Motorcycle accident cases can often be settled for the entire insurance policy much more quickly than most car accident cases. But what happens when you agree to settle your case?
As an example, your motorcycle was struck by a car with a $300,000 insurance policy and you have a broken wrist. You receive a call from your lawyer advising that the insurance company has offered to settle your case for the full $300,000 insurance policy.
You decide to accept the settlement offer, so now what? Now, the insurance company will require you to sign a release. The release permanently releases the owner and driver of the car, which means you can never (unless fraud was committed) seek any more money for your injuries from the owner and driver of the car.
After you sign the release, your lawyer will send the release to the insurance company and wait for the insurance company to send the settlement check. The insurance company will only send a settlement check to your attorney.
We send the release by fax or email. We usually receive the settlement check within 7-10 days after sending it.
If your case was settled after a lawsuit was started, New York State law C.P.L.R. § 5003-a, requires that the insurance company send the settlement check within 21 days (including weekends) of the date of making a “tender“, the date the the release and stipulation of discontinuance was personally delivered to the insurance company or mailed by registered or certified mail.
The 21-day period applies to non-governmental defendants. If the defendant is a municipality such as NYC or any public corporation, it is allowed 90 days to pay.
C.P.L.R. § 5003-a governs actions (cases in suit), so if a lawsuit is not been filed by the time a case is settled and the insurance company fails to make timely payment, it may be possible to start an action by the purchase of an index number and filing a motion.
The penalty for failure to make a timely payment is 9% interest plus court costs.
11 NYCRR 1.1(1) (COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK) requires that if the settlement check is more than $5,000, the insurance company must send you a letter, on the same day they send your settlement check, advising that they sent the settlement check to your attorney. If you receive a letter from the insurance company advising that they sent the settlement check to your attorney, then your attorney will have received your settlement check within a day of you receiving the letter.
After your attorney receives the settlement check, you will either have to endorse the back of the check or sign a power of attorney allowing your lawyer to endorse the settlement check for you.You may have signed a power of attorney at the same time you signed the release.
Your lawyer will deposit the settlement check into an escrow account called an I.O.L.A. account (Interest On Lawyer Accounts). Because settlement checks are out-of-state checks for large amounts, it can take up to 10 days for the bank to clear your settlement check.
After your check clears, your lawyer will deduct case expenses, legal fees, and issue a check to you for your net settlement. We are usually able to issue the settlement check to our client in 3-7 business days after it is deposited in our I.O.L.A. account.
If you have been hurt in a New York motorcycle accident, please call Phil Franckel, Esq. immediately, hopefully before speaking with any insurance company, for a free consultation, at 1-800-HURT-911.