Thursday, January 28, 2016

Top Five Questions to Ask Before Hiring a Personal Injury Lawyer?

After being in a car accident, you may be faced with the task of finding the right lawyer for you. To help you guide you through the process, here are the 5 Top Questions to ask an attorney in your personal injury case:  

  •    Will you be the actual person handling my case?
At some larger firms, during your initial consultation, you will have a quick meet and greet with your lawyer, yet never see them again. During your first meeting, ask who will be your contact? And ask who will be the person handling your case? Many firms will route you to the paralegal, even if you would like to speak with your attorney on a certain issue. Make sure that you have access to your lawyer when you need them.

  •     What is your contingency fee?
Most personal injury lawyers will not require you to pay for any attorney’s fees out of your pocket. The typical fee ranges from 25-50% of the ultimate recovery. You are paying for an attorney’s skill and competence. Don’t just go with the cheapest lawyer out there. You want the best lawyer, not the cheapest.

  •    Will I be responsible for any costs?
In addition to the contingency fee arrangement, there will be a section concerning costs. In every case, there are costs associated with bringing a personal injury claim. This can range from fees your lawyer is charged to get your medical records, to the filing fee if a lawsuit needs to be filed. Ask who will pay these costs up front? Most attorneys will pay these costs up front and recoup these costs at the end of your case.

   •    What percentage of your practice is devoted to personal injury cases?
Many lawyers have a main practice area and just do personal injury on the side. Depending on your case, these lawyers may not have the experience to properly handle a personal injury case. You have the right to know your attorney’s experience in handling personal injury cases.

   •    Do you have the time necessary to actually work on my case now?
Some lawyers try to get as many clients signed up as possible. However, they don’t have the time or staff necessary to work all of their cases. Especially if their main focus is a different area of law, their personal injury cases may get put on the shelf. Make sure your lawyer has the interest and time to devote to your case.

Next time, we will discuss a recent Nevada Supreme Court case on employer’s liability for acts of its employees.

Wednesday, January 20, 2016

Are Personal Injury Settlements Taxable?

Since tax time is near, I thought providing you with information on whether personal injury settlements are taxable was in order. After being in a car accident and having received a settlement, you may be wondering if you have to report that money to the IRS as “income”. The short answer is: NO (BUT, there are exceptions where do have to report the income). In a typical car accident claim, you will be awarded monies for bodily injury and related pain and suffering, that you may have sustained as a result of the accident. In this scenario, which usually happens in your standard car accident claim, you will not have to report your settlement as “income” to the IRS. However, there are some exceptions to this general rule. 

The first exception applies if you have taken itemized deductions for medical expenses in recent years on your tax return. If  your medical expenses have been so high in the past, that you itemized those bills on your tax return, you MUST report your personal injury settlement to the IRS. If this is the case, you should consult with a licensed tax professional, to make sure you are following all IRS regulations. 

Another exception to this rule is if you received money for lost income. Money received for lost of income, as part of a personal injury settlement, needs to be reported as income and is taxable. 

If your case went to trial and you were awarded interest on your personal injury settlement, then the interest you received is also considered income. You will have to report this “interest” to the IRS as income.

The final exception to the general “no reporting” rule, is if you received punitive damages as part of your injury award. The IRS is entitled to tax any punitive damages you may have received.

In most cases, you will not receive an award for punitive damages or interest. So as long as you don’t also get an award for lost income and have not taken a recent medical expense deduction on your tax return, your personal injury settlement is not considered taxable income for the IRS. If you have any doubt as to whether your settlement is taxable, you can always talk to your tax professional or your personal injury attorney. 

Next time, we will discuss the top five questions to ask, before hiring a personal injury lawyer.

Monday, January 11, 2016

Does My Health Insurance Company Get Reimbursed In a Las Vegas Car Accident?

With the passage of the Affordable Health Care Act, almost everyone can get health insurance now. However, if you have been in a car accident and have health insurance, there are some things to keep in mind. First, you should know that if you are taken to the hospital after an accident, there may three separate bills related to your accident treatment:
    •    Ambulance bill;
    •    Hospital Bill; and
    •    Doctor at the Hospital (Doctors are usually not employees of hospitals. As a result, they send out a separate bill, over and above what the hospital charged you. This usually comes as a shock to most people.)

In most cases, your health insurance company will pay for your emergency, car accident related, medical bills. However, your health insurance company may ask that you pay the health insurance company back. They will ask you to pay them back out of the settlement proceeds from your personal injury case. This concept of paying money back to the insurance company is called ‘subrogation’.  

Nevada law allows for health insurance companies to ask your accident attorney for reimbursement (subrogation) if you have a group health insurance plan: 

Every policy of group health insurance must contain a provision which reduces the insurer’s liability because of benefits under other valid group coverage. To the extent authorized by the Commissioner, such a provision may include subrogation. {emphasis added}. NAC 689B.180 was NRS 689B.034

Except as otherwise provided by specific federal or state statute or regulation, an insurer may include in a policy of group health insurance issued pursuant to chapter 689B of NRS a provision for subrogation regarding the right of an insured to recover, ... from a third person for the cost of medical benefits reimbursed by the insurer to the insured because of injuries incurred by the insured as a result of the actions of the third person.
{emphasis added}.  NAC 689B.180

There is a notable exception to this reimbursement (subrogation) requirement. The exception is that if you were not “made whole” by the at-fault party, then your health insurance company cannot seek to get its money back from you. 

In Canfora, the Nevada Supreme Court adopted the “make-whole” doctrine, stating “[t]he make-whole doctrine ‘is a general equitable principle of insurance law’ that prevents an insurance company from enforcing its subrogation rights before the insured has been fully reimbursed for their losses.” Canfora v. Coast Hotels and Casinos, Inc., 121 Nev. Adv. 76, at pg. 9-10 (Citing Barnes v. Independent Auto. Dealers of California, 64 F.3d 1389, 1394 (9th Cir.1995). This happens when you have not received compensation for your total loss, i.e., “have not been made whole.”

Even though your health insurance company may seek to be reimbursed for health insurance benefits it paid on your behalf, your car accident attorney will make sure they are following the law and that your rights are protected.

Next time, we will discuss whether personal injury settlements are considered taxable income to you.