Coming to a settlement agreement with the insurance company is not the end of a personal injury lawsuit. You must wait for the settlement check, and it must be distributed according to your debts. It is important for you to know how personal injury settlements are paid out and what to expect in the weeks and days ahead.
How Long Will It Take to Get Your Settlement Check?
The facts of each individual case will influence how long it takes for your insurance company to send a settlement check. Insurance companies are limited to deadlines and time limits under state law.
Some states give insurance companies fifteen days to research a claim and deliver an acceptance or rejection. Insurance companies may extend this time limit in some states to 45 days if they assert reasonable grounds and a valid explanation. The insurance company must mail the check within five business days if the claim is accepted.
It may take two weeks for you to receive your settlement check once the insurance company has mailed it out. The insurance company may be guilty of delaying the payout in bad faith if you do not receive a check within the time limit.
Structured Settlement or Lump-Sum
You get to decide how your settlement check is paid out to you. Choosing between a structured settlement and a lump sum may be difficult for some injured parties to do on short notice. If you choose to receive the settlement amount as a lump sum, that means you get your full settlement all at the same time in one payment.
A structured settlement pays out in installments over a long period of time. Parties who do not want to spend all of their settlement check at once may choose the structured settlement option. Parties choosing the structured settlement may want to use the structured settlement to pay bills for years into the future.
Medical Bills and Liens
After you receive your settlement check, you may realize that several different parties may be entitled to a percentage of your award. The hospital where you were treated for your injuries may have a medical lien against your settlement check.
The hospital will automatically receive a portion of your settlement to pay off your medical debts. You may also have to pay mechanics liens, health insurance liens, and employer liens that could apply to your settlement amount. You may be able to negotiate the value of the liens with the assistance of your attorney.
Legal and Attorneys’ Fees
Once you pay off the liens, you will have to use your settlement check to pay outstanding legal expenses and attorneys’ fees. Personal injury attorneys usually operate on a contingency fee basis which means that you don’t have to pay anything until you receive a financial award.
Once you receive your settlement check, then you will pay your attorney a specified percentage for the total amount of the attorney’s services. This amount will depend on your specific agreement with the attorney. After you pay off every lien and debt, the remaining portion, which usually consists of the part of the settlement you receive in pain and suffering damages, belongs to you.
How Is a Settlement Check Taxed?
After you pay off your medical bills, liens, and attorneys’ fees, you will need to address the issue of taxes. You may have to pay taxes on a portion of your financial award in the same tax year in which you received the settlement check.
As a general rule, the federal government does not tax injury settlements as income. A punitive damages award is subject to taxation. You may also be required to pay taxes on a settlement for medical expenses if you deduct these expenses during a previous tax year.
Can I Reopen a Claim Once It’s Settled?
When you settle a claim and receive your settlement check, your case is over, and it does not linger on a docket or in the legal system. You are not permitted by law to reopen a case or enter into additional negotiations with an insurance company for a different amount.
You need to make sure that your settlement is an acceptable amount of financial compensation. Do not accept a settlement offer that you believe is less than what you deserve. You need to have adequate legal representation to enable you to focus on obtaining the amount of financial compensation you deserve.
You cannot reopen a claim if your injuries intensify or if a more serious medical condition develops after settlement. Insurance companies will require that you sign a release of the claims to have a document in writing stating that you cannot reopen the legal claims against them.
Before any settlement funds are distributed to entitled parties, the injured party must sign a form releasing the liable party from any future claims for the same accident. After all the necessary forms are signed and submitted, then the compensation award will be released to your attorney’s trust account. The settlement funds cannot be released to you until every expense related to your case has been paid.
Every Car Accident Personal Injury Case is Different
Each accident victim will experience the legal system differently, and the time from filing a complaint to settlement will differ. Two people who experience the same type of injury will still have different periods of time in which they are in a hospital or recovery center. The two people will also have different physical and cognitive impairments due to their injuries.
The time needed for recovery will also differ between the two patients. One injured victim may need to spend six months in the hospital, while another injured victim may need to spend only two months in the hospital.
While one injured victim may be unable to work for more than one year, another injured victim may be able to return to work six months after an injury. Each injured victim will not require the exact same type of rehabilitative therapy or physical therapy.
One injured victim may be permanently disabled, while another injured victim is not disabled. Also, two victims will not experience the same kind of emotional impact that is a result of the automobile accident.
The total amount of your settlement check will be based somewhat on the averages of other settlements and resolutions for comparable incidents in the same geographic location.
How Long Does The Disbursement Process Take?
The length of time it may take to receive your financial compensation can depend on many different circumstances, but many settlement payments are paid out within a few weeks. Many delays can occur due to the waiting period for the responsible party’s insurance company to issue a payment or because of communications regarding medical liens.
You need to make sure that you understand how the disbursement process works, so you are not surprised regarding your financial award. Paying out the medical bills, liens, and attorneys’ fees is necessary for you to receive your portion of the settlement proceeds. You may need to analyze the particular details of your case and review them with an experienced personal injury attorney to make sure you receive the maximum amount of financial compensation you deserve.
Call an Austin Personal Injury Attorney Today
If you have suffered injuries in an preventable accident, you should retain a lawyer as soon as you can. To schedule your free case evaluation with one of our Austin injury attorneys, call us today at (361) 400-2036.