Having a Strategy: Plan Ahead for the End of Your Disability Period

If you get a load of money, a major windfall either from the settlement with the driver's insurance or in court, there are generally two things you can do with it in my opinion.  If you have the discipline to save it or some significant portion of it, and you don't have any dire need to spend it, then by all means sock it away for retirement or a big purchase such as the down payment on a home.  If you have been constantly behind the eight ball though with high credit card balances and bills piling up, and particularly if you're prone to squandering money, then if you are going to blow it then blow it on debt relief.

Personally, I was somewhere in between.  I had student loans I could never seem to catch up on, and in the past year I had bought my first car, which was financed with fairly outrageous terms.  So day one I killed off two student loans completely--gone, a tremendous weight off my shoulders.  Day two, I paid off that car loan in cash.  Between the student loan and car payments I would no longer be making I reduced the amount that I would be paying out monthly by over $700.  That's over $700 more cash, in my pocket, every month--or well over $8,400 per year.  It's like giving myself a raise.  By paying off the auto financing only six months after I bought the car, I also saved myself over $8,000 over the next four years--so now we are up to well over $10,000 a year that I get to keep in my pocket over the next four years.  No more worrying about missing a payment or two on my car due to a period of belt tightening, or not having a car to get to better job opportunities and places to live (and enjoy cycling of course), the car is mine.  And no more student loan officers chasing after me.

Of course I had a decent amount of money left after that, and decided that it would be best to buy things which I was going to need to buy eventually anyway.  I had some broken down old furniture which I bought used and never intended to be permanent to my life which I replaced.  I finally bought my wife a decent bookcase, and I bought some electronics which were very reasonably priced.  I also was able to buy my wife a trip to visit her family and friends back home--in a foreign country--without it being a real belt tightener.

But then there are the unexpected expenses of Disability that you should set aside some money for, and when you think you have enough to tide you over, think again.

In my case, once I was approved for Social Security Disability I received a lump payment back to June--when my Long Term Disability insurer started paying on my claim.  That meant that there were thousands of dollars in overpayments to me as the Social Security Disability payments reduced the amount of my benefits from MetLife.  Since I didn't want this to drag out so that I just ended up under the gun with them for years to come, I told them to keep the money they would have otherwise paid me until the overpayment was settled.  That was two and a half hard months and at the end of it I didn't have much left other than what I invested--but it was worth it.

And it seems as soon as you have some money, people are coming at you from all sides to take it.  I can't go into the details, but you might literally need a bit of a war chest for the messy period between the end of your Disability period and being employed again.  You cannot count on your employer fulfilling their legal responsibilities to rehire you or even to not literally penalize you for being disabled; they may act illegally counting on the fact that you do not have the money to hire a lawyer and fight for your rights, or that you may be ignorant of what your rights are.  In any case, you should assume that at the end of your Disability period, you will most likely need to find another job.  Even global mega-corporations can get very petty, making it seem like you went AWOL even though they have been made well aware of the physical impossibility of you doing your job for some time.

Bottom Line, on the positive side: Look at the long view.  This is probably a once in a lifetime event for you, you will get past it, and ultimately you will have the benefit of having used that windfall you received in Liability money to your maximum long term benefit and having your injuries treated as best they could be.

My goal at the end of all this is that my knees and spine will be even better than they were before I was hit.  After all, I just had a major overhaul done, not only physically, but financially as well.  So long as you're smart about how you manage your Disability period, your physical treatment and recovery, and your financial stability, ultimately everything is going to be as good or better than it was before.

Settlement with the Insurance Company of the Driver Who Hit Me

I reached a settlement with the insurance company of the driver who hit me for all but 5% of the full liability limit on the policy--which is $100,000.  The lawyer gets a third and there is an additional few hundred dollars taken out for fees related to filing against the driver and their insurance company for liability in court.

That may seem like a lot of money, and in fact some of my able bodied friends even commented, "Sounds like it's worth it!"  Trust me, it's not.  If someone proposed paying me far more than that to get hit by a car, lose my job, go through multiple surgeries, do all the paperwork I've had to do, not do the thing I love to do best for a year, go through at least a year of physical therapy, and have to build my strength back up from zero, I would spit in their face.  

This is not a reality show.  I was really injured, and I have had a hell of a lot of pain and suffering.

