Posts Tagged ‘car accident’

Should I Wait To Heal Before Settling After Being a Victim in an Auto Accident?

Wednesday, December 7th, 2011

After becoming a victim in an auto accident, a large “bite” is taken out of your life. This entails bodily injury, damage to your vehicle, and plenty of missed time potentially from work. To the insurance company who deals with these things every day it may seem like an inconsequential “bite”, but to you it will upset completely the baseline world in which you exist.

Your new existence will entail doctor visits, therapy, and mounting medical bills. The injuries you sustain from the accident may take months to heal or even over a year.

Unfortunately you will need to deal with phone calls and estimates to body shops and auto repair centers, as well as dealing with insurance companies. Nobody would call this a fun time, and an experienced personal injury larger can help significantly with all of these issues and your case against the other party. A veteran personal-injury attorney can help recommend when would be the appropriate time to settle your case.

The question is though, do you need to wait until you are healed to seek money or is it appropriate to seek monies earlier? In reality, that is exactly what is in your best interest. Why? The problem is sometimes injuries take a while to surface, such as a long term effect of traumatic brain injury (TBI) or potentially a post-traumatic stress disorder (PTSD). Because of this, settling too soon with the insurance company may leave additional monies on the table.

The key to receiving an appropriate settlement that you will not look back on with regret is patience. This is a tough mantra to hold, especially when the accident takes this “bite” out of your life. But patience will help make the “bite” get filled to make you somewhat whole again, as the end result would be a higher settlement.

This is one of the primary reasons insurance company may be pushing you to settle to quickly. Which you truly want to do is to reach “maximum medical improvement” before settling with them. What exactly does this mean? This is the point where the doctor reports that the maximum healing is complete and you have reached the maximum recovery as much as possible. At that point you have a really good understanding of what your care needs will be in the future and your lifelong limitations.

If you are not healed back to complete baseline as before the accident, calculations exist which can help predict future medical expenses which can be added to the expenses incurred to that point. Once all of that is put into numbers, the settlement process can be initiated into realistic numbers. If you have been patient enough to allow these realistic settlement calculations to be generated, this will give you the best chance of making yourself whole again and receiving the highest settlement.

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Is A Personal Injury Settlement Taxable?

Monday, December 5th, 2011

If you were in a car accident as a result of someone else’s fault and ended up breaking some bones along with other medical problems, you probably had to miss work and deal with significant pain and suffering. You go through doctor visits, physical therapy, imaging studies, some nightmares, counseling, and overall it amounts to a very stressful time.

Eventually your case settles and all of your damages are reduced to a monetary amount. Do you then have to pay taxes on that amount? It depends on whether or not the settlement money is being received for the injury or for the loss of economic benefit.

The premise is that basically if the monies are being received for the injury then it is not taxable. if however the money received is for loss of economic benefit than it is included in gross income and subject to taxation. If you are out of work and lost wages and part of your injury settlement replaces those amounts, you would have to pay taxes on that because you would’ve been otherwise working and paying taxes anyway. There has been some precedents with case law as to this, put it is not always clearly defined. This article also is not being written by an attorney so this does not constitute definitive legal advice!

The IRS has a tax code dealing with physical personal injury payments and how they are excluded from gross income. That section is text 2104. It is not extremely clear to find as directors not give specific guidance on the terms “physical injuries or physical sickness”. If the settlement compensation is being received for “physical sickness or personal injuries” than that amount is supposed to be excluded from a person’s gross income amount.

An IRS case in the past known as LTR 200041022 involved in IRS ruling about a woman who got a settlement from her employer as it related to unwanted physical contact. Since the settlement that the woman received was not based on actual physical injuries and there was no “observable bodily harm”, the IRS ruled that the settlement monies had to be included in her gross income.

There was also a United States Supreme Court case section 104, Schleier v. Commissioner. there was a two-step mandate that was adopted by the court with the cause of action need to be a tort type action with the monies received being on account of personal physical injury or sickness.

Since it is not clearly defined, individuals in this situation should talk to a competent tax lawyer to clarify exactly what should be included in gross income or excluded. Since settlements at times end up in the millions of dollars, this should be a definite prerequisite since if calculated incorrectly the IRS may get involved.

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After An Auto Accident, Should I File A Liability Claim?

Saturday, November 26th, 2011

With regards to your car insurance, two types exist – liability coverage and property damage. If the other party sustains injury in an accident that was your fault, then that coverage applies to the liability coverage. Most of these accidents should definitely be reported to your carrier, even if the damage was only minimal.

How do you know when it does not need to be reported? If the accident involves only property damage and no bodily injury, then it may be proper to not report it to your insurance company. You may just want to pay for the damage yourself to avoid having a claim on your insurance record.

If there is any potential for an injury however, the claim should at least be reported. For instance if you rear end another auto going only five miles an hour, you may not need to report a claim after speaking with the other driver. However, what is necessary is to at least tell your insurance company about the crash.

You should relay the accident specifics, give the location of the incident, the other driver’s vehicle information, along with the driver and passenger info. It may end up that you pay for some minor property damage and that’s all. It could be however, months afterwards the other driver or passenger claims back pain from the accident, and if you had notified your insurance about the accident it will be covered. If however you did not notify them, they may say they are not obligated to cover you.

You should also always report any claims involving accidents with pedestrians, minors, or cyclists. Let’s say you’re backing out of your driveway and you almost hit a child riding a bicycle in the neighborhood. You don’t actually hit the child, but let’s say you hit the tire and the bike is ruined, but he’s fine. The child has no scratch at all. Even if the child and his parents apologized profusely and say the child was at fault, it should still be reported.

This could resolve any legal problem in the future if documented so that you are protected from any potential legal issues. You may want to still buy the child a new bicycle, but you should also notify your insurance company. They wouldn’t be obligated to defend you if you didn’t and a claim for injury ever resulted.

The bottom line is you should have a low threshhold for reporting to your carrier. When it comes to liability, you can never be too careful and discussing with your carrier and notifying them of the accident can help with their need to defend you later.

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