Where Does the Money Come From After a Successful Personal Injury Claim or Lawsuit?

by Terry Bryant

The majority of the time, a successful injury claim or lawsuit is paid for by some insurance company. Most often, it’s the company which insures the negligent defendant. Sometimes the funds are paid by your insurer. A very small percentage of compensation comes directly out of the pocket of the negligent defendant. And sometimes the total amount can come from a combination of these three sources.

The Negligent Defendant’s Insurer

Below are a few examples where accident victims are compensated by the defendant’s insurer.

  • If you are involved in a car wreck in which the negligent defendant is fully at fault, and he or she carries sufficient auto liability insurance to pay all of your medical expenses, property damage, lost income, pain and suffering, wrongful death, and other tertiary expenses, no other source is needed.
  • If you slipped and fell at a shopping mall or on someone else’s property (e.g. their yard or home), the primary source of compensation is through a claim or legal case against the owner’s commercial or personal property insurance.
  • If a hospital or your doctor misdiagnosed an illness or injury, the hospital or your doctor’s medical malpractice insurance pay your damages.
  • If you are injured at work, your employer’s Workers’ Compensation policy (or the company’s liability insurance, if it does not subscribe to workers’ comp) is your primary – but not always exclusive – source of compensation.
  • If you are injured by a defective product, the manufacturer’s, designer’s, distributor’s, or retailer’s liability insurance is the source of your compensation.

When Your Insurer Pays

Using some of the above examples, your insurance company might be compelled to pay some of your damages if you carry coverage for such an eventuality.

If you carry Personal Injury Protection (PIP) and Uninsured/Underinsured Motorist coverage (UM), and the negligent driver who hurt you doesn’t have enough coverage in their policy, your insurer will pay the difference (and then probably turn around and sue the driver).

Three of the examples mentioned above (slip-and-fall, medical malpractice, defective product) are often addressed, if the defendant is not insured or is under-insured, by various applicable insurance that you might have, such as property or auto PIP (which can apply to injuries other than vehicle-related). Your healthcare coverage will also pay for medical bills, but little else, if your injuries arise from medical malpractice or a defective product.  This is a very complex issue and is best explained by your injury attorney.

Civil Lawsuits as a Source of Compensation

The above sources from your insurance company can often be little more than a patch that cannot come close to full compensation. So your lawyer must investigate all possible defendants – beyond the value of their insurance – to know whether they are fiscally solvent.  A defendant must be solvent (have enough money) to pay your legal damages – out of their own pocket if necessary.

If a defendant is insolvent you will most likely not be able to collect anything beyond available insurance. This is a sad circumstance, but one that unfortunately does occur.

Defendants often try to appear insolvent to injured plaintiffs and their attorneys, going to great lengths to hide their assets and make themselves appear insolvent, even though they’re not.  But experienced personal injury lawyers perform stringent asset checks to get a true picture of a potential defendant’s available resources. If they’re hiding money, chances are very good your lawyer will find out about it and help you seize those assets through a civil lawsuit.

To schedule a free consultation with Terry Bryant Accident & Injury Law, contact us today by filling out our online contact form or giving us a call at (800) 444-5000 or locally in the Houston area at (713) 973-8888.