So, you got into an accident and you think you have done everything right.  You went to the doctor, followed up on all of your medical appointments, you reported the accident to the police and your insurance company, you researched to try and find a good lawyer that signed you up as a client and is now in the process of settling your case.  The lawyer tells you how much money the insurance company is offering, and then telling you how much you will net out.  And, you are STUNNED!!

     You say to yourself, how come that is all I am getting?   You sit down and try and run the math.  Your case settled for, hypothetically, $60,000.   So, let’s see, your lawyer gets one-third of the settlement ($20,000) leaving you with $40,ooo..  So why did your lawyer say your are only getting $19,000????  Who the heck is getting the rest of your money?!  After all, you were the one that got injured, so who else gets their hands in your pocket and is taking your money??  Let’s take a look!!

     If you hired a good lawyer, everything that follows below is information your lawyer explained to you when you  hired him/her or shortly thereafter.  If you are only hearing about it after your case settled, then that is probably a lawyer you will not ever want to hire again or refer to any of your friends or family.  Part of the lawyer’s job is to explain just where does the money go when the case settles.  No lawyer in good conscience waits until after the case settles to try and explain that to his/her client.  Part of the job of  being a good lawyer is to not let a client develop unrealistic ideas about how much money they may get and certainly keep the client advised every step of the way about how much the client will NET out when the case settles once figures start to be discussed.  But, getting back to our example, here is how a $60,000 settlement may only net a client $19,000.

     After the accident happend and you started getting medical bills in the mail, you were delighted to see that your own auto insurance had “Medical Payments” coverage that started paying your bills.  In fact, you had $10,000 in that type of coverage and so your own insurance company paid the first $10,000 of your bills.  So far so good.  Your total amount of bills was $16,000, and then you remembered that after your medical payments coverage was exhausted, your group health insurance from either your employment or maybe your spouse’s plan took care of the rest of your bills.  That was peace of mind to you and you didn’t have any money grubbing collectors coming after you for unpaid bills, etc.  OK, so why did you only get $19,000???  Here’s why!

     Hopefully your lawyer had a written fee agreement with you (required in Illinois if the lawyer is working on a contingent fee).  The lawyer’s fee was probably 1/3 of the settlement, and that was the easy part to figure out.  $60,000 - $20,000 = $40,000.  So, where did the other $21,000  disappear to?  Who grabbed your cash?!  Well, it turns out the lawyer had $5,000 in legal expenses preparing and prosecuting your case.  Every good lawyer keeps receipts for these expenses.  They include, for instance, the cost of getting your medical records, medical reports from doctors, the cost of filing the lawsuit, deposition and court reporter fees, etc.  These costs can add up so demand an accounting of them.  But that $5,000 is recoverable to the lawyer, bringing it down to $35,000.  So who else is grabbing the cash???   You probably guessed it by now—the INSURANCE COMPANIES!!!

     You got that right!   You bought and paid premiums for insurance, and they paid just like they were supposed to and now they get their money back?  Tough stuff to swallow.  Every insurance policy for cars or group health have a clause that allows them to get back the amount of money they paid for their insured if they had to pay because of some other parties fault.  So when the at fault insurance company pays you, your own insurance company has a right of subrogation or reimbursement to get the amount of money they paid on your behalf taken right back to them out of your settlement.  Are they greedy or what?!

     So, when your own auto insurance paid the first $10,000 of your medical bills, they get that amount back!  So now you are down to $25,000.  Remember that your group health insurance paid the next and last amount of bills of $6,000, and they want that back too!!!  You may not have known this if your lawyer did not tell you (but they should have!!), but while they were representing you, they received “LIENS” from your insuranc companies which must be honored at the time of the settlement.  So, after your good friends in the insurance industry get all their money back, you are left with $19,000.  Here’s what it looks like:

Settlement            $60,000

Atty Fee               ($20,000)

Expenses              ($5,000)

Med Pay Lien       ($10,000)

Group Health Lien  ($6,000)

Net to YOU:      $19,000

     After you recover from the shock of learning that, next time you need a lawyer that keeps you up to date on how  much you will NET out, and not surprise you with that after the case has settled.   Additionally, did you know that your lawyer, at least in Illinois, could have worked to REDUCE the amount of the insurance liens?  And that would have put more $$$$$ in YOUR pocket, not the insurance company.   If your lawyer didn’t tell you this before hand, and didn’t work to reduce the liens, he/she did not work hard for YOU!!!   Call us.  We fight for our clients to maximize their recovery.  We don’t ever try to help the insurance companies get their money back!!  That is your money, and we try to get you every cent we can.   Good luck.