After an amazing Italian holiday, (and we all need a vacation) it’s time to get to the grind! My next topic for discussion is regarding the rationale behind settling your Accident Benefits Claim. I’ll share some tib bits of information surrounding the what, when, and why of settlement as well as the who
WHAT is a settlement?
- A settlement is a sum of money that is determined between all parties that is for any past, present and future Accident Benefits that can include Medical, Rehabilitation and Attendant Care Benefits, as well as Specified Benefits known as an Income Replacement Benefit, Non-Earner Benefit and Caregiver Benefit
- Knowing what is owed vs what you deserve – do not fall for promises from legal counsel and look at what is fair based on your injuries and circumstances (i.e your inability to return to work or perform self-care tasks). Your adjuster will review your file and calculate a Med/Rehab burn rate (what has been paid on your file and calculate the monthly costs) – for example, if your spent is $20K over two years that’s $10K/year or $833/month lets say over 5 years (or more depending if there is a potential CAT Risk), settlement will be $50K less any contingency for settling the file now vs in the future or about $45K for a full and final settlement – once all parties have agreed on a settlement number, the adjuster will complete and send you a Full and Final Release along with a Settlement Disclosure Notice – see at the bottom for more details
WHEN to settle?
- Settlement usually occurs after one year from the date of loss, preferably two years and prior to the 5-year non-catastrophic policy period
- It’s best to settle early into your claim (after one year) to avoid litigation or any disputes, and quite frankly less stress and headaches for you -A Settled File is a Closed File and believe me, closure is a good thing!
- For most personal injury claims, there is a Statute of Limitation of 2 years. This means that, if you are injured, you must begin your court case before 2 years from the date of the incident in order to receive any damages from a court. This means you may not be able to sue for damages if the incident happened more than 2 years ago.
WHY Settle?
- The single most important reason to settle is to cut ties off with your insurance company/adjuster/claim, PERIOD!!
- It’s very stressful having an open Accident Benefit claim.
- The first thing I honestly tell the claimant (YOU) is to go on vacation after your settlement – seriously – you need to unwind and take a breather from the stress of an accident and move on with your life
Also…
- By settling your Accident Benefit claim, you are obtaining funds in YOUR pocket so you have control of where you want to allocate your Accident Benefit funds – such as what type of treatment and how often you want the treatment, additional financial funds to support your income and if you want additional personal support (attendant care) or assistive devices that you feel you need or require as a result of your injuries and not the decision of the insurance adjuster
- CAT Risk files – if you have not been deemed to suffer a catastrophic impairment but are in the process of this or your injuries appear to be serious, there may be a Catastrophic (CAT) risk associated with your claim – in this scenario, your insurance adjuster will need to review your file and determine this potential risk – if there is a catastrophic risk they should be looking at your file over a LIFETIME period and not the 5-year non-catastrophic policy period and settle the file accordingly – this is a bit more tricky and I can help you decipher whether your file/claim has a potential for a CAT risk or not
WHO?
- You don’t necessarily require legal counsel to settle your Accident Benefit claim
- As a former claims adjuster, I’ve settled numerous claims without counsel, even serious potential catastrophic (or CAT-Risk) files in a fair and transparent manner
- If you’ve gone through your claim without any denials from your insurer or any disputes, you can discuss a fair settlement with your insurance adjuster pretty easily
- If, however, you’ve had a dispute or two and you’ve consulted with a law firm then they will settle the claim on your behalf – they do, however, take a percentage of the settlement (normally 30%) of the total settlement
- If there have been denials from your insurer, they need to consider this in the settlement as this is a risk for litigation hence the purpose of settlement NOW versus waiting for a litigation dispute resolution or determination – again it is up to all parties including yourself and the adjuster to determine if it is worth litigation or rather consider a settlement. If they do veer towards settlement then they should consider an amount for any or all of the disputed items – they could take, let’s say 50% of the total disputed amounts into the settlement amount
Additional Information: Documents – The Full and Final Release and Settlement Disclosure Notice taken from the FSCO Website
A Full and Final Release is a legal document between two parties where one agrees to drop their legal claims in exchange for a settlement offer. This type of contract is common in insurance-related claims and, once signed, releases the settling party from any and all legal claims mentioned within the contract.
The Settlement Disclosure Notice, often referred to as SDN, is a mandatory form that insurance companies must provide to claimants in Ontario during the settlement process of accident benefits claims. It serves as an essential tool for ensuring transparency and fairness when an insurer offers a settlement to an injured party.