By Lawrence E. Mittin, Esq.
When a person is injured in a car accident, the clock starts ticking for the insurance company for the at-fault driver to try and settle with the injured person before the person even speaks to an attorney. Insurance companies pay so much more when a lawyer gets involved, that they race to try and settle with the injured person. This type of fast settlement before an injured person can speak to an attorney is called a “cash-out.” Insurance companies have been doing cash-outs for years, but companies would set a limit as to how much they were willing to pay without proof of any medical bills and records. That limit was normally between $500-$1,500 without any documentation. If people were not hurt, normally they would take such a cash-out amount. If people were injured or had gone to the hospital, they would reject such cash-outs and realize that to protect themselves, they needed to speak to an attorney before engaging in any further discussions with the insurance company.
In 2025 though, there has been a change in the cash-out process. Some insurance companies have decided to offer injury victims a great deal more money as a cash-out to stop them from speaking with an attorney. Many are better offers than insurance companies make when a person undergoes treatment for a few months. The offers seem to defy common sense, as the companies are not even asking for copies of medical records and bills. The companies are just throwing a settlement offer out to the injured claimants and many people are just taking these cash-outs rather than first speaking with a lawyer. These cash-outs occur before accident victims know the full extent of their injuries or even the amount of their hospital bills, as the companies try to do these cash-outs within a week or two of the accident date. If you go to a hospital or urgent care after an accident, your medical bills are normally not even processed until about a month after your visit. So many people who accept these cash-outs are doing so even though the hospital bills could be more than the cash-out amount. The adjusters who handle cash-outs are the best salespeople in the claims departments at these insurance companies and they want to close the sale/get a person to settle before that person has spoken to an attorney.
So with insurance companies now offering more money for cash-outs, the question becomes what are the pros and cons of taking a cash-out rather than first speaking with a lawyer before you decide to negotiate with an insurance company for an injury claim. To begin with, most people think that because the insurance company may not be recording the conversations, anything said to the insurance company cannot come back to harm them if they decide to reject a cash-out offer. This belief or assumption is incredibly wrong. The adjusters read from a script and everything you say is noted in the file. You are essentially engaging in an interview with the enemy, as the goal of all insurance companies is to pay injury claimants as little money as possible. Once the insurance company gets you talking, whether on the phone or via text/email, you have given the insurance company information without guarantee that you will get anything in return. The more you talk to the insurance company, the more power you give the insurance company to dictate the terms of any negotiation.
After the insurance company has this… Click to Continue
