By now you have reported your car accident claim to the insurance company and have hopefully recovered from any injuries you may have sustained in the accident. At some point, your accident case will be resolved, either through a settlement with the insurance company, or after a trial. That's obviously an important step in getting your life back to normal, but it's not necessarily the final step. If you reach a settlement, or win a verdict at trial, you will need to collect the money you are owed. This article addresses collecting a settlement or judgment in a car accident case.
After weeks or months of negotiating, you have reached a settlement with the insurance company. The first thing you should do is put the settlement offer in writing by sending a letter to the insurance claims adjuster stating the amount of the settlement offer that was extended to you and that you accepted.
The insurance company will then send you (or your attorney if you have one) a "release" for your signature. A release is a legally binding document in which the insurance company agrees to pay you a stated amount in exchange for your giving up the right to pursue the insurer, or the insured other driver, for any future damages arising out of this particular car accident. Oftentimes the insurer will not provide a settlement check until it has received back the signed release. Once the release is returned, the insurer will send a settlement check.
If you have an attorney, the insurance company will usually send the check made out to both you and your attorney. Your attorney will deposit the check in a law firm account and will write you a separate check after taking out any of his or her attorney fees and costs.
If you owe any remaining medical bills, your attorney can also use the settlement money to pay those fees. In some cases, the insurance company has made an arrangement with a health care provider and will deduct amounts owed from the check sent to you and send payment to the health care provider directly. If at all possible, its best for you and your attorney to take care of paying off any outstanding medical bills because you may be able to negotiate the amount owed to the medical provider.
Collecting settlement money from an insurance company is relatively straightforward. It is extremely rare for an insurer to fail to pay after a settlement has been reached, especially if you have put the agreement in writing.
On the other hand, if you have settled directly with the driver of the other car, collecting any settlement may pose greater challenges. As with any settlement offer, make sure your agreement is in writing and signed by both parties. Depending on your state, you may be able to file a lien on the at-fault party’s property. You may also be able to pursue a judgment against the driver either through small claims court or local civil court.
If you were unable to successfully negotiate a settlement with either the insurance company or the other driver individually, you may have had filed a lawsuit and proceeded to a trial. After the trial occurs, at which both sides get to present evidence in support of their respective positions, a jury or judge will render a verdict. This should include a finding as to who is at fault, and if you are the prevailing party, you will likely be awarded some amount of monetary damages. Once a verdict is reached, the judge will enter judgment in your favor.
A court judgment means you are legally entitled to recover the money awarded. If the other driver was insured, the insurance company likely represented the driver at trial, and is aware that a judgment has been entered in the case. Unless an appeal is filed, the insurance company will forward payment to you and/or your attorney shortly after the trial. In the unlikely event that the insurer refuses to pay, you can return to the court and seek enforcement of the judgment.
If the other driver was not insured, you will need to obtain payment directly from that driver. In many instances, this will prove to be difficult, especially if the uninsured driver has been found liable to you for a significant amount of money.
The other driver may be unable, or unwilling, to pay you the entire amount at once. If you cannot work out a reasonable payment plan, you can file a lien against the at-fault driver’s property. In some jurisdictions you may also be able to garnish a portion of the driver's wages to get partial or total payment of your judgment. Because obtaining liens and enforcing judgments can be difficult, you may want to speak to an attorney about your options.