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How are personal injury settlements paid out?

One of the most common questions we receive from our clients is, “How are personal injury settlements paid out?” The following is an overview of personal injury settlements and how they’re paid in different circumstances. 

how are personal injury settlements paid out

When you work with an Albany personal injury lawyer with Shrable Law Firm, you can rest assured that you’ll receive expert legal representation. We know how to negotiate fair and equitable settlements, and we’re ready to put that knowledge to work for you. Schedule a free consultation by calling (229) 349-6291. 

The basics of a personal injury settlement

If you’ve been in a car accident caused by another driver’s negligence or are hurt in another type of accident that was someone else’s fault, you can file a personal injury lawsuit against them.

The liable party will be responsible for compensating you for the damages and financial losses you suffered from the accident. Many personal injury lawsuits are settled out of court, however, some go to trial and a jury determines the amount of the award.  

Who pays?

Who pays depends on a number of factors. Generally, the liability coverage that covers the vehicle the at-fault party was driving will pay first. In some instances, there may be several layers of liability coverage that can increase your recovery. An attorney can locate the other liability coverages.

If there is no liability coverage or not enough liability coverage to fully compensate you for your injuries, you may be able to recover from your own insurance company through uninsured or underinsured motorist coverage. Again, you may be covered under one or more policies of uninsured or underinsured motorist coverage. An attorney can locate those other coverages to maximize your overall recovery.

How settlement funds are distributed

You’ll typically have two options regarding the funds you receive: you can get it all at once in a lump sum, or you can agree to a structured settlement, where funds are dispersed over time.

It’s recommended that you speak with an attorney and possibly a financial advisor to determine which option is best for you. 

Costs that could potentially reduce the amount of money you receive

It’s important to understand that although you’ve been awarded a certain sum or reached a settlement, the entire sum won’t be deposited into your bank account. The check will often be written to your attorney, then some costs must be paid before you’re given the remaining amount.  Some of the costs that will be subtracted include the following:

  • As per your attorney-client contract, your attorney will receive a predetermined percentage of your settlement.
  • If you received medical treatment under an attorney or medical lien, the doctors or providers who treated you will be paid from your settlement for the care they provided.
  • If not included in the percentage your attorney will receive per the contract, court costs can also be taken out. These could include court reporter expenses for depositions, subpoenas fees, court transcripts, and more. 
  • While your “compensatory damages” (medical bills, lost wages, pain and suffering, etc.) aren’t subjected to taxes, there are some portions of your settlement that could be. For example, if you deducted the costs of your medical treatment when filling out your income tax forms, that amount could be taxed. You may also need to repay health insurance and pay a Medicare or Medicaid lien.
  • If you obtain punitive damages, those will be taxed because they’re designed to punish the defendant, not to compensate the victim for their negligence. Although these won’t be reduced from your settlement, it’s recommended that you speak with an accountant or tax attorney to determine the amount you should set aside for taxes.

Can a claim be reopened once it’s been settled?

No. If you agree to a settlement and receive compensation, that’s it. This is why it’s so critically important that you work with an experienced Albany personal injury lawyer so that you can be sure that you agree to a fair and equitable settlement. If you don’t insist on maximum compensation, you’re not going to wind up with what you truly deserve and need. 

Contact Shrable Law Firm for full compensation

Don’t accept a settlement offer from an insurance company without first speaking to an attorney. An attorney with Shrable Law Firm, P.C. will work with you to make sure that whatever settlement offer you receive will fairly compensate you for all the expenses associated with your injury.

Learn more by contacting us online or by calling (229) 349-6291 for a free case review.

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Phone: (229)-349-6291

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Who pays for medical bills while my car accident case is pending? In Americus, Georgia, you are responsible for paying for your medical bills from car accident-related injuries while your case is pending, even if the accident wasn’t your fault. Although you are initially responsible for your medical costs after a car accident, you may get them covered by your health insurance, by your auto insurance, or you can ask the medical provider for financial assistance such as a payment plan or if they will work on a lien placed on your settlement or jury award.