One current trend among insurance companies is to save money by pressuring auto collision injury victims to settle before they even understand the full extent of their injuries. State Farm calls it their “early offer.” But victims need to know that this “offer,” if accepted, is a full and final resolution of all bodily injury and medical claims you may have now or in the future, whether you know about them or not. So whether you are filing a State Farm accident claim, a Farmers Insurance claim, or filing a claim with some other insurance company
What is an Early Offer?
An early offer is a letter from an insurance company offering to settle an automobile accident victim’s claims for known and unknown bodily injuries and medical expenses. State Farm Insurance is known for sending these to claimants.
On the right is a recent example of an “early offer” received by a person injured in an accident caused by a State Farm insured. Note the dates: it was sent just five days after an automobile accident. The offer also gives the victim 15 days to accept it, or it will expire. This added clause can pressure the victim to accept out of fear that it will go away and they will be stuck paying their bills out of pocket.
What Happens When I Accept an Early Offer From State Farm?
When you accept an early offer from State Farm, they pay you the initial promised lump sum, and they pay off your past medical expenses up to the stated medical coverage amount. They also pay for future expenses until all bills total the stated medical coverage amount or the 180 deadline runs out- whichever comes first. You are responsible for all bills after the earlier of the above limitations expires, and you cannot make any additional claims for medical expenses, pain, suffering, mental anguish, scarring, disfigurement, or disability.
What If My Medical Bills Exceed the Amount Set Aside for Medical in the Early Offer?
If you accept the early offer and it states a maximum amount it will pay for all your medical bills, you are responsible for the balance that exceeds that maximum.
Accepting an Early Offer is Like Flying Blind
Because the early offer is typically made very early, even days after the wreck, and it has a short time in which it must be accepted, the victim is basically making a decision about their health without having all the necessary information. Common whiplash injuries that arise from an auto collision may not even fully manifest themselves within the first few days. Moreover, they can worsen over time, especially if left untreated. Many accident victims make the mistake of trying to just “tough it out,” thinking that the pain will go away. When it gets worse instead of better, having accepted an early offer can preclude a whiplash victim from getting the medical care reimbursed. If the pain gets progressively worse and ultimately requires expensive medical care, they are stuck covering the bulk of the bills out of their own pocket. You should not consider any offer until you are 100% recovered or your doctor has reached maximum medical improvement.
Does an Early Offer Have to Be In Writing?
No. Any offer to settle your case, early or late, does not have to be made in writing to be binding. If you verbally agree to accept an offer to settle any or all of your claims and you are an adult, you are bound to accept the terms of the offer. For more, read: Verbal Settlements Are Binding.
What Other Types of Early Offers Are There?
Recently, another insurance company made its own version of an early offer by telling an injured car accident victim that they wanted to pay her chiropractor’s bills directly and PayPal her $1,000.00 for her troubles. They then sent her an “authorizing document” via DocuSign to sign on her phone. Once she signed the “authorizing document,” they emailed her a copy, which was much easier to read. It released all of her claims in exchange for the payment.
What Should I Know Before Signing Any Settlement?
Before you agree to any settlement, you should know these things:
- Any medical bills paid by health insurance, Medicare, or Medicaid create a lien that must be reimbursed to the payor from your settlement funds.
- You are responsible for any unpaid balances on the medical bills.
- Any bill incurred by a hospital or emergency room physician within 72 hours of the accident must be paid from your settlement proceeds directly by the auto insurance company if they filed a notice of an emergency medical lien in the county records.
- Any future medical expenses are your responsibility unless the settlement release/agreement specifies otherwise.
Before you sign anything from an insurance company, have a lawyer review it.
Don’t Be Fooled by Tricky Insurance Settlement Tactics
The examples above show how insurance companies get people to sign away their rights before they have all the information needed to make an informed decision. Don’t make this common mistake when filing your claim. Talk to a lawyer whose job is to protect your rights before you sign anything the other driver’s insurance company sends you. Simmons and Fletcher, P.C., has represented accident victims exclusively since 1979. We provide free consultations and charge no attorney fees or expenses unless we recover for our clients.
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