Do Insurance Companies Make Advance Payments Before Settlement?

A bad injury can prevent the victim from being able to working. No work means no income. Also, the injured person may have insurance co-pays and transportation costs. He or she may have other expenses as well. Will the insurance company for the at fault party make an advance payment to the injured person before settlement?

This is a valid question since personal injury cases take time to settle. And we all know that people need money to survive.

First things first. If an insurance company makes an advance payment, it would get credited toward the total settlement at the end of the case.

The bad news?

Unfortunately, to the best of my recollection, I have never had an insurance company offer money before settlement in a personal injury claim. Not once. I’ve been practicing 15 years. And I’ve settled hundreds of personal injury cases.

A personal injury claim is a claim for pain, suffering, lost wages and medical bills. Examples of personal injury claims are claims for car accidents, slip and falls, and more.

However, there is some hope. If someone was injured at a premises, the premises owner may have Medpay coverage. Medpay may pay for medical bills and/or liens up to a certain amount before settlement.

Don’t get too excited though.

Huge corporations aren’t likely to have Medical Payments (Medpay) coverage. Therefore, don’t expect Walmart, Walt Disney World, Publix Supermarkets, Universal Studios or Target to have Medpay.

Likewise, don’t expect cruise lines to have Medpay coverage. This includes Carnival, Royal Caribbean and Norwegian.

The injured person can still ask the adjuster if he or she will make an advance payment. After all, it doesn’t hurt to ask. So long as the injured person doesn’t sound desperate.

If the adjuster senses desperation, he or me may make a lower offer to settle the injury case. Or the insurance company may try to delay settlement. Yes, an insurance company may really delay settlement! Insurance adjusters aren’t saints.

In sum, I don’t think that the insurance company will agree give the injured person an advance on the settlement.

Moreover, if the premises is owned by a huge business, confidentiality issues will likely prevent an advance payment. If the big business makes an advance payment, they will want it to be confidential. They may also want the facts of the accident to also be confidential.

But how can the injured person keep the advance payment confidential and continue to pursue the claim?

At the least, the injured person will likely have to tell his doctors about how the injury happened. This may violate the confidentiality provision.

Insurance Company May Not Make Advance Payment if Liens Exist

If the injured person has an attorney, there is another issue that very likely will arise. Even if the adjuster were to make an advance payment, at least one state (Florida) requires the attorney to notify and pay any third “persons” with an interest in the funds. Rule 5.1.1(e), Rules Regulating the Florida Bar.

I only practice in Florida. Thus, I don’t know what other state laws require.

Examples of third persons include, but are not limited to, the injured person’s travel insurance company. The travel insurer may have an interest in any advance payment that the liable party’s insurer makes. In other words the travel insurance may try to recoup payments that it made.

I’ve dealt with travel insurance companies when I represent foreigners who are injured in Florida.

Unless the advance payment from the at fault party is greater than all of the funds owed to third persons, the injury attorney can’t pay the client. At least not in Florida. Likewise, the attorney can’t even pay himself or herself.