June 12, 2010 (Original publish date) • By Dennis Beaver
Last week, we told you about a reader whose brother-in-law was killed in a roll-over auto accident caused by a friend from work who apparently fell asleep at the wheel. There is $500,000 of insurance available to pay the widow, (Sarah) yet, she is interviewing lawyers who want to handle the case on a percentage basis.
My reader believes there is neither need nor justification to give a lawyer up to one half of that $500,000. He’s absolutely correct!
There is a way to obtain expert legal help and save thousands of dollars. In many cases it is even possible to get the insurance company for the responsible party to provide and pay for an attorney.
Sacred cow to lawyers – attorney fees
And, according to “Jeff,” a colleague of mine with more than 20 years of experience in insurance defense, my reader is “absolutely right in thinking that Sarah can get through this without losing up to $200,000 to an attorney who would spend very little time on the case.”
“The sacred cow among most lawyers is attorney fees,” Jeff commented.
“One of our dirty little secrets, is how some personal injury attorneys can be so incredibly overpaid for their value to society, for what they bring to their clients; more accurately stated, what they take from their clients. In most cases of serious injury or death, where fault is clear, hiring a lawyer on a contingent fee, is rarely necessary. There is a better way,” he argues.
Work with the insurance adjuster
In cases of serious injury or death, you need to learn the limits of available insurance. If, for some odd reason, the other side will not reveal that information, it is still easily obtainable, but will require hiring an attorney but not on a percentage basis! Through filing of a lawsuit and what we call “discovery,” that information can be promptly learned.
“For less than five hours of billable time, the policy limit can be obtained. Then, the attorney can work out the settlement specifics with the insurance adjuster. When they are willing to pay out most or the entire policy, it is a simple matter of deciding how much money goes to mom, and how much is dedicated for the children,” he points out.
“We are still in the billable hour area, and there is no reason at all to give up from 25 percent to 50 percent of the case value to a lawyer,” Jeff firmly maintains.
“The insurance adjuster can have their own attorneys work with family members on the specifics of a settlement, including obtaining court approval where children are involved.”
Who gets what?
“Courts want to be sure that children are protected. With our $500,000 policy limits, if mom wants two-thirds, most courts would approve that. She lost the breadwinner and is now responsible for the family,” Jeff reasons.
Where there are children, the funds should be in what we call a structured settlement. This is an insurance annuity, purchased from a highly rated life company. There are numbers of structured settlement companies throughout the country who work with individuals, private attorneys and insurance company lawyers.
With a very young child, $200,000 placed into a structure will allow for payments to cover college, professional school and across a lifetime. These are powerful financial devices, and can literally pay out several times the amount of the money placed into them.
You can provide for a certain amount during college years, and then every five years thereafter, or however you want to set it up.
Other sources of money
One easily overlooked source of additional funds in policy limit payment cases would be the Underinsured portion of the victim’s own auto insurance policy.
Here is how it works: You settle your auto accident case for the policy limits of the party at fault, we’ll say, $100,000. But your own auto insurance has an uninsured/underinsured limit of $150,000. You may make a claim against your own insurance for the difference between what the other side paid you. If your injuries are significant, that difference should be paid.
It is less confusing than it sounds.
Guidance from an attorney
“In your reader’s situation, he should consider retaining an experienced personal injury lawyer for his sister at that lawyer’s usual hourly rate, just to be sure that everything is being handled correctly. There is no reason on God’s green earth to literally make some lawyer wealthy at this family’s expense,” Jeff concluded.
Those were terrific words to hear … from a lawyer!
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.