My car was hit by an ederly driver found at fault by the police. My
girlfriends knee was injured. No broken bones, but cartilage damage
and psychological effects from the accident. Should I trust the
insurance company to ante up with a fair monetary offer for medical
bills and pain and suffering, or should I hire a lawyer and risk
losing a third of the offer? If so, why?

Your girlfriend needs to consult with an attorney that represents her
(that is, the attorney is paid by her) before signing anything. Her
rights to sue in the future will most likely be abrogated with a
settlement. You may need your own representation as well, as she might
be able to sue YOU for damages in the future.

Didn't think of THAT one, didja? The couple of bucks it costs is well
worth it. Some lawyers will even do an initial consult for free.

And did you actually write the words "Should I trust the insurance
company"? I have a beautiful bridge that runs between lower Manhattan
and Brooklyn for sale; are you interested? Oh, and I am also the
former Nigerian Grand Poobah trying to get $100 million out of the
country and need your help, for which I will pay you thirty bajillion
dollars. Additionally, I will buy that bike you advertised on
Craigslist for ten bucks and pay with a Western Union wire that is
$3500 more than your asking price if you just send me the overpayment
back
in a money order.

Hey, Mark, keep it simple:  lol, but it detracts from the value of
your suggestion - IMHO (being one similarly inclined  ;)
Myoarin

Thanks for the advice, other than the tongue in cheek comments about
my naivity. du u thunk i m stoopid or summthin?  lol thanks again,
i've got a lawyer on the line as i write this... wish us luck. my then
girlfriend is my fiance' now - so hopefully things won't go south...

YES YES YES. Get the attorney. THey will let you pay once your case is
settled. Dont trust that insurance company. they lowball offer to shut
people up and push stuff under the rug. Also, it would be a good idea
to leave the file open for a while, (meaning) dont sign off when the
attorney tells you they have reached settlement. I made that mistake
and still have pain/psych suffering from an accident i had back in
2000 becuase of a erradic taxi cab driver. Your Fiancee could have
pain and suffering that lags on or appears long after the sports
medicine/therapy people work their magic. This is just my two cents.
The lawyer will work to get you as much as he can because of the 1/3
cut thats in it for him.

Thank you asweetangelseyes, I have an appt set up next week. Thanks to
all of you who responded. I just had to hear it from others to confirm
my own skepticism.