Auto Insurance Claims: Insurance claim fora minor, infant compromise, settlement

Question
My 14  yr old daughter was in a car accident as a passenger in a car that was ticketed for the accident.  She has medical bills about $5,000.00.  and is not 100% after 4 months but the doctors do not think the mussel pains are permanent they will take time to heal.  She plays 3 sports and missed some games and still complains about her neck and back mussels something when she is playing sports.

My questions are 1.  if the medical bills are $5,000 what is an estimate of what we should expect to settle for?
2. being a minor does she have rights that we do not need to sign a release? 3. If the insurance company comes back with a low offer what is the negotiating typically like?


Answer
Dave,

I can't really give you an estimate of what the claim should settle for based only on the medical expenses.  A fractured leg may only cost a few thousand dollars in medical expenses but could be worth well in excess of $250,000 in a lawsuit.  However, assuming it's typical connective tissue damage to the neck and back you can use $15-25k as as estimate.

You will need to sign a release as your daughter's legal guardian and (in most states and certainly in New York) you will need court approval for the settlement.  It's called an Infant Compromise and it's the court's way of protecting the legal minor's rights to receive the settlement money once she reaches the age of majority (typically 18).  In fact, the settlement check is made out to the guardian for the benefit of the minor AND the actual banking institution selected by the guardian to make sure the money goes only to the minor.

As far as the negotiations are concerned, the insurance company will almost assuredly make a low ball offer to begin with - it's how insurance companies make money.  You should demand more than you're willing to take and expect them to make an offer of less than they are willing to pay.  

It's unfortunate but it's also a fact of dealing with the insurance industry.  Remember this advice when you see the "You're in Good Hands" and "Like a Good Neighbor" advertisements typically delivered by some actor who portrays a trusted character on a popular TV show.  You are not in "good hands" and they are not your "neighbor" - they are simply a very large multi-national corporation trying to maximize profits.

I hope this was helpful.

Ernest Ferraro