Received an Auto Insurance Check for a Car Accident? Here’s What You Need to Know

Key Points:

• If you receive a check from the at-fault driver’s insurance company shortly after an accident, there is a good chance it will be for less than your claim is worth.
• Car insurance companies may send a check as a tactic to avoid paying higher compensation for your injuries.
• Oftentimes, when you cash a check from an insurance company, you are waiving your right to any future claims or compensation.

If you have recently been involved in a car accident in Atlanta, you may be wondering why a check magically appeared in your mailbox addressed to you from an auto insurance company. It’s likely you’re not used to being in car accidents, so receiving a surprise check in the mail can be confusing. While it may be tempting to deposit unexpected money, you should be cautious.

With no medical bills present, isn’t getting compensated for your injuries suffered in a car accident supposed to take longer and be more difficult? You may be wondering, what’s the catch? Why is an insurance company sending me money before we truly know the total cost of the accident?

As the saying goes, if something seems too good to be true, it probably is. Here’s what you should know.

What is an Initial or First Auto Insurance Check?

Whenever a car accident claim is filed, and fault is undisputable, auto insurance companies will send out a check with a brief contract after the insurance adjuster reviews and provides an analysis of the accident. This check comes in the mail, typically a few days to a couple weeks after a car accident. It typically comes without any car accident lawyer intervention, meaning its not necessarily a settlement check, but its designed to prevent a future settlement or trial, which means it is settling the claim.

Which Auto Insurance Company Sends a Check Immediately After an Injury Accident?

The check typically comes from the at-fault driver’s auto insurance company and sometimes arrives without any prior notice, which can be quite shocking. It rarely comes from a person’s own auto insurance company unless the at-fault driver is insured by the same provider.

What Does It Mean If You Receive a Check from a Negligent Driver’s Insurance?

 If you’ve received a check from the other driver’s insurance company, it is usually an indication that the insurance company believes you have a viable case. This means they are aware they will have to accept liability and will be required to pay even more than their initial offer. By providing you a check quickly, they are hoping to avoid a potential claim, which would therefore save them money.

Why Do Auto Insurance Companies Send a Fast Check?

It’s a tactic, and it has been very effective—so effective that it has become standard procedure. Insurance companies send the check quickly because even the accident victim does not yet know or understand the full cost of the accident. By sending it quickly, you might actually believe it is a great offer, increasing the likelihood that you will cash it, especially if you receive it before the medical bills come in. They might even offer other incentives, such as rental car or auto body shop services, to make the offer seem more attractive. This is how they save money on injury claims.

What Happens if a Car Accident Victim Cashes the First Initial Insurance Check Offer?

If you cash the insurance check, you often waive your right to sue or seek additional compensation for your injuries and related costs. Car insurance companies usually include a waiver with these checks, releasing them from any future claims. Even without a waiver, cashing the check is often seen as accepting a settlement, which can prevent future claims.

In short: Do not cash an insurance check before consulting with an attorney.

Is it Possible to Obtain Additional Compensation after Cashing the Initial Auto Insurance Check?

It depends. A car accident lawyer will need to review the contract and the accident details. Not all contracts with check offers are declared full settlements by the auto insurance company. If it’s a partial settlement, you can pursue additional compensation. However, if it is a full and final settlement, obtaining more compensation becomes very difficult. The lawyer will have to find ways to challenge the validity of the contract. In rare cases, if medical bills are higher than expected, a car accident lawyer might be able to negotiate for more money, but this is challenging and typically results in a lower amount than if the check had not been cashed and a lawyer was hired from the start.

What Car Accident Expenses are Often Missing or Not Included in an Initial Auto Insurance Offer?

First, the most significant expense is medical bills, as they often haven’t arrived yet. If the accident was catastrophic, medical bills can take months to appear and often reach six-figure amounts. These expenses are not processed through a health insurance company, leading to much higher bills than expected. People are often shocked by the substantial increase in costs without health insurance intervention. Insurance companies typically do not cover these expenses accurately with the initial payment.

The second major expense is lost income from work. This is an area where car accident lawyers excel in securing settlements, but most auto insurance companies tend to overlook it.

The third expense, which is never included in the initial payout by auto insurance companies, is for pain and suffering. Pain and suffering do not come as a bill but are significant expenses that car accident lawyers advocate for.

These three expenses may not seem like much individually, but they often amount to thousands of dollars. This is why it is not advisable to cash the check until a lawyer reviews it.

What Should Accident Victims Be Cautious of When Receiving the First Check?

Additionally, be cautious of any compensation that includes other passengers’ bills or a waiver of their liability. If your check includes compensation for other passengers in your vehicle, the insurance company is likely trying to settle the entire claim for a fraction of its actual worth.

What Should You Do If You Need the Money from the Original Auto Insurance Check but Do Not Want to Settle for Less?

Medical bills and other expenses from a car accident can accumulate quickly, causing significant financial pressure. If you need the money from the original auto insurance check but do not want to settle for less, there are options available to help you.

You can borrow money against your potential claim, but be aware that some companies may charge interest on these loans. Insurance companies often know that many people need immediate financial assistance and may try to take advantage by offering lowball settlements.

What Steps Should I Take Before Cashing a Check from an Auto Insurance Company?

• Look for any contracts or agreements within the envelope, and be sure to read every word. A single line can ruin your potential for more compensation, so it’s crucial to review it thoroughly.
• Call a car accident lawyer and ask them to review the document. They will likely do this for free and provide valuable feedback.
• Calculate the total costs of the car accident, ideally with a lawyer, to understand how much it will cost you and what your case might be worth.
• Don’t cash the check until either a lawyer or you have read it carefully.