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The Insurance Adjuster Said… (A Continuing Series)

Thursday, December 4, 2014
You will receive notice that the insurance company has issued your check

If you have been injured in a car accident, then it is likely you have had several unpleasant conversations with an insurance adjuster for the person who hit you.  You may remember that I posted here about these types of conversations.

Worried Senior Hispanic Woman Checking Mailbox

After you have hired your lawyer, I have said before that you will not hear from the adjuster again.  You can read about that here. Indeed, it is one of the benefits to hiring a lawyer sooner rather than later. But that is not 100% true.  In fact, there is potentially one other time when you will receive a letter directly from the insurance adjuster, right after your case settles.

The General Assembly enacted Code § 38.2-236 which requires upon payment by any insurer of at least $5,000.00 in a single check to a Virginia attorney, the insurance company must send you a notice of such payment.  The notice must have the following language which is quoted from the statute:

“Pursuant to § 38.2-236 of the Code of Virginia, you are hereby notified that a payment was sent on (insert date on which payment was sent) by (insert name of insurer) to your attorney or other representative (insert name, address, and telephone number of attorney or other representative known to insurer), in satisfaction of your claim or judgment against (insert name of insurer, or insured, whichever is appropriate). If you have any questions, please contact your attorney or other representative.”

In our experience, since this statute went into effect, the insurance company will send this notice to you immediately upon issuing the check. Once the letter arrives clients often ask if that means that they can stop by and pick up the check.  The answer is generally no and this results in confusion. This is not unusual.  In fact, you may have received the notice before your attorney received the check, especially in cases that are in active litigation. In those cases, the insurance company will send the check to their attorney who will draft a release and dismissal order and send all three to your attorney at the same time. The statute, however, requires that the insurance company send you the notice directly “upon payment.” To be safe, the insurance company will interpret that to mean, when I cut the check, payment is made.

Once your attorney receives the check, it has to be deposited into a trust account and it has to clear the bank; then you have to sign a release and send it back to the insurance company.  This usually takes about a week.

This notice is designed to protect those who have been injured and that is a good thing. Make sure that you openly communicate your expectations to your lawyer, and ask him or her to explain the intricacies of settling a personal injury case.  This will benefit you as you navigate this new experience.

Posted by Brandon S. Osterbind, Esq.