You might be entitled to compensation if someone else’s negligence caused your injury. However, there’s often a long road to getting paid.
At Rob Levine Law, we understand that you’re likely facing financial stress after a personal injury. You want your payment as soon as possible, so it helps to know what to expect. Our attorneys break down the process below to give you peace of mind.
How Are Personal Injury Settlements Paid Out?
In most cases, you can expect to receive funds within two weeks after the insurance company issues a settlement check. Most settlements come in one of two forms: a lump sum or a structured settlement.
Lump Sum
A lump-sum settlement is a one-time payment. If you receive a lump sum payment, you’ll receive all your settlement funds upfront in one check.
Pros of a lump-sum settlement:
- Allows freedom to use your settlement as you desire, such as investing the funds
- Provides flexibility when large expenses arise
Cons of a lump-sum settlement:
- Requires more self-control and financial planning to prevent overspending
- Risks future financial instability if you spend too much too quickly
Structured Settlements
A structured settlement pays out your settlement funds in regular installments over time. The terms of a structured settlement can be flexible. You may receive monthly, quarterly, or annual payments, depending on your settlement agreement.
Structured settlement durations also vary. Some structured settlements last for a fixed period, such as 5, 10, or 20 years. Others provide income for the recipient’s entire life.
Pros of a structured settlement:
- Helps with impulse control to prevent overspending
- Provides a steady income stream for long-term financial stability
Cons of a structured settlement:
- Limited access to funds, which can be challenging when facing emergencies or unexpected expenses
- Unable to invest or grow the money as desired
- May affect your eligibility for public benefits such as Medicaid
What Is the Process of Negotiating a Personal Injury Settlement?
When you turn to our attorneys, we’ll build a strong case by investigating your injury and gathering evidence. We’ll then compile the details into a demand letter outlining our argument for liability and the amount of money we’re seeking. Our attorneys will submit the demand letter to the at-fault party’s insurance company and start negotiating a personal injury settlement.
During the negotiation process, our team will represent you in discussions with the insurance adjusters. We’ll present our evidence and advocate for the full compensation you deserve. We won’t back down when the insurance company tries to minimize your claim.
Once the insurance company offers a fair settlement amount, we’ll draft a settlement agreement. This document provides the settlement terms, including the type of payment and the timeline for receiving the funds. Further negotiations may be necessary for all parties to agree on the settlement’s terms.
Finally, both parties will sign the settlement agreement, resolving the case and preventing you from pursuing further compensation in the future.
How Are Personal Injury Settlements Distributed?
The insurance company will likely pay your settlement by check. Our lawyers may receive the check first and deduct our contingency fee. The contingency fee is a percentage of your total settlement amount, which allows you to receive legal representation with no upfront costs.
We may also handle the distribution of settlement funds to any other parties involved in your case. For example, your health insurance company may be entitled to reimbursement for any medical expenses it covered related to your injury. Health care providers who treated you while your case was pending may also have a lien on your settlement to cover their services.
After we take care of these distributions, the remaining settlement amount is yours to keep. We’ll forward the remaining funds to you as soon as possible so you can start rebuilding your life.
Are Personal Injury Settlements Taxed?
Each state has slightly different laws on taxing personal injury settlements. Under these tax laws, you may owe taxes on some types of damages but not others.
Lost wages resulting from a personal injury are generally taxable. That’s because you would have had to pay income tax on the money had you received it through normal employment. You shouldn’t owe taxes for other types of economic damages, such as medical expenses.
Punitive damages are also considered taxable income. You generally won’t have to pay taxes on non-economic damages, such as pain and suffering. However, some states tax emotional distress damages that aren’t tied to a physical injury.
What Influences a Personal Injury Settlement Amount?
The nature and extent of your damages are the primary factors that influence your personal injury settlement. You can seek compensation for any damages you suffer due to your injury. Common personal injury damages include:
- Past, current, and future medical expenses
- Lost wages for the work you missed while recovering
- Lost earning capacity for the injury’s impact on your ability to return to your job
- Disability-related expenses, such as home and vehicle modifications and mobility equipment
- Pain and suffering
- Loss of consortium for the injury’s impact on your relationship with your spouse
You may also receive punitive damages if the at-fault party intended to harm you or was extremely reckless. Punitive damages aim to punish the at-fault party rather than compensate you for specific losses.
Damage Caps
Some states cap personal injury damages at specific amounts. Damage caps usually don’t affect economic damages such as medical expenses and lost wages. If your injury occurred in a state with damage caps, the amount of money you can receive for non-economic or punitive damages may be limited.
Comparative Negligence
Additionally, if you’re partially at fault for your injury, your compensation may be reduced accordingly. Most states have comparative negligence laws that allow you to receive compensation even if you’re partially responsible. Many states only allow this if you’re less than 50 or 51 percent at fault, while a few allow compensation no matter your share of the blame.
The amount of money you can receive will be reduced by your share of the fault. For example, suppose your damages are worth $100,000 after a car accident. If you’re 20 percent at fault for the accident, your compensation would be reduced to $80,000.
Contact a Personal Injury Lawyer Today for a Free Consultation
You deserve a smooth and fair legal process if someone else’s negligence caused your injury. When you turn to Rob Levine Law, we’ll pursue maximum compensation on your behalf while you focus on your health.
With no fees until you win, let Rob Levine fight for you! Call us at (866) 692-8637 or contact us online for a free consultation.
