Victims of personal injury can be quickly overwhelmed by medical bills, lost wages, and other expenses. After attending to injuries, contacting a personal injury attorney to attain fair injury compensation should top their “to-do” list. In the meantime, bills need to be paid. Many people enlist the help of crowdfunding sites, such as GoFundMe.
But will donations received from a crowdfunding site affect a PI claim? Insurance companies have eyes on crowdfunding campaigns. Some may lower their settlement offers since you’re receiving some compensation elsewhere (minus the percentage owed to the crowdfunding site). Some states forbid this practice, but regulations vary from state to state. Postings and photos will be scrutinized by insurance companies as well to challenge your claim.
Funds collected from crowdfunding sites for medical bills are generally considered “personal gifts” and not income — if certain stipulations are met. If those aren’t met, the IRS might deem the funds personal income, which can complicate a PI claim. In some scenarios, a bump in income could also affect Supplemental Security Income and Medicaid benefits.
Here’s a situation to be mindful of, too, as presented by a PI attorney from Tennessee. Someone is injured by a negligent driver with no auto insurance. The victim incurs $35,000 in medical bills, but their uninsured motorist policy limits are $25,000. They start a GoFundMe account to collect the remaining $10,000. In Tennessee, all that does is deduct $10,000 from what the insurance company pays ($15,000 instead of $25,000), and the victim still owes $10,000!
Bottom line, if you are injured due to another person’s negligence, always contact your PI attorney before proceeding with a crowdfunding account. Our firm stands ready to help.
