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 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?
Because settlements are a compromise between parties, you must build your case to prove you deserve your desired amount. That means gathering supporting evidence, such as prescriptions, medical records, doctor’s notes, witness testimonies and photos. You must also send the other party a demand letter that explains the extent of your injuries, the damages you want to pursue and your claim.
Expect the other party’s insurance company to thoroughly investigate your case and circumstances, gathering evidence of its own. Say the insurance company agrees that you have a case. If so, the two of you work together to compromise on a settlement amount. Even if the insurer denies your claim, you likely have the option of appealing.
On a related note, you may wonder how long you can expect to wait before the other party returns to the negotiating table with a counteroffer. Unfortunately, such legal matters can take longer than you would like for them to. This is especially true if you have outstanding medical bills piling up and must take time off work to recover. You may have to wait weeks while your lawyer works with the other party to decide on a final settlement amount. The more extensive the personal injury and the more complications involved in the legal matter, the longer the settlement process can take. Even after settling, all parties must sign and process documents, which adds to the timeframe.
Should You Use a Settlement Calculator?
To get a general idea of how much you stand to gain (or lose) from your personal 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 and 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 opportunity. General damages examples are loss of enjoyment of life, pain and suffering, disfigurement and loss of companionship.
Medical treatment compensation requires special focus in 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 own health insurance policy for your personal injury treatment, your coverage provider may put a lien on your settlement for the amount it already covered.
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 personal 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 personal 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!