Coming to a settlement agreement in a personal injury case is quite revitalizing for you and your attorney. You might have undergone a challenging personal injury trial or an exhausting negotiation with the insurance firm.
But before you receive your settlement funds, you must undergo another process. So, how are personal injury settlements paid out? Here is everything you need to know.
I’ve Won My Case-How Are Personal Settlements Paid Out?
A typical misconception about settlement negotiations with insurance firms is that the process comes to an end after reaching an agreement.
But that’s not how case settlements for personal injury are closed. You still have some more steps to complete before finally setting your hands on the payout.
1. Signing the Release Form and Vital Legal Paperwork
Once your attorney is done negotiating a settlement with the other party, you will be issued an Order of Settlement document.
The two parties, basically you and the defendant, have 30 to 60 days to fill out and submit the paperwork linked with the Order of Settlement document. The deadline will be based on the legal request of the court.
The release form is the most crucial piece of paperwork in the Order of Settlement. It concedes that you accept the settlement and ‘release’ the defendant from any further legal claims.
In fact, it is the defense lawyer who prepares the release form so they can establish the terms and conditions of your legal settlement.
Your attorney will review the Order of Settlement to ascertain that these terms and conditions are in your best interest.
2. Insurance Company Processes and Issues the Settlement Check
It is the defendant’s insurance firm that compensates you. Keep in mind that the insurance firm will only approve compensation after receiving the release form and ascertaining that it is free of errors.
The company is legally obligated to process your payout within a reasonable timeframe. Typically, it should take three weeks or less to process and mail your settlement check. But sometimes processing problems can cause a delay in the delivery of the settlement check.
If represented by a personal injury attorney, the check will be sent to them directly. If your attorney fails to receive the check on time, they follow up with the insurance firm to know the cause of delays.
3. Attorney Deposits the Check to Pay Liens
When your attorney receives the settlement check, he or she deposits it in an escrow account and awaits bank clearance.
The money remains in the escrow account until all your financial obligations are fulfilled. You could be having due medical bills, health insurance premiums, as well as legal fees and expenses. All these debts are paid off before you receive the legal settlement check.
At this stage, your attorney works hard to get you discounts. They take time to negotiate with your health provider or insurance company, so you don’t end up paying more. That’s why your settlement check might be considerably delayed.
4. You Receive the settlement check
You will receive the remaining balance in the settlement check payout once all liens and legal fees have been taken care of by your lawyer. The attorney might meet with you to hand over the settlement package or mail it to you.
You may then credit the settlement check into your bank account like you would with any other check. The bank teller might ask questions, or need for authorization from the management if the amount is huge, so be ready.
Personal Injury Settlement Amounts Examples
Settlement amounts for most personal injury cases range from $3000 to $75,000. But that doesn’t mean settlements cannot go beyond this range. Settlement amounts vary in accordance with the case and evidence linked with it.
Your attorney might try their best to negotiate the best compensation for you. Still, such factors as the severity of your injuries, your medical documents, time taken off-work, and out-of-pocket expenses will determine your settlement amount.
Have a look at the average personal injury settlement amounts below:
- $145,000 for a hit and run accident.
- $225,000 for a car vs. bicycle accident
- $11.7 million for a wrongful death case.
- $11.5 million for assault.
- $800,000 for food poisoning.
Evidently, the settlement amount can go pretty high, but it all depends on the particular case and circumstances surrounding it.
How Do Personal Injury Settlements Work?
How does personal injury settlement work? That’s a common question from victims of personal injury who wish to seek compensation.
Well, before a personal injury claim can go to trial, the involved parties have to decide on a settlement. The insurance company of the person who caused the accident compensates the victim in two ways:
a) Lump-sum payout
A lump sum payment gives you the flexibility to reinvest the cash in a way that meets your investment objectives.
While a lump sum payout is free of tax, profits from any financial investment are subject to taxation. Furthermore, with a lump sum settlement, your funds are not subject to periodic economic inflation.
b) Structured Settlement
A structured settlement doesn’t release all of your money in one go, so you have no legal mandate to reinvest it. Luckily, a certified structured settlement agent may tailor a suitable asset like annuities to meet your present and future monetary needs and even those of your family.
It’s entirely up to you to choose how to receive your payout. Either way, lump sum settlements are the best for an accident victim as it sorts all your liens at once and is not subject to inflation.
Structured payouts benefit the payer more than you. So, if offered a structured settlement, consult with your attorney straightaway.
Your attorney’s greatest job is building a good case and negotiating terms in your favor. But their job is not finished until you receive the compensation.
You receive the settlement payout once all paperwork has been signed, your personal injury attorney has cleared and deducted due liens and legal fees.
Do you still have inquiries about your settlement? Be sure to talk to our personal injury attorneys at Legal Giant for further help. Call us today for a free consultation.