Finance, LEGAL

How Are Personal Injury Settlements Paid Out?

When an accident occurs, the victim can often seek compensation for their expenses through the defendant’s insurance company. However, getting a settlement check takes some time.

You can receive your settlement as a lump sum or through scheduled, structured payments. Most personal injury cases are settled through settlements rather than trials.

Legal Fees

When you have a severe injury from someone else’s negligence, you will need compensation to pay your medical bills and cover other expenses. It is also common to lose wages due to an injury, and this can add up quickly. The insurance company may offer you a settlement to avoid a costly trial.

You will need a personal injury lawyer to help you with your case, and most lawyers work on contingency fees so that they only get paid when they win the case. This helps injured victims by making hiring an attorney affordable and giving the lawyer an incentive only to take cases with merit.

If you settle for a lump sum, your lawyer will receive one-third of the total settlement amount as compensation for their services. The amount of compensation you can obtain for your personal injury lawsuit is determined by the damages involved.

In addition to your medical expenses, a successful personal injury claim will include compensation for the pain and suffering you have experienced. However, it can be challenging to calculate this amount, and it will typically differ from case to case.

Many people who file personal injury claims are tempted to accept lowball offers from insurance companies because they want their money quickly. However, it’s important to remember that insurance companies do not represent your interests and are only interested in protecting their shareholders. A reputable personal injury lawyer will fight hard for you to receive a fair settlement offer and help you answer how are personal injury settlements paid out.

Medical Expenses

If you are injured in an accident, the other person or business responsible for the accident should be required to pay your losses (referred to as “damages”), and part of those damages is typically the cost of any medical treatment needed. If your injuries are severe and long-lasting, those expenses may be costly.

If your health insurance company or government medical program paid your bills before you received a settlement, they might file a lien to claim some or all of that money back. Your attorney will work with the lienholders to minimize the amount they seek.

Your personal injury lawyer can also help you with any future anticipated medical costs due to your injury. Those costs are often called “special damages” in the legal jargon.

The other medical expense that could be included in your recovery is the loss of any income you might have lost due to your injury. Your attorney will work to calculate the amount of any lost income and seek compensation from the other party if appropriate.

It is important to remember that the goal of any personal injury settlement or jury award is to make you whole again. That includes covering your medical expenses, out-of-pocket and other case fees, and attorney’s fees.

Other Expenses

Many personal injury settlements include compensation for other damages, including pain and suffering. These damages compensate the plaintiff for emotional and physical suffering related to their accident. This can be anything from the embarrassment caused by an embarrassing situation to long-term physical and mental hardship due to a severe injury or disease.

This is an area where settlements can get complicated. Depending on the case, some pain and suffering may be taxable. For example, if the settlement includes money to compensate you for your pain and suffering over and above a dollar amount meant to cover your medical bills, this portion of the award could be considered income. In addition, any part of a settlement that covers punitive damages is also taxable.

Another thing to remember is that several other expenses, including medical liens and additional out-of-pocket costs, such as various court fees, may reduce your settlement. Health insurance does not typically cover these expenses but can be paid through a settlement.

Finally, it would be best if you consider your preference for a lump sum or structured settlement payment. A lump sum pays you your entire settlement in one check, while a structured settlement allows you to receive payments over time. Both methods have pros and cons, so talk to your attorney about what makes the most sense for your needs.

Settlement Amount

The final settlement amount depends on several factors, including available insurance coverage and your medical needs. Insurance companies are more likely to provide a more significant settlement offer if your injuries are permanent or disabling. This settlement can assist in paying for ongoing treatment and compensate for the loss of potential earnings. It’s important to consider how your accident has affected your daily life and the amount of pain and suffering you’ve endured. If you need help determining how your damages will be assessed for a fair settlement, a personal injury lawyer can help you understand. The primary categories of special damages are economic and non-economic, and your lawyer can explain the difference between the two to you. Economic damages have a cost, such as medical expenses and lost wages, while non-economic losses, like pain and suffering, are challenging to quantify.

When your settlement has been agreed upon, the defendant’s insurance company prepares a check for you to sign. The check will be made out to both you and your lawyer, and it may take a few weeks for the check to be sent to you once all other settlement paperwork is filed.

To get the best outcome, it’s advisable to wait to accept the initial settlement offer from the insurance company. Typically, the initial offer is much lower than what you should receive for your claim. Your attorney will work with the insurance company to reach a more favorable conclusion for you.