Cash Flow

Collisions impact cash flow.

• There are vehicle-related expenses including costs of repair, rental, replacing the total loss, etc.

• There are medical expenses.

• Income stops or decreases.

• More money is spent on outside services (grocery deliver, yard care, etc.).

• Even if there is insurance there are deductibles, patient responsibility portions and delays in processing reimbursement.

More money goes out. Less money comes in.

So it’s common for people to feel financial strain while their personal injury cases are pending. Lots of clients ask what can be done to help the situation.

Here are some thoughts about what can, shouldn’t and can’t be done.

Settle Property Damage Claim First. In Washington property damage claims can be settled separately from bodily injury claims. It frequency makes sense to settle property damage claims first. Where there is a big loss of use claim they can help offset some of the cash flow issues people experience. [Can]

Settle One Claim but not Another. Lots of Auto policies have one per person limit and another per occurrence claim limit. For instance, a driver may have a $100,000/$300,000 policy. That means the most that can be paid out is $100,000 per person and $300,000 per collision. Where, let’s say, a husband and wife are injured it may be possible to settle the husband’s claim now and allow the wife’s claim to play out over time. That strategy can help with cash flow challenges. [Can]

Loan from Third-Party. Some attorneys treat litigation loans as if clients were taking money from a cartel. I’m not in that camp. But the problem with litigation financing is that it’s expensive money to borrow. Clients are almost always disappointed at the end of the case that everyone else is getting more money. It’s human nature to forget that they got paid first. [Shouldn’t]

Loan from Attorney. In some states attorneys can loan money to their clients. Not in Washington. It’s verboten. [Can’t]

All of this is made a lot more complicated where a child has been injured and the parent is feeling the financial strain. A lot of the options discussed here aren’t available to parents. That makes it a lot harder for them to ride out the storm.