Your Options When You Can’t Work – Short & Long-Term Disability Explained
3 October 2024Establishing Negligence in Slip and Fall Lawsuits
23 October 2024The Risks of Settling Your Entire Accident Benefits Claim
In the aftermath of a car accident in Ontario, insurers often move quickly to secure a final settlement. Learn why those full and final settlements aren’t nearly the convenient “deal” they seem to be.
You’ve just been in an accident and are dealing with countless hospital stays, doctor’s visits, physiotherapy, a slew of medications, missed income, and so many more physical and financial tolls.
Most insurance companies know you need money in your pocket quickly, so they swoop in to offer you a settlement and reach a mutual agreement. Unfortunately, they’re a profit-based business, so they’re ultimately looking out for their bottom line—even at the expense of yours.
Our team of Hamilton lawyers are taking you through the settlement process and teaching you all about the dangers of “full and final” settlements. Use this guide to advocate for yourself and secure the compensation you rightfully need and deserve.
What is a Full and Final Settlement?
The full and final settlement is a completed agreement signed by you and your insurance company to resolve all accident benefits claims against them. If you accept what’s offered in the full and final settlement contract, you give up your rights to any future benefits related to accident—regardless of shifting conditions and unexpected outcomes.
If you sign a full and final settlement and then find out your sprained wrist is actually broken, you can no longer secure any additional compensation and face paying those costs out of pocket.
Most full and final settlements are lump-sum payments from insurers aimed to quickly get cash in your hands and limit the insurer’s future financial obligations.
Unfortunately, that weights the power far too heavily on the insurer’s side of the deal, and many claimants end up dealing with inadequate payouts and future financial struggles paying for costly treatments alone.
Why Not to Settle Your Entire Accident Benefits Claim
If you can afford to hold off on a settlement until you have a full-picture view of your medical and financial future, you’re more likely to get a fair payout.
Here’s why you should wait.
- Minor injuries may become major. While most injuries will show up to 48 hours after a car accident, we can’t possibly understand the depth of every impact in such a short time. Some injuries will be invisible; others may seem minor on the surface but become major in the coming months and years. If you think a simple whiplash injury will resolve and you end up with chronic pain requiring costly treatments like surgery, injections, and physiotherapy, you need time on your side to build a case for a higher settlement.
- Ongoing medical care is expensive. Even if you know you need ongoing treatment for an injury, it’s often difficult to estimate how fast you’ll recover or if you’ll ever fully recover. In those early days, weeks, and months, watching your speed and level of recovery can help you better estimate your likely medical costs and future needs.
- Your work status may change. Hopefully, you’ll be able to return to work immediately, but often that’s not the case. And it’s harder to tell early on if you’re simply facing a temporary loss of earnings or an ongoing reduced earnings capacity. Since your work is your lifeline to financial security, you can’t sacrifice it for a small payout that won’t cover your ongoing bills.
- Pain and suffering add up. Pain and suffering can’t be seen on an x-ray or medical scan, and emotional distress can take time to set in. If you end up facing chronic depression, an anxiety disorder, PTSD, and other negative impacts on your mental health, you’ll have a better understanding of those impacts if you wait to settle until the dust has settled. Give yourself time to heal mentally and emotionally so you can better quantify those costs.
- Rehabilitation is costly. Rehabilitation costs are some of the biggest you may face as physiotherapy, counselling, and occupational therapy can stretch on for months and years. Be sure your insurance company isn’t cashing out accident benefits too early, which could limit your access to these services or cause you to face high expenses, less effective treatment schedules, or going without altogether.
What is the maximum accident benefit in Ontario?
In the Ontario insurance system, we have three tiers for accident benefits. Minor injuries can pay out up to $3,500, non-catastrophic injuries pay up to $65,000, and catastrophic impairment benefits pay up to $1 million. Non-catastrophic injuries are the most severe, including spinal cord injuries, traumatic brain injuries, limb amputation, vision loss, severe orthopedic injuries, and more.
When is a Full and Final Settlement Appropriate?
While in many cases, a full and final settlement should be avoided, there are times when it could work out in your favour. If you’re on the fence, you should consult this list and always consult a lawyer so you can make an educated decision.
Consider a full and final settlement if:
- Your injuries are relatively minor, and you’ve fully recovered from them. When you know the exact cost of those medical bills and associated financial losses, it’s much easier to tell if the offer is fair.
- You have a clear understanding of your future medical needs and costs. Don’t go on instinct or make a decision out of desperation—work closely with a trusted doctor and medical care team to get the right diagnosis and figure it out as your situation evolves.
- You’re able to return to work without any limitations. This means your pre-accident role to its fullest, not a job you had to get because you’re no longer able to work in your original role.
- You’ve received a fair and reasonable settlement offer. If the insurance company offers a decent settlement that compensates for all your losses appropriately, it may be time to settle. Read the full and final settlement wording carefully with the help of a lawyer who can help you understand its full impact.
How much will I get from a car accident settlement in Ontario?
It depends on the severity of your injuries and the cost of your treatments—there are no cut-and-dry, easy answers. Still, a medical and legal team can help you understand your best, worst, and most likely scenarios if you decide to negotiate with the insurance company.
The Burn Rate: Your Ultimate Deciding Factor
Your “burn rate” measures how quickly you’re using your accident benefits, and it’s a common calculation when insurance companies assess your needs and annual expenses. With the burn rate, they can project your future budget and determine how much your claim is “worth” to them.
If you have a low burn rate, the insurance company may try to pay you less compensation than initial estimates, which doesn’t take into account the ebbs and flows of treatment costs over time. Your burn rate might be low now, for example, but in three months, you may need another expensive surgery to remove pins from a healed bone, for example.
The burn rate ignores hidden costs because it usually covers medical expenses alone. That’s why many insurance companies end up giving relatively low offers because they aren’t getting the big-picture view of costs like lost income capacity, home modifications, pain and suffering, and more.
How a Lawyer Can Help
When dealing with accident benefits claims, you must have a solid medical team and an expert lawyer on your side to help you keep accurate and detailed records of expenses, regularly review your recovery, and share legal expertise so you don’t get bullied by big insurance corporations. When you don’t know your full legal rights, it becomes an uphill battle to protect them alone.
The Morris Law Group—Attorney Personal Injury Law Hamilton
If you’re struggling with an insurance claim or fighting with an adjuster, The Morris Law Group’s lawyer injury team can help. We’re ready to listen and serve as your advocates to navigate the complicated legal and insurance systems together. Request a free consultation or call us at 905-526-8080 to learn more.
Get a Free Case Evaluation - Just Tell Us Your Story.
Our team of experienced lawyers are ready to hear your case and help you see the justice you deserve. Contact us to review the facts and start your free case evaluation.