Managing Financial Stress While Waiting for Your Insurance Settlement

Personal injury lawsuits can take years to settle. This translates to years of financial agony, especially if you are incapacitated and can no longer earn a living.

There are medical bills, ongoing household bills, property repair, and other expenses to be paid. Insurance companies know that personal injury victims are at risk of financial stress while waiting for their settlement.

For this reason, they’ll try to present initial offers to get you to sign a release form that bars you from seeking more compensation from their policyholder. In most cases, this offer amount is usually way less than the total damages incurred. Don’t accept a low insurance settlement offer because there are other avenues you can explore to get financial help. Let’s look at each one of these options:

Your Health Insurance Company

Some health policies have additional provisions that cover the client in the event of an injury, regardless of whether they are at fault. If your health insurance coverage has a similar provision, you can file a claim to offset your medical bills.

Alternatively, your health insurance can provide you with compensation on a subrogation basis. This means that your insurer compensates you for all the damages incurred but places a lien on the same. When your lawsuit settles, the insurance company has a right to deduct the amount owed to them.

Talk to your health insurance provider to make an arrangement that can alleviate your financial stress.

Signing a Medical Lien

Medical bills can accrue to thousands of dollars after a personal injury. Sometimes the amount can surpass what your health insurance policy is willing to pay. One of the ways to manage this is by signing a medical lien. 

Here, the hospital or specialist agrees to treat you without immediate payment. They will then place a lien on your settlement amount, allowing them to deduct any amount owed to them when the lawsuit settles. 

This is a safe way to manage financial stress as you wait for your settlement because your health needs are fully taken care of.

Personal Insurance Protection (PIP)

If you’ve ever witnessed or been in a car accident, then you know how much damage the victims can incur. Some car insurance policies offer additional protection to drivers known as PIP. 

Under PIP coverage, your auto insurance compensates you for damages experienced in an accident. This compensation is immediate and does not depend on the assigned fault or liability.

However, your insurer might perform an independent investigation and increase your premiums if you are found to be at fault.

Applying for a Lawsuit Loan

Also known as pre-settlement funding, a lawsuit loan refers to financial help available to individuals waiting for their lawsuit settlement.

Lawsuit funding companies will evaluate your application to determine the value and probability of your case settling. The lender then expects you to pay back the amount, plus interest, once you receive your settlement money.

If you are considering getting a lawsuit loan, consider discussing it with your financial advisor first to determine if it’s the best option for you. Pre-settlement funding can eat into your settlement money if you do not choose wisely.

Advantages

• No obligation to pay back the money should your lawsuit fail to settle 
• It prevents you from caving into the pressure of insurance companies offering you lowball settlement offers

Disadvantages 

• While pre-settlement funding provides financial reprieve, it is also a cost like any other. The lender expects you to pay back this amount plus other additional costs that might make it an expensive affair.
• Not all cases qualify.