If you’re in an accident, you could spend months attempting to settle a claim with an insurance company. Then, you might discover the insurance company, in reality, has no intention of settling a claim. In that case, you might work with a personal injury attorney who will go over your options to secure compensation for your damages.
What some people don’t realize about personal injury claims is that the majority are settled.
What that means is technically a lawsuit isn’t even filed.
If a case can’t be settled through mediation or negotiation, then a claim would be filed, and it would go to court.
Some of the more complicated types of personal injury claims, such as product liability claims and wrongful death claims, are among the most likely to go to court.
A lawsuit could lead to more money than a settlement, but not always.
The Settlement Process
A settlement means that an insurance adjuster or the person or company you’re suing offers to pay you, as the injured person.
Situations where this might happen include:
- A settlement offer can be made before a lawsuit has been filed, but after there’s a possible claim that’s arisen.
- A settlement can happen after the filing of a court case and once a trial has started, as long as there isn’t yet a final verdict.
- Some settlements are reached after a trial during jury deliberation.
If you’re the plaintiff, after a settlement is reached, you have to give up all possible claims that could come up against the defendant from the accident or injury. You’re required to sign a release of full liability.
If you don’t agree to the liability release, you can recover the compensation offered in the settlement.
From the perspective of the insurance company, there are definitely benefits to settling. They don’t want to have to go through the unpredictability of a jury trial. Plus, it’s expensive to go through litigation for a personal injury case.
So after you’ve reached a settlement, how much money do you get actually get once it’s all broken down?
The fees owed to your attorney for their work is the first thing taken out of the amount of your settlement. Personal injury attorneys work on a contingency fee basis. That means they don’t get paid if you don’t.
Most attorneys’ fees are 33 1/3 percent of a settlement. If a lawsuit is filed, that goes up to 40%.
Fees vary, but those are the most common rates.
Some expenses are separate from an attorney’s fees.
Expenses are those things that are needed by lawyers to work on your case, like the cost of getting medical records, copy charges, and postage fees.
If you end up filing suit, the expenses can go up quite a bit.
Then, once those things are paid to your lawyer, the following represents the final charges taken from your settlement amount.
Medical Expenses and Liens
If you have outstanding medical expenses or lines, these are taken out of your settlement amount.
These can come from Medicaid, Medicare, or health insurance liens. It might also include liens with your own car insurance carrier for treatment you receive following an accident.
Hospitals, doctors, and government agencies can recover the amount you owe for any treatment.
What’s left after those medical expenses are paid is what’s considered the settlement to cover your pain and suffering and also possibly your wage loss.
Your attorney will likely negotiate on your behalf with medical companies to reduce what you owe them, so you take more money away from your settlement.
It can take months to come to a settlement with an insurance company.
Settlement agreements usually don’t start until you’ve completed any treatment for physical or mental injuries resulting from the accident.
A release of all claims form will be part of your settlement agreement, as was touched on above.
This document agrees to resolve differences between the parties, dismiss the claims, and releases the opposing party from liability. These forms can also be called liability waiver forms.
Before the insurance company makes a payment, you’ll have to sign the form.
The form will need to have details about the accident, your claims as far as bodily injury and property damage, identification of the parties, paying, and any details regarding governing laws. You need to ensure your settlement covers all the damages before you sign a release of all claims.