Is it true that the state has a $2500.00 limit to pain and suffering settlement for children?

What the adjuster says is true but misleading. Settlements for children in amounts exceeding $2,500.00 must be approved by the court. The rules allow for settlements below $2,500.00 to be done without court approval as the amount is so small there is not much risk that there will be an injustice done to the children. Court approval is easily obtained, and the insurance company will hire an attorney to file the proper paperwork to bring it before the court for approval. Whether it is $2,500 or more, it is the children's money and must be held in escrow until they are 21, except that it can be used to pay their medical bills. The only limit in your case is the insurance coverage limit (ie. How much insurance the at fault diver has). Do not settle for $2,500 just to avoid the process of the court approving the agreement. That would be foolish. Also, it sounds as if the claim is complicated enough, and the damages are such, that you should retain an attorney.