Settling an Insurance Claim After an Accident – Struggling with Guilt, Doubt and Greed

by Joe Plemon on July 14, 2010

Our normal anxieties in dealing with insurance companies are based on the concern that we won’t be sufficiently compensated.

However, not everyone fits this mold.  This post is based on an email from one of my clients (I will call her Carol) who, because she had been injured in an auto accident, is in the process of hiring an attorney to represent her in dealing with the insurance company. Although she was hospitalized, missed work and could have ongoing medical issues, Carol is struggling with the morality of “going after” the insurance company. Because of the trauma of the accident, she doesn’t clearly remember it, which creates some guilt issues. Carol is also concerned about the possible “greed” mentality many lawyers seem to have.

Here is a clip of her email:

You helped with this when we talked, but I think I’m blanking on it and churning. Will you give me perspective on the accident claim again according to biblical teaching? I’m still struggling with what God really wants of us in this financial circumstance.”

This is my reply to Carol:

I wish I had great biblical passages to share with you about insurance. The best I can come up with is Exodus 21: 12-36, a section of the bible which tells us that those who are harmed should be compensated. The gist of this passage is just that: God expects people to be compensated for harm done to them. This is why you have insurance and why the other person in the accident has insurance. If the other person was harmed, I am sure you would be glad that you had insurance so she could be compensated. Just because the shoe is on the other foot (being you are the one harmed) does not make it any less right that you should be compensated. You are concerned about how this will affect the other person. This is something you have no control over, but she SHOULD be glad that her insurance is going to take good care of you. If she isn’t, that is her problem, not yours.

The issue of how much the claim should be…again, ask yourself, “What if the other person had to go through what I have been through?” Wouldn’t you want her to receive payment for her medical care AND for lost income AND for possible future medical care? Of course you would. It is only right. I agree with your attorney. This is not about greed. It is about an injured person being compensated for the harm done.

Another thought is this: we are commanded in Romans 13:1 to be subject to the governing authorities. I am not sure about Missouri, but I know Illinois requires auto insurance (liability as a minimum). In keeping with the laws of the land and Romans 13:1, you have auto insurance. The very legal system that requires you to have insurance will also have a judge who makes a determination as to the award of the case. As long as you aren’t doing anything un-Godly to tweak the system (which you aren’t), then I would say that God is using that judge to make a proper and fair determination. In reality, the attorneys for the insurance companies might settle out of court, but the point is that God requires insurance, so trust Him to see to the details.

One more thought. You have debt and you have been harmed financially by this accident, meaning you have not been able to work as much physically or emotionally. This is not your fault and you should not feel guilty about what you can’t control. But if you were to somehow sabotage this settlement, you might be turning away money that could go toward those you owe. I know this is a stretch, but allowing the process to play itself out could help some creditors get the money owed to them. I can’t see that is a bad thing. Without the accident, you might have been able to gain enough traction to start making some major payments through your income stream. But the accident DID occur, so you don’t really know what might have happened in your career if it hadn’t. All of this is part of compensating a harmed party (back to Exodus 21).

In the end, I think you should trust the process, trust your attorney (or find one you can trust) and trust God. That is the best way I know to put it in God’s hands. When you do so, you can feel good about the outcome whether it goes very well or very poorly.

I hope this helps.

Joe

Carol’s response:

“I won’t be able to tell you how much it means to have your counsel and how thankful I am….I’m breathing easier today because you took the time to think on this for me. I’m so thankful”

Readers: have you ever struggled with guilt or the feeling of greed when negotiating an insurance settlement? How did you handle it? What would you add or change in my response to Carol?

Creative Commons License photo credit: Chasqui

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{ 11 comments… read them below or add one }

Marc July 14, 2010 at 2:12 pm

My first question is, why is she hiring a lawyer? Her insurance company will have plenty of lawyers to represent her. I was in insurance for years, and it’s usually not a good idea to get your own lawyer, for many reasons.

People often hire a lawyer after an accident because they think that’s the right thing to do. In fact, it’s often the worst thing you can do. The one who usually wins in that case is the lawyer.

Her damages are her damages, and the claimant usually will not get more than what’s fair just to pay the lawyer. The lawyer will just take a percentage of the money she’s going to need for her recovery.

She’s the one who was in the accident, and she needs the money. She shouldn’t be giving a third of it to a lawyer, unless there are some very unusual circumstances in this case.

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joeplemon July 14, 2010 at 3:13 pm

Marc,
You raise a great point, one that I probably can’t answer adequately.

