Personal injury settlements help plaintiffs (the injured) get their lives together. Seeking compensation for physical injuries or property damage through an insurance company can be frustrating as it could take longer than expected.
Unfortunately, your financial needs will not after a car accident. You’ll continue incurring medical expenses besides your usual expenses, such as school fees, shopping, and others–causing financial stress. The situation can become more complex if you’re the breadwinner in your household–this is when to contact an accident attorney in Alaska. But how do you meet your financial needs as you wait for your settlement to be paid by the insurance company?
Your Financial Assistance Options after a Car Accident
The available options for financial aid while waiting for a car accident settlement can include:
- Pre-settlement loans;
- Charitable organization;
- Health insurance.
It is important to discuss your options with a financial expert or your accident attorney before settling on a particular option.
1. Pre-Settlement Loans
A pre-settlement loan refers to cash advances given to victims of car accidents to cover their living expenses as they wait for an insurance or lawsuit settlement. Pre-settlement loans are meant to be used on basic needs although they can be used in any way.
Technically, a pre-settlement loan is not a loan per se, because it does not meet the definition of a loan. The definition of a loan can vary but an acceptable definition can be “a repayable cash advance”. On the other hand, the repayment of a pre-settlement loan depends on whether one is compensated–if you do not recover damages, you can decide not to pay the “loan”.
In simple terms, repayment is not guaranteed in pre-settlement loans and that’s why most lenders only advance money to cases that have a high likelihood of success. However, regulations applicable to standard loans may also apply to these types of loans. Also, pre-settlement loans typically attract high interest–they’re good alternatives when other financial options aren’t available.
Lending companies base their decision to advance money on the facts of a case, particularly the value of your settlement. Most lenders limit pre-settlement loans to a percentage of the estimated settlement although some can lend an amount equivalent to the estimated value of your settlement. The common pre-condition for pre-settlement loans is that the borrower will repay the loan immediately after the case settles.
Eligibility Criteria for Pre-Settlement Loans
Most lenders demand the following qualifications when applying for a pre-settlement loan:
- Applicants must have filed legal action in a court of law;
- Applicants must have legal representation;
- The majority of fault is on another party besides the applicant.
Qualifying for legal funding typically depends on the facts and strength of a case. Funding companies expect to recoup their money because they are in business and that’s why they are selective about qualifications for funding. For instance, you might not be funded if your fault for an accident is significant.
2. Health Insurance
A health insurance policy can help you cover medical bills after initiating t an insurance claim.
Some insurance policies include accident emergency services coverage. Your insurer should clarify the details of your policy to help you understand the available relief for your situation.
The trick here is to file a claim on your health insurance and not car insurance–you’ll probably have brought a claim against your car insurance if you’re waiting for a settlement in a car accident. You’ll only be compensated once in a car accident injury settlement–meaning that bringing a medical insurance claim against your car insurance invalidates your health insurance settlement.
Waiting for a car accident settlement can be frustrating but worth it because you can recover damages for all your expenses. For instance, a quick settlement will cover your initial medical bills, but you’ll not recover more money if your first surgery doesn’t work later–maybe like six months later. Your health insurance ensures present and future expenses are covered.
3. Charitable Organizations
Car accident claims can take longer to settle and there’s no shame in seeking assistance from a charitable organization to get through such difficult times. Your injury attorney can help you if you’re struggling financially. Although your lawyer may not afford to lend you the required money, they can connect you to the right people.
Most attorneys are well connected and they know charitable organizations that can help you meet your financial obligations as you wait for the car accident settlement. Besides seeking assistance from charitable organizations, you can apply for Social Security disability if the accident resulted in permanent disability.
Pre-settlement funding options are many although they can come with unreasonable demands. Ensure to involve legal counsel before settling on a pre-settlement financial option/offer.