Woodland Hills Personal injury attorney Barry P. Goldberg has seen insurer trends over the past three decades of representing injury victims. Early in his days of practice, insurers often utilized the “Drop Check” to attempt to side track negotiation and to settle cases cheaply and quickly. The “Drop Check” is a tactic whereby the insurer seizes on the perceived need (or greed) of the accident claimant by simply handing them a check, mailing them a check or “dropping a check off” (that’s where the tactic got its name!) Regrettably, we are seeing more and more “Drop Check” cases and we expect this trend to increase even more during the Holidays when financial need is the strongest.
We see this tactic most frequently when there is clear liability, significant impact and “pre-lawyer” hiring. Most insurers do a fairly decent job of settling the property damage claims quickly. In that discussion process, an accident victim may state that they need medical attention but do not have the financial resources to see a doctor. The insurance adjuster uses a little sleight of hand and tells the accident victim that a check for between $1,000 and $3,000 can be issued immediately and then the victim can seek his or her own medical care. Usually, a victim does not realize that it is in return for a full release.
Another particularly insidious “Drop Check” scenario that has come on the scene is that the insurer will simply “transfer” money into the victim’s checking account. If the victim uses the money or a significant time passes, the insurer contends that this constitutes a “binding settlement.” I was recently consulted in a serious case and it was a major insurer that was attempting to utilize this new form of “Drop Check.” When I spoke to the claims supervisor to ask whether the victim could use this money without a signed release, he said that the insurer would consider this a “binding settlement!” I immediately returned the money to the insurer on the client’s behalf. As it turned out, the case may be worth some 50 to 100 times the amount “Dropped” into the victim’s account.
Finally, on more standard auto cases, we are seeing insurers do an “initial” evaluation of a bodily injury claim and simply sending the amount of their first “offer” in a check along with a release. The insurer is banking on the attorney to “lose track of the case, and forward the release to the client and deposit the check as soon as possible. The insurer may insinuate that this will be the only offer. The insurer may also be counting on both the attorney’s greed and the client’s pressing financial need. We see these “Drop Checks” in particular just before Christmas. Do not try to convince me that this is a coincidence!
If faced with a “Drop Check”, my advice is to send it back to the insurer immediately with a strongly worded response that the offer is rejected and that the tactic probably violates Insurance Code section 790.03(h) and will be reported to the Insurance Commissioner as an unfair claims tactic. Most accident victims will benefit by having an aggressive advocate and by receiving full and fair compensation rather falling for the ‘Drop Check” tactic used by unscrupulous insurers!