I spoke to a cyclist recently who had been injured in a crash. Before calling me, he had been contacted by the insurance company for the driver who caused the crash. The adjuster had offered to pay several thousand dollars to offset some expenses as a "goodwill gesture." Before speaking with me, the cyclist had agreed to accept the money and signed a release required by the insurance company. Unfortunately, by the time the cyclist called me, there was nothing I could do since his case was settled when he accepted the money and signed the release. I felt terrible for the cyclist, as it appears to me he had suffered a potentially significant injury.
This scenario plays out regularly in the world of automobile collisions. Several of the largest insurance companies, whose names you would recognize, make it their practice to reach out to the injured party within days of the crash in the hopes of having them accept $1,000 or $2,500 for an early settlement of their case. This is a calculated business practice designed to save the insurance company money. They are perfectly willing to pay a little bit of money to someone who may have virtually no injury in order to prevent someone who suffered a serious injury from later bringing a much larger claim.
If you know someone who has been injured in a crash and they receive a call from the driver's insurance company offering to "help them out with a settlement," you should give one piece of advice: don't take the money. If the insurance company is willing to make an offer to settle immediately after the crash, that money should be available the following week or the following month. If there is pressure to make an immediate decision, red flags should be going off in your mind. Rarely should there be immediate pressure to make a decision to settle any case. The best advice? Talk to an experienced injury lawyer before accepting the money.
In our practice, we have had several clients who came to us after they were wise enough to turn down a small early settlement. One of the cases settled for the insurance company's policy limits of $100,000. We've also had people call us who accepted these small payments and later learned they had a significant brain injury or needed surgery, and they were unable to be compensated for their injury because of the quick settlement they agreed to accept.
When an insurance company offers money in these situations they will require the injured person to sign a release of liability. This release is drafted to protect the insurance company and to prevent any further payments to the injured person, regardless how serious their injuries may actually turn out to be.