Saturday, April 29, 2006

Like Winning the Lottery, Part II

HER: “I saw an ad for this house for only $87,000.00. And then we’ll have to get a new car. After we are moved in and settled, we’ll fly to…”

ME: “Hold on a minute. You’re spending quite a bit of money for two people who have no income.”

HER: We’ll get it from the insurance company for the car accident. The attorney said we could count on a settlement of at least $250,000.00. And there is this company that will advance us money on the settlement and I’m going to get $150,000.00 now and…”

In my yesterday’s post, Like Winning the Lottery, Part I, I wrote that being injured in an automobile accident can be, to some people, a lucky mishap—rather like winning the lottery. I suggested that, in part due to the adverting of some personal injury attorneys—statements such as “We’ll get you everything you desires” and testimonials such as “Attorney ______________ got me a $300,000.00 settlement"—some people see being injured in a accident as a stroke of good luck. I suggested that being the "victim" of such an accident opens us to one of the most destructive of all aspirations: greed. People begin to get expectations of unearned wealth that will purchase for them all that they have dreamed of: huge houses, expensive cars, the good life without needing a job, etc.

The conversation with which I opened this post never happened. However, it could have. It represents dreams that many Americans share: a home of our own; a car; lifetime security. And I would like to suggest that these dreams do not necessarily represent greed; they may also represent need, especially for those who live in poverty and are the most vulnerable members of our society. That includes those folks who Karl Marx identified as the permanently disenfranchised sub-proletariat: the perpetually unemployed.

Have you ever been in a store or gasoline station waiting in line to make a small purchase while person after person ahead of you each purchased lots of lottery tickets? Have you ever noticed how many of these people appear to be poor? I believe that lotteries prey on the poor. They promise great wealth, which seduces those who have difficulty making ends meet. And studies have shown that poverty-stricken folks gamble more of their incomes on the lottery than any other group in our society.

Do you understand the odds of winning a lottery? In a Kentucky State lottery where you have to select eight numbers, your odds of winning are 1 in 171,200,862,756. If you want to check those odds (or any other lottery odds), go here and calculate them yourself. Those impossible odds are why I suggest that for many people being injured in an automobile accident feels as if they have won the lottery—especially with the expectations of big cash settlements from insurance companies.

Many people believe that insurance companies are “fair game” when seeking for huge settlements. I am no more of an expert on insurance companies (having only just passed two the state insurance exams) than I am on the law. However, as I wrote yesterday in regard to people’s expectation of huge settlements when they have been injured in an accident, “The reality is: it just ain’t always true!”

The purpose of insurance is to remedy a loss. When one is injured in an automobile accident, one has losses: damage to one’s vehicle; perhaps medical and hospital expenses; lost wages from not being able to work. The purpose of insurance is to financially make up for those losses—to bring the condition of the person and their property back to where it was one second before the accident. With certain limitations, insurance will pay to repair or replace the damaged property; compensate the person for lost wages when he or she was unable to work; pay the hospital and medical expenses. The purpose of insurance is not to reward the person who injured with money to fulfill their dreams—even if they were not a fault in the accident.

Yet many people get the idea that if they are going to get a lot of money out of insurance companies. And, although I have read none that promise a windfall of big buck, some of the advertisements could seem to imply that, even if they do not.. For example, testimonial of the woman who said “Attorney ______________ got me a $300,000.00 settlement.” What she doesn’t say is that her losses amount to $300,000.00. And that’s the rub that makes expectation of big bucks from being injured not like winning the lottery.

I may write again on this subject in the future. However, for now, I believe I have said enough.


  1. The other thing those ads don't point out is that lawyers typically take a third of the settlement as their fee. Unless the lawyer got them a third more than they could have got on their own, they actually lose money by going to court.

  2. Exactly! Why would lawyers do this sort of thing out of the goodness of their collective hearts???

  3. As an attorney in a trial practice, I can tell you tat the conversation you imagined has occurred amny times before and will continue to occur many times in the future. I will say, however, that in most cases when a case actually gets tried and goes to a jury, the jury keeps things fairly low. Setlements are where the plaintiff's bar makes its money. And those companies that advance money in anticipation of a settlement are a complete rip=off and should be avoided except in extreme cases.