Because Carol was not at fault in this accident, the other driver’s insurance company was liable for damages. Her insurance company has remained aloof and has not offered any legal counsel (I suppose because they have nothing to lose) and the other insurance company has been less than forthcoming.

To sum things up, we have an injured, traumatized woman doing battle on her own against the other party’s insurance company. She thought she needed representation and I agreed. She knows this attorney from a professional level and trusts his integrity.

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Marc July 14, 2010 at 3:53 pm

I’m very sorry to hear that her insurance company has dropped the ball on her. That is inexcusable. Of course she needs someone on her side, fighting for her. She sounds like she is in good hands.

BTW, I think your advice to her is right on the money… heartfelt, comforting, and pragmatic at the same time.

Always trust in God. But don’t ignore the tools he has given us in this world. They are here for our use and our growth.

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Evan July 14, 2010 at 7:55 pm

Good Advice Joe, I would probably be harsher (I guess I always am lol). She entered into a business relationship with her insurance company, if they aren’t holding up their end they should take all legal actions necessary.

The only thing I would add…is to call her State’s insurance department/commission they may be able to help out.

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joeplemon July 14, 2010 at 8:01 pm

Evan,
Thanks for the tip. It is always good to get an attorney’s thoughts. I will pass the suggestion to call the state’s insurance department/commission on to Carol. In fact, I am pretty sure she is reading this.

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Financial bondage July 16, 2010 at 6:26 am

Id like to know what insurance company she has…. if they are not doing what they should be doing, I would be on the internet letting everyone know what company xyz is doing, or not doing… face-book, twitter, blog, etc…

you get into an accident and injured, you have enough to worry about. the last thing you need is an insurance company that refuses to do its job after you pay premiums for years on end.

Legal help requires BIG money… our legal system is like an elite club… those with big bucks can join and have access to it (and get the help they need)… those without big money can’t play. Sad but true. Our legal system is a mess.

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joeplemon July 16, 2010 at 6:57 am

FB,
Here is the thing. I don’t really know if an insurance company is obligated to supply legal counsel to help their customers deal with other insurance companies. If they should be, then this company has definitely dropped the ball. But is supplying such legal counsel something that normal insurance policies cover? Can someone help us out here?

If I find out, I will add a new comment.

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Marc July 16, 2010 at 1:23 pm

joeplemon,
The responsibilities of her insurance company are specified in her contract. It depend on the state she’s in (I’m only licensed in California), the coverage she’s got, and the specifics of the case. She needs to contact her insurance company and talk to an adjuster, and maybe even the DOI for her state.

My concern is this: the damages are the damages. You don’t get more money just because you decide to hire a lawyer (at lease not in California). If that lawyer gets 1/3 of the awarded damages, then you’re out that money. Also, as soon as you contact your own attorney, you are considered to have representation, and your insurance company will usually not talk to you after that.

It’s alway best to pursue other avenues before you hire you own attorney.

Marc

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Greg McFarlane July 16, 2010 at 4:36 pm

Unfortunately, she does need a lawyer. But given that Carol is seeking your advice, she’s clearly not the kind of person who’s going to abuse the system, holding her neck in faux agony and committing to bogus visits to a rehab clinic so she can hit the other driver’s insurer up for more money.
Ideally, her insurer should help her recover her losses. But her agreement with her insurer probably doesn’t require this – thus her need for a lawyer. Better she get 67% of something than 100% of nothing.
And what if the other driver doesn’t carry enough insurance? Then she’ll have to sue her own insurer? So yeah, she definitely needs a lawyer.

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joeplemon July 17, 2010 at 7:29 am

@Marc,
Thanks for the info. After your first comment, I asked Carol about her insurance company’s responsibility to supply legal counsel. Her agent said that the company doesn’t do so, which leaves her on her own. She will probably be awarded a settlement, which is not always an objective dollar amount and is probably going to be a number she (or her counsel) works out with the attorney for the other insurance company. She has already obtained legal counsel, which she probably needs.

@Greg,
Your words “Unfortunately, she does need a lawyer” pretty well sum it up. I hadn’t thought of the possibility that the other driver might not have enough insurance. Hmmm. If that occurs, then I would hope that her own company would be honorable enough to do the right thing. But would they be more apt to do so if she has legal counsel or doesn’t have legal counsel? I am thinking that her counsel would be advantageous.

Thanks for sharing your thoughts. Much appreciated.

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joeplemon August 6, 2010 at 10:19 am

Bob,
Thanks for the encouraging words and especially for your prayers! Carol will appreciate knowing you are praying for her.

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