So then you might wonder why I settled for the limit of the insurance rather than take the driver and Utica to court considering the fact that my case is worth $300,000 at the minimum.  The main reason is that I don't have job security.  I had only started in my new job one week before getting hit, and as predicted going out on Disability immediately afterwards means there really is no way I will be able to return to it.  Let's just say the environment at work was not kind to the freshly disabled, even with a number of board certified surgeons swearing I was unable to perform my job (or even get to it) due to my injuries.  Bottom line: If I took them to court, I would be looking at winning the case probably two or three years later, and even after I won it would be a fat chance that I would ever see money from the driver who hit me.  If I had been in my job for several years, and knew I could return to it at the end of all this, no doubt I would have taken the case to court.  Likewise, if they offered me even $20,000 less I would have taken them to court.

Here's how it went.  The driver was served about two months earlier, and given a deadline to respond.  If she or her insurance carrier did not respond by the deadline then that would mean a decision in my favor automatically.

Like I wrote in an earlier post, Utica had blocked out all the surgical facilities in advance of my second knee surgery.  The strategy there was to not only avoid paying for the surgery, but to not pay the liability.  If I didn't fight the whole way, I could have ended up with only the left knee having been reconstructed, having my right knee and back disabled for life, and getting paid a small fraction of the liability money for pain and suffering that I had coming to me.  Since I did have the surgery, they then had to face the fact that they were in for a large amount, and it would cost them more to fight it than to simply pay up.

First they wanted to try offering me $70,000 but they knew I was a professional who was going to fight so they offered $90,000 which is just $10,000 short of the policy limit.  How do I say no to $90k? I did knowing that my case is worth at least $300k.  They were literally nickel and diming me.  But I also understand the pressure someone in insurance is in to get even a small reduction.  Giving them 10% would be like me paying them a service fee, and I wasn't willing to do that, so I instructed my lawyer, Robert S. Fader (link below), to tell them we needed the whole $100,000.

Utica's response was ridiculous.  Their representative said they were only authorized to offer $90,000 and that simply wasn't true.  If the policy limit is $100,000 then that's what they are authorized to offer you in a settlement.  They talked to their supervisor and came back in less than an hour with $95,000 and I agreed immediately.

Honestly, later on I regretted not going back one more time and telling them we need the entire $100k or we're going to court.  It's only 5% but on the other hand it's $5,000.  I finished off one of my student loans for about $4,300 and paid off about $700 in credit card balances--so there's an example of where I could have used another $5,000 right there.  And it wasn't like I didn't deserve it for my injuries.  Ultimately, if I pushed more, I may have ultimately accepted $95k without regret, but I do regret that I didn't give it that one last little shove.

OK, so like I said, I only saw about $63,000 of that money after paying the lawyer and court fees, and that still seems like quite a lot of money, but it isn't.  Consider what you would do if you won that much money--after taxes--in a lottery.  Sure, you might dream of world travel and a fancy car, but if you were smart like I am, you might catch up on buying some items that you really needed anyway, treating yourself just a little bit, paying off the car you already have, killing off some if not all debt that has been hanging over your head and never seems to go away.  And that's exactly what I did--with money left over of course.

Day 1, I immediately paid off my car loan.  Had I chosen instead to just make the regular payments through the end of the finance term, I would have paid $7,000 more for the car.  I also paid off a couple of student loans, as well as all credit cards.  By doing this--no exaggeration--I just reduced the amount of money I pay out in bills by over $700 per month. That's $8,400 a year that will stay in my pocket without the interest on it going to various financial institutions!  I don't know about you, but to me that's quite a chunk of money.

Basically, anything that has an interest rate on it needs to be paid off right away before you can even think about having any fun.  Just do it.  But also consider this before you settle your case against the driver and their insurance.  After you do whatever you need to do with the money, including paying the lawyer and killing off debts, is the amount that is left worth it to you given what you have had to go through with your injuries and all you have had to do to get it?  

In my case, I have to say the answer is no, but I balanced it against waiting another two or three years to settle this case for the amount of money it would receive in court, and then fighting to collect it.  The benefit is, I'm done and I have the resources to get me through to the next stage of my life, which may include a whole new career (or returning to the old one I liked so much) and relocation for all I know.