Why Legal Funding Companies Fund Insurance Claims

The Role of Legal Funding Companies in Insurance Claims

Legal funding companies provide a valuable service to individuals trapped in lengthy insurance claim disputes. Often, claimants face financial hardship while waiting for their claims to resolve, a process that can take months or even years.

Legal funding companies step in and offer claimants almost immediate financial relief by advancing a portion of their anticipated settlement amount. This money can be used to cover day-to-day living expenses, medical bills, or any other urgent financial needs.

This type of funding is non-recourse, meaning that if claimants don’t win their case, they don’t owe anything back to the funding company. By investing in insurance claims, legal funding companies offer a safety net for individuals in distressing financial situations caused by unresolved claims.

Insurance Coverage and Legal Funding

For insurance legal funding, policy limits set the maximum for your case value. Often, as is the case with auto insurance, limits are expressed as two numbers. The first is a per-person maximum, and the second is a per-incident maximum.

For example, if you’re hit by a car with a $50k / $100k policy and have three passengers, all four injured parties are paid out of the $100k, with a $50k limit on the payout to any single party.

For most other general personal injury case types, insurance has a single limit (say, $1 million).

Sometimes, the policy includes umbrella coverage. Umbrella insurance coverage only kicks in once you exhaust the primary policy. Put simply, if you have more than $1 million in damages, and the policy is $1 million with an umbrella of another $1 million, the maximum case value may be as much as $2 million.

Assessing Insurance Coverage

Sometimes, policy limits are clear from the outset of a case. However, in other cases, you may have to wait until discovery after filing your case.

Unfortunately, if your case is not against a commercial policyholder, it can be difficult to get funding early on if you have serious injuries.

Thankfully, most states require minimum coverage. This means that if you know a party has insurance, you can often assume a baseline for coverage.

Legal Funding Companies Avoid Cases Directly Against People or Small Businesses

Even if you have a strong case against a person or business, or a judgment is in your favor, collection can be an issue.

First, the defendant may not have the assets to pay you. Second, they may decide not to pay for various reasons or file an appeal.

In any case, funding companies prefer predictable cases with a high likelihood of repayment.

Uplift Legal Funding

Uplift Legal Funding helps plaintiffs nationwide fight back against insurance companies with legal funding. If you or a loved one is in need of funding, apply online or give us a call at (800) 385-3660.

To learn more about the funding process, visit our How Legal Funding Works page.