If you’ve suffered an injury due to someone else’s negligence, you’re probably wondering how personal injury settlements are typically paid out. It’s obviously understandable that you’d ask the question, since your medical bills are piling up and you’re getting concerned. This article will give you a good idea of how payouts typically work.
How personal injury settlements are typically paid out
Personal injury settlements can be paid out in a variety of ways depending on the nature of the settlement and the parties involved. Here are some common ways payouts occur:
- Lump sum payment: In this type of payment, the party responsible for the settlement pays the entire amount owed in one payment.
- Structured settlement: A structured settlement is an annuity contract that allows the settlement amount to be paid in installments over a period of time. This can be a good option for settlements involving children or a large sum of money, as it can provide long-term financial security for the injured party.
- Trust fund: A trust fund can be established in some circumstances to hold the settlement funds and distribute them to the injured party over time. This is often used for settlements involving minors, those with disabilities, or individuals who may have difficulty managing a large sum of money.
Who is paying the settlement?
In a personal injury settlement, the payment usually comes directly from the responsible party’s insurance company, depending on the terms of their insurance policy. For example, the at-fault party’s liability insurance company will send one check for the full amount of the settlement and it is up to your personal injury lawyer to disburse the funds.
It’s important to note that in some cases, the responsible party may not have the resources to pay the settlement in full. In these situations, the parties negotiate to come up with a payment plan or other arrangement that satisfies all parties involved. In those cases, the settlement may need to be paid out over a period of time or through a structured settlement or annuity.
How will my lawyer disburse the funds?
In general, your lawyer will deduct any outstanding legal fees and expenses related to your case, which may include court fees, expert witness fees and other costs associated with pursuing the claim.
If you received any medical treatment on a lien, those medical providers will then be paid. The exact amount that will be paid to satisfy the lien will depend on the terms of the lien and the settlement agreement. In some cases, the lien may be satisfied in full, while in others, the lienholder may agree to accept a reduced amount.
Once these expenses have been paid, the remaining funds will be disbursed to you or to the appropriate parties as outlined in the settlement agreement.
What are some of the factors that go into determining how much my settlement will be?
The amount of a settlement is typically determined based on a variety of factors, including:
- The severity of the injury: The more severe the injury, the higher the potential settlement amount. For example, a person who suffered a permanent disability as a result of an incident may be entitled to a larger settlement than someone who suffered only minor injuries.
- The degree of liability or fault: If the responsible party’s actions were particularly egregious, or if they were found to be completely at fault for the incident, the settlement amount may be higher.
- The cost of medical treatment: The cost of medical treatment and ongoing care can be a significant factor in determining the settlement amount. This can include expenses such as hospital bills, rehabilitation, and therapy.
Other factors that may be considered in determining the settlement amount include the location of the incident, the age of the injured party, and the extent of insurance coverage available.
What happens after both parties agree to a settlement?
Once an insurance company pays a settlement, the case is usually considered resolved. The payment of the settlement is typically made to the injured party or their legal representative, and the insurance company’s obligation is fulfilled.
In most cases, the settlement agreement may require that the injured party sign a release of all claims against the responsible party or their insurance company, which would prevent them from bringing any further legal action related to the incident. This is designed to provide finality and closure to the case. It’s highly recommended that you consult with a personal injury attorney before accepting any settlement agreements or signing any releases.
Contact Johnson & Groninger PLLC to learn more
Speak with our skilled personal injury attorneys in Charlotte for more information regarding personal injury settlements. Connect with us online to schedule a free consultation, or you can reach our Durham office at (919) 240-4054 or our Charlotte office at (704) 200-2009.