After a successful personal injury claim, it’s common to wonder how personal injury settlements are paid out. When someone is injured due to the negligent actions of another person, party, or organization, they can file a personal injury lawsuit with the assistance of an experienced personal injury attorney. If this personal injury claim is successful, the victim will be eligible to receive financial compensation for their injuries.
This compensation generally covers various things related to the accident, such as medical expenses, lost wages, and compensation for the victim’s pain and suffering. A personal injury settlement may also include punitive damages, which are applied to discourage other individuals or businesses from acting in such negligent ways.
But even once you’re awarded your personal injury settlement, there are still matters to be resolved. As the victim of a personal injury accident, you should be concerned about when you’ll receive your settlement and how the personal injury settlement pays out exactly. In this blog, we’re answering these questions and more to help you understand the intricate process of a personal injury payout.
Here at the Paul Wilkinson Law Firm, we are dedicated to defending the rights of anyone involved in a personal injury accident. Whether you were in a car accident, truck accident, pedestrian accident, or motorcycle accident, we can help you understand your case, estimate its full value, and represent your interests in court. Even if you believe that you’re partially at fault, give our team of experienced attorneys a call. We’ll do everything it takes to ensure you receive fair compensation for your injuries.
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What is a Personal Injury Settlement?
Let’s start from the beginning: what is a personal injury settlement? Essentially, a personal injury settlement is a type of financial compensation paid out to the victim of a personal injury suit. A personal injury suit is filed when you’ve been injured by the negligent actions of another individual, organization, or business. Common personal injury claims include car accidents, truck accidents, motorcycle accidents, slip and fall accidents, defective products, and more.
For most personal injury claims, the settlement amount is negotiated between the parties and their representatives outside of court. Generally, this will include the insurance company for the defendant and a personal injury lawyer for the claimant. In these high-stakes negotiations, you don’t want to enter alone without the support of a legal professional.
Personal injury attorneys are skilled negotiators who know how to work with insurance representatives and other lawyers. Working with a personal injury attorney dramatically improves your odds of receiving fair compensation for your injuries. It should come as no surprise that insurance companies will often try to “lowball” a settlement.
These are still for-profit companies at the end of the day, right? When an insurance provider refuses to offer fair compensation, this is referred to as bad faith insurance. A personal injury attorney can accurately assess fair compensation for your injuries to protect your rights.
How are Personal Injury Settlements Paid Out?
When a settlement is agreed upon by the claimant and the at-fault party, they can then progress to the actual payment process. Of course, the specific details of the case and the ability of the parties to negotiate will impact the process. While some may be resolved quickly, some can take weeks or months. If a resolution is never reached, your personal injury claim may be forced to go to trial.
The procedure for paying out on a personal injury claim may vary in a few ways. However, the majority are usually paid out in one of two types of personal injury compensation: through a single lump-sum payment or through a structured settlement. The difference in lump-sum payment vs. structured settlement mainly comes down to how much of the settlement is paid out at once.
1. Lump-sum payments: This personal injury settlement payout option involves just one payment as a settlement check that encapsulates the entirety of the settlement amount. Many individuals will prefer this type of payment method because it allows you to quickly pay off your medical debts, attorney fees, and other related bills so that you aren’t straddled with excessive debts for longer than you need to be.
There are some additional options for what to do after receiving a personal injury settlement. Some will even use any remaining money to invest in an interest-bearing account. This enables you to actually increase the amount of money from your settlement over time. You may also use it to pay off other bills or allow you to make a personal investment like starting a business or going back to school.
2. Structured settlements: The second method for paying out personal injury settlements is through a structured settlement. This method involves receiving your financial compensation in monthly payments over an agreed-upon amount of time. During negotiations, you’ll also determine the beginning date and the end date for your structured personal injury settlement payout timeline.
In many cases, a structured settlement will involve an initial lump-sum payment and then smaller payments recurring from month to month. This helps claimants pay off any intensive medical bills or attorney fees. Many people are surprised to learn that you can also earn interest on structured settlements. Learning how to manage a personal injury settlement, allows for these payments to increase overall and help keep up with factors like inflation.
Alternatively, there are times when a large lump-sum payment is made later on in the lifetime of the settlement. This will be determined during settlement negotiations. This usually occurs when younger children are the victim of a personal injury accident. They may receive smaller payments month-to-month during childhood, but then choose to receive a larger lump-sum payment when they hit adulthood when there are more opportunities to use this compensation.
There is also the option to receive monthly, quarterly, or annual payments depending on your financial needs and preferences. However, each payment option comes with its own tax implications for personal injury settlements.
Conclusion – How are Personal Injury Settlements Paid Out?
A personal injury settlement is paid out to an individual who has been injured by the negligent actions of another individual, business, or government organization. During the negotiation phase, both parties will generally agree on a fair settlement amount to cover the injuries (this is why you want an experienced personal injury attorney who knows how to negotiate a personal injury settlement). Once the amount has been agreed upon, you’ll usually receive either one lump-sum payment or a structured payment over time.
If you’ve been involved in a car accident, motorcycle accident, truck accident, or any other type of personal injury accident, our team of experienced personal injury attorneys can help. We can work closely with you to understand your case and assess its full and fair financial value. If needed, we’ll even fight for you in court.
When you call Paul, you’ll receive immediate attention and the support of our full resources. We’ll meet with you on your schedule to begin learning about your case, researching key details, and assessing your options. At the Paul Wilkinson Law Firm, we operate on contingency fees. What does this mean for you? We only get paid if you do. That’s how confident we are in our legal services.
Contact us today to schedule your free consultation. We look forward to learning more about your case and helping you receive the justice and compensation that you deserve. Simply give us a call at (303) 333-7285 to receive legal help today.