What Is a Personal Injury Settlement?
What Is a Personal Injury Settlement?
With most personal injury cases, insurance companies and injured parties prefer settlement negotiations rather than going to court for a trial. Did you recently take legal action against an at-fault party for a personal injury? You may wonder how much you should seek in your settlement and the factors that impact the final amount. Even if the responsible party and her or his insurance provider agree to settle, you should know what makes a fair offer and when to ask for more compensation.
How Do You Start the Personal Injury Settlement Process?
Say that your car accident, premises liability or another personal injury case involves medical bills, lost wages or pain and suffering. If so, you can sue the at-fault party so that you do not bear financial responsibility for another’s negligence. If the other party has insurance, the insurance company likely wants to settle out of court to avoid leaving the final settlement decision to a jury. Settlements benefit injured parties as much as they do insurance companies. This is because accepting a settlement means you receive compensation sooner rather than later. Also, by going to court, that means you risk not receiving any compensation at all.
How Do You Build Your Case?
To secure the settlement you want, you’ll need to build a solid case. This means gathering key evidence like medical records, prescriptions, doctor’s notes, witness statements, and photos. A demand letter should also be sent to the other party, outlining your injuries, the damages you’re claiming, and the compensation you’re seeking.
Expect the other party’s insurance company to conduct its investigation. If they agree you have a case, you’ll enter negotiations to settle on a final amount. Even if they deny your claim initially, you may have the option to appeal.
You might wonder how long it’ll take for the other party to come back with a counteroffer. Unfortunately, legal matters like these often stretch out, especially if you’re dealing with medical bills or time off work.
In many cases, you could be waiting for weeks as your lawyer negotiates with the other side. The more complex your case or severe your injuries, the longer the process tends to last. Even after a settlement is reached, finalizing paperwork can add more time to the resolution.
Should You Use a Settlement Calculator?
To get a general idea of how much you stand to gain (or lose) from your injury, you may use a settlement calculator. Online calculators only offer a rough estimate. You can plug in your medical bills, time off work, pay stubs, and similar information into the calculator. However, it is hard to determine the amount of your pain suffering, and emotional distress with a settlement calculator. In the end, while it is fine to use a settlement calculator for a ballpark figure, you and your case are better off not using such a calculator during settlement negotiations, because you have far too many other factors to consider.
What Are the Different Damage Types To Consider?
You must know which damages you may qualify for when determining a fair settlement amount. Damages are either special damages, sometimes referred to as “economic,” or general damages, sometimes known as “non-economic damages”. Examples of special damages include lost wages, medical treatment compensation, property damage, and lost income opportunities. General damages examples are loss of enjoyment of life, pain and suffering, disfigurement, and loss of companionship.
Medical treatment compensation requires a special focus on personal injury cases. For one thing, you must consider reimbursement for medical bills you paid out of pocket already and future medical treatment. If you use your health insurance policy for your personal injury treatment, your coverage provider may put a lien on your settlement for the amount it already covers.
Do You Have to Accept Any Personal Injury Settlement Offer?
You are free to reject any settlement amount the other party offers. You may feel the offer is too low. Or you may want the other party to take responsibility for the incident. Either way, you do not have to accept a settlement offer. No matter if you accept or reject a settlement, make your choice according to a sensible legal strategy.
How Do You Pay Your Lawyer?
One of the best ways to get a fair settlement for your injury is to work with an attorney. You can pay on a contingency fee basis, which means you only have to pay if you reach a settlement agreement with the other party or after you receive a favorable trial outcome. Most lawyers receive roughly 33% of the final settlement amount, but you may not have to pay that much if your agreement stipulates a lower amount should you resolve your case without suing. You may be able to negotiate the attorney’s fees.
Must You Pay Taxes on Your Settlement?
Yet another element to consider is that of taxes. If you did not claim medical expense deductions for your injury, then the IRS does not tax your settlement. Say that you claimed a medical expense deduction to reduce your tax bill. If so, you must list the settlement amount as “other income” for the next tax season. The IRS can tax any portion of your settlement intended as an interest payment, and the same applies to pain and suffering compensation. You can also expect to pay taxes on punitive damages.
Work With an Experienced Local Lawyer
Do you need experienced legal help to determine a proper settlement amount for your personal injury? Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations. Contact Aaron at [email protected] for article suggestions, collaborations, or inquiries.
