insurance company should pay me whatever I want because they have hundreds of millions of dollars.

While it’s true that insurance companies have large amounts of money in reserve, they do not pay out large sums on claims just because they have the ability to do so.

MISUNDERSTANDING #2: If I make a claim on my auto insurance, my rates will go up.

It is actually against the law for an insurance company to raise your premium as a result of making a claim on your insurance. The insurance company may take away your “good driver” discount if you get into an accident, but they will not raise your rates for making a claim itself.

MISUNDERSTANDING #3: When I settle my auto insurance claim, the entire settlement amount will go to me & the insurance company will pay for my medical & legal bills separately.

When settling a claim against another driver’s insurance company, the settlement proceeds will typically be dispursed once treatment for the accident has been completed. Usually, the settlement is paid in one lump sum, inclusive of all medical bills and damages.

It is important to note, however, that all medical expenses and legal fees will be paid out of the settlement first. Once paid, the remaining proceeds will go directly to you. This is especially important to understand if you’re accepting a settlement offer from an insurance company without a qualified attorney representing you.