Jan 4, 2019 | 3 min read

Does Disability Insurance Coverage Affect the Amount I Can Receive From a Personal Injury Case?

Negotiating an insurance settlement is almost always complicated. One consideration is whether injured person has sources of income and financial support other than what he or she may receive through the at-fault party’s insurance policy.

So, yes, receiving disability insurance benefits while pursing an insurance claim for a car or truck crash, slip or fall, dog bite, defective or dangerous product, or medical malpractice can affect the amount of the final settlement. The key word being “can.” As North Carolina personal injury attorneys, my colleagues and I advocate for our clients to obtain maximal settlements.

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Accident victims have access to several types of disability insurance, and these can provide essential support while a personal injury claim progresses through negotiations or goes to trial. Depending on decisions made before the accident and the circumstance under which the accident occurred, North Carolina residents can claim one or more of the following:

Short-term disability insurance is typically available through one’s employer. Think about those Aflac or Unum ads that run during sporting events. In return for small deductions from each paycheck, a person gains access to partial wage or salary replacement during any period of up to 6 months or a year that he or she must take time off work without pay. The benefits usually get paid regardless of the cause of the short-term disability, and getting hurt or falling ill at work is not required to collect on a claim.
Long-term disability insurance can be purchased along with an employer-sponsored health insurance policy or obtained on the open market. The main thing that distinguishes a long-term disability from a short-term disability is its duration, with any physical or mental condition that keeps a person out of work for more than 12 months being considered long-term. This type of coverage typically applies to medical expenses, including nursing home care.
North Carolina workers’ compensation benefits can be claimed (though not always secured) by most people who suffer work-related injuries or develop occupational illnesses while engaged in job-related activities in the state. The program is designed and operated like a form of short-term disability insurance. Medical coverage and settlements for amputations or partial disabilities are available to some claimants, but the focus is on income replacement. Also, workers’ comp recipients are generally expected to return to work at some point.
Social Security Disability Insurance or similar programs operated by public and private pension plans are available to people who can no longer work due to an injury, illness, birth defect or genetic condition. Qualifying for benefits is usually difficult, and the amount paid to beneficiaries each month rarely covers all living expenses for housing, food and utilities.

The final sentence of the capsule description of the Social Security disability program tells the whole story about how receiving disability insurance payments affects personal injury claims. An insurance claim for an accident victim is based on the person’s need. Adding up doctors’ bills, ongoing health care expenses and the loss of income and earnings capacity — to say nothing of legally available compensation for the infliction of pain and suffering — yields a total far higher than disability insurance could ever pay. For that reason, North Carolina personal injury lawyers work hard to ensure that receiving disability insurance benefits either does not lower settlements or has a very minor affect.

EJL