After a personal injury trial ends, the victim receives a settlement check. How that money is paid out depends on several factors.
Claimants can choose to receive a lump sum payment or structured payments. Lump sum payments are more common as they provide compensation all at once. On the other hand, structured payments offer financial flexibility by paying out amounts over a designated period.
Medical Bills
When a person suffers an injury due to someone else’s negligence or recklessness, they typically file a personal injury lawsuit seeking compensation. However, settling a claim is an option that can help reduce the legal costs associated with a lawsuit and can get compensation to the injured party more quickly.
How are personal injury settlements paid out? Personal injury settlements are usually paid out as either a lump sum or structured payments. The injured party will choose which option suits their needs and lifestyle best. A lawyer can provide a clear breakdown of the different payment options and what each will cover.
Once the injury victim has chosen how to receive their settlement, they can expect the insurance company to write them a check once they have received a signed release and other required forms. However, delays in this process can occur for several reasons, including clerical errors and other factors.
After any outstanding medical bills or liens have been paid, the remainder of the personal injury settlement will go directly to the injured victim. A portion of the settlement may also be reserved to pay a legal fee for the injured party’s lawyer, as most lawyers work on a contingency basis and only get paid a certain percentage of the final settlement amount.
The remaining money can be invested or spent as the injured party sees fit. The injured party can work with their lawyer to develop a strategy to invest their settlement funds.
Lost Wages
Injuries can disrupt life in several ways. In addition to the immediate issues of paying bills and managing medical care, many people experience financial hardship due to loss of income while they recover.
Loss of income, also known as lost wages, is considered a special damage in personal injury lawsuits. This category of damages has clear monetary value, which makes it easier to judge in a court of law.
When calculating lost wages, a lawyer will total the amount of money a person would have earned in a given period before their injury. This can include salary, overtime, vacation pay, and 401(k) contributions. Depending on the severity of an injury, future lost wages may also be considered. This is an area where the input of a skilled forensic economist can come into play, as the calculation can become very complex when dealing with permanent disabilities and disfigurement.
Once a settlement has been reached, the plaintiff will receive their check from their attorney. They can choose to receive their settlement in a lump sum or in a structured arrangement over time. They can also choose to have their settlement paid through a trust account so that it cannot be touched until the damages are all paid in full. Once the settlement is received, it may be necessary to file taxes.
Pain and Suffering
Pain and suffering is the part of a personal injury settlement that covers non-monetary costs associated with an accident. This includes physical discomfort as well as emotional distress like anxiety and insomnia. These damages exceed the amount awarded for lost wages and medical bills.
Assigning a dollar value to pain and suffering is difficult since every accident and injury can affect everyone differently. However, the amount can be based on the extent of the injuries and how they have affected your day-to-day life. This could include the impact on your relationships, social life, and ability to perform daily tasks, such as work or play sports.
When it comes to documenting your pain and suffering, it is important that you follow your doctor’s advice and start as early as possible. This will ensure that you have adequate evidence to support your claim. It is also a good idea to visit a therapist for any emotional distress related to the accident.
There are various ways to calculate pain and suffering, but a jury makes the final decision. One popular method is the per diem or daily monetary payment, which pays a specific amount for each day the victim suffers from their injury until they reach maximum medical improvement (the point at which their injury is expected to improve). Other methods can be used, such as the multiplier method, which involves calculating the total value of the victim’s economic damages and multiplying it by a variable, typically ranging from 1.5 to 5. In some cases, a higher variable will be assigned to severe injuries.
Damages
You’ll receive a check for the settlement amount after you and your attorney negotiate with the other party’s insurance company. You can choose to accept a lump sum or structured payments.
A personal injury settlement is designed to compensate you for your losses and injuries. The purpose is to make you “whole” again. While monetary compensation cannot completely restore your quality of life back to what it was before the accident, it can help you pay for medical bills, lost wages, property damage, and pain and suffering.
Many cases settle out of court, saving both parties time and money. Many factors influence settlement amounts, and your lawyer can explain what the various components of your case might be worth.
Once an agreement is reached on how much you are owed, executing the settlement can take weeks to months. You’ll receive your payout once the paperwork is completed and the other party has signed all settlement documents. Before you receive your money, your attorney will deduct any costs of bringing the case to settlement (such as court fees and expenses, requesting medical records, making copies, and sending correspondence to the insurance provider). These are costs that can add up quickly.
