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The famed investor Warren Buffett threw his lot in on settlement reform recently.
The Omaha, Nebraska, billionaire Warren Buffett, Chief Executive Officer of Berkshire Hathaway Inc, shared his thoughts on structured payments for personal injury claims.
The Wizard of Walnut Street opined recently that a lump sum payment is not always the best way forward for personal injury lawyers. Considering his expertise in the field of international and personal finance, it is advice litigants– and their attorneys should heed. Let’s explore the advantages of structured payments and whether it benefits claimants with Ehline Law and our personal injury attorneys.
As of December 2022, the market value of Berkshire Hathaway is around $695.85 Billion, putting Warren Buffett on the list of the richest people in the world. Buffett’s enormous wealth comes from investing in blue chip companies like Coca-Cola, Kraft Heinz ketchup, Verisign, and many others.
Warren Buffett, the largest shareholder of Berkshire Hathaway Specialty Insurance Company, stated that anyone settling a personal injury claim should consider a structured payment as it can stretch the funds for future needs and is a tax-free income. His insurance companies lead the market in providing structured settlement annuities for claimants.
There are several advantages of negotiating a structured payment with the insurance company after winning a personal injury claim, and these include the following:
After reading about the advantages of structured payments, is it the right option for you? It depends.
It is important to note that Warren Buffett is one of the board members of many financial institutions. Berkshire Hathaway owns Wells Fargo, and he continued to defend the American multinational financial services company amidst scandals that harmed millions of Americans.
Buffett told the National Structured Settlements Trade Association about the benefits of structured payments for claimants and praised the US economic system. He owns an insurance company and has often highlighted his love for insurance companies and insurance float.
An insurance float is a difference between the premiums collected and the claims paid out, and it is the largest contributor to his net worth, putting him next to tech genius Bill Gates. Buffett uses insurance float as leverage to invest in other companies, ensuring a strong balance sheet and happy investors.
Structured payments help ease the financial burden on insurance companies, and they get enough room to leverage the capital to profit from it.
Warren Buffett’s support for structured payments should not be the grounds for claimants to strike a structured payment settlement with insurance companies.
Claimants must reach out to their experienced personal injury attorneys and discuss such matters with them rather than follow what a business tycoon says.
Every case is unique, and structured payments may not be a great option compared to lump sum payments for many injured victims.
Reading Buffett’s statements reaffirms my long-held beliefs. In my decades of experience, I’ve seen some clients who would be better off with lump sums. However, many won’t consider a long-term structured settlement. For families struggling with the lengthy effects of a severe injury, having the means to pay the bills is key. Furthermore, being able to pay for rehab and other medical bills is paramount. Heck, that is often the most significant determinant in how we develop settlement estimates.
The recent press covered Buffett’s statement. In this, the famed investor discussed the long-term implication of settling a major lawsuit. He also threw in his own company’s experience with the topic.
“Anyone settling a personal injury claim should seriously consider a structured settlement as part of their plan for financial recovery. Structured settlements can stretch settlement funds by providing tax-free payments for lost income, medical bills or other future needs, which delivers tremendous long-term security for injured people and their families. Berkshire Hathaway is proud to be a leading provider of structured settlement annuities.”
Every lawsuit is different. In addition, there is no substitute for the advice of your own lawyer. The advice below is based on over 20 years of experience, but your individual case may have variable circumstances. Do not take the below as firm legal advice.
The Affordable Care Act, enacted by the federal government and signed by former president Barack Obama in 2010, is a landmark legislation that reduced the number of people in the United States without health insurance. But the main challenge, even with such legislation, is dealing with insurance companies.
Our attorneys have more than 15 years of experience handling insurance companies and negotiating fair settlements for our clients. If you suffered injuries in an accident due to another’s fault, contact us at (833) LETS-SUE for a free consultation on your case.
Michael is a managing partner at the nationwide Ehline Law Firm, Personal Injury Attorneys, APLC. He’s an inactive Marine and became a lawyer in the California State Bar Law Office Study Program, later receiving his J.D. from UWLA School of Law. Michael has won some of the world’s largest motorcycle accident settlements.