What You Need to Know About “New Money”

One thing that was quite confusing to me personally was why everybody (lawyer and insurance company) kept on saying this word “New Money”. And even when our lawyer explained what this concept, it took a little while to figure out what it really meant.

Basically ‘New Money” means that the offered amount is what you will get. If a settlement offer is made of $20,000 you will get $20,000 from the opposing side. However, you still have to deduct from this amount your lawyer fees and expenses. So, the insurance company is saying I will not ask for the cost of medical bills or any other expenses they have already paid. Basically, if they have paid $5,000 of medical you will not get only $15,000 ($20,000-$5,000) like you would if you went to trial and received a court decision.

SO BE AWARE: IF YOU GO TO COURT YOU DO NOT GET “NEW MONEY.”

But honestly I think this terminology is just another tactic to confuse the honest, innocent, common people.

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