Personal injury lawsuits typically take months to resolve. Some people have to wait over a year to see the outcome of their claim. Therefore, a person can feel relief when both sides finally agree on a settlement deal.
However, the plaintiff does not get the money right away. The time between negotiations and when the check arrives varies from case to case. Many people are curious about how long they must wait to get paid after a settlement.
Two Common Types of Settlements
Many people receive their awarded compensation in the form of a lump sum. A lump sum is when the opposing party sends the entire settlement in a single check. They fulfill their legal obligations, and the plaintiff has the financial resources to pay bills.
Lump sums allow plaintiffs immediate access to all their funds to meet unexpected needs. They can manage their investments whenever they like. However, a person does not get any more money after they spend the entire award.
On the other hand, a person can receive reimbursement through a structured settlement. A structured settlement allows a person to get money from the defendant in a series of payments.
Large settlements are likely to use the structured compensation method. Both parties determine how much each check should contain and how often the plaintiff receives the funds. For example, the victim might receive $500 monthly for ten years.
Some people enjoy structured settlements since they receive money over an extended time. They know they will have funds to pay future bills and support ongoing needs. They do not need to worry about spending everything so soon. However, structured settlements limit a person’s ability to manage unexpected expenses.
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How Long After a Settlement Do You Get Your Money?
Once both parties agree on compensation, the settlement part of a claim goes through several steps. The procedure can take a while to complete. Usually, a person can expect about a month before receiving compensation from the insurance company.
Waiting for the insurer to process and issue the check takes time. Attorneys work hard to ensure everything goes by quickly and efficiently. They understand how much clients need reimbursement for bills.
The paycheck could take longer than a month to reach the injured party. Delays in settlement payments can happen. For example, an error occurred with the release form. Therefore, the insurance company takes longer to process and send the money. The check could face problems during transit through the postal system as well.
Furthermore, the settlement process can take longer to complete if compensation is more than the average amount. An adjuster might spend more time reviewing the agreement if a person’s settlement is in the six-figure range. In addition, the settlement could arrive in multiple payments over time.
Steps in the Settlement Process
The Plaintiff Signs the Release Form
The initial step of the settlement process is to sign the release form. The release document means the plaintiff relieves the defendant from all liability for an incident. As a result, the injured party cannot sue the other individual or entity for more damages in the future.
Some people do not realize the full extent of their losses until later. Therefore, you must ensure the terms of the document cover all accident-related damages. Your attorney can review the release form before you sign it. They may disagree with the terms and hold additional negotiations.
Have a lawyer with you during the first step of the settlement process. The release form contains plenty of legal jargon. An attorney helps you understand the document before you provide a signature.
The Insurance Company Sends Compensation
The insurance company will hold the money until they receive a signed release form. When the adjuster obtains the document, they process the injured party’s payment. Afterward, the insurer writes the check to you and your attorney before mailing it to the appropriate place.
The insurer has a legal obligation to pay you. Usually, the money arrives within two to three weeks. If the check fails to arrive on time, your lawyer can follow up with the adjuster.
The Lawyer Receives the Check
Unless someone does not hire a lawyer, the settlement check typically arrives at the law firm first. Your lawyer deposits the money into an escrow account and waits for it to clear. This action ensures the other party has the funds to pay the settlement.
Afterward, the attorney proceeds to pay off any liens the client has. Your health insurance might place one on your case for unpaid medical bills. Other possible liens include reimbursing Medicare, compensating Medicaid, or paying overdue child support.
The Lawyer Deducts Fees
The next step is to wait for the lawyer to deduct their fee and other legal expenses. Most personal injury firms use contingency fee agreements. The attorney deducts a percentage of your compensation.
Legal expenses include filing costs, expert witness fees, and deposition expenses. Some attorneys deduct litigation costs before the contingency fee, and others do so after.
The Client Gets the New Check
When your lawyer pays all the fees, they produce a new check. They mail the remaining settlement amount to you. Once you receive the money, you can deposit it and use the funds however you need.
How Minors Affect the Settlement Process
Children can collect compensation for accident-related injuries. However, settlements involving minors can be complicated. You might have to wait a little longer for the check from the insurance company.
The court must approve the settlement amount before anyone can sign release documents. Several states require a judge’s approval once the child’s compensation exceeds a specific limit. However, other jurisdictions need the courts to review settlement agreements regardless of the dollar amount.
Some cases require a conservator to request the court to approve the settlement terms. The probate court assigns the conservator, and the person usually is a parent or legal guardian.
When the insurer sends the child’s compensation, limitations can restrict access to the funds. A lawyer can explain how a minor affect the settlement process of a personal injury claim.
Types of Damages in a Settlement
Special Compensatory Damages
In a personal injury lawsuit, the plaintiff can receive two types of compensatory damages. One is special compensatory damages, also known as economic damages. This category refers to the out-of-pocket costs a person pays due to an accident.
Special damages include various health care expenses. You could have ambulance, hospital, and physical therapy bills. The court further considers your need for medication or a medical device when calculating economic damages.
The injuries you receive could leave you out of work for a while. In addition to losing daily wages, you could miss out on a promotion. Alternatively, debilitating injuries may result in the loss of future earning potential. The liable party can reimburse you for what you lost.
A personal injury accident may cause property damage. You might spend money fixing or replacing a vehicle, phone, or other items. Hold onto your bills so your lawyer can use them to calculate the final value of special compensatory damages.
In wrongful death cases, surviving family members and dependents can get compensation for funeral and burial costs. Additionally, you could request the other party to pay for the medical care the victim received leading up to their death.
General Compensatory Damages
The other category is general compensatory damages or non-economic damages. These costs are not quantifiable, and lawyers use different formulas to calculate them. Several losses fall under general damages.
Many people claim pain and suffering in their lawsuits if they experience long-term physical discomfort and emotional distress because of another person’s negligence. If you suffer from anxiety, insomnia, or PTSD, you can get reimbursement for pain and suffering.
Another type of general compensatory damage is a lower quality of life. Severe injuries can impact someone’s ability to enjoy life as they could before the accident. Disfigurement might worsen the victim’s mental health or cause them to isolate themselves from others. They could struggle to perform everyday activities.
Wrongful death lawsuits may grant family members and dependents money for loss of financial contribution. The court can also award compensation for loss of companionship to the deceased victim’s spouse.
Punitive damages are separate from compensatory damages. The goal of punitive damages is not to compensate the victim but to punish the defendant. If a drunk driver caused a severe accident, the judge might want to deter them and others from repeating the offense in the future.
Usually, the court awards punitive damages if evidence proves the defendant acted maliciously or with gross negligence. As a result, roughly 5 percent of trials where the plaintiff wins contain punitive damages as part of a settlement.
How to Calculate a Settlement
When you file a personal injury claim against the liable party, you should have an amount of compensation in mind. The law does not specify a formula for people to use when calculating damages. Lawyers typically use math formulas to determine an estimate. Each law firm may have a certain method to find how much the other side owes you.
The easiest part of calculations involves special (economic) damages. A lawyer adds up the financial costs of medical care and uses pay stubs to find the total wages someone lost. Additionally, your attorney can estimate the amount of future accident-related expenses.
On the other hand, calculations for general damages may be more complex than for special damages. A lawyer usually considers the nature and extent of the injury. Other elements include the discomfort level the person was in and the duration of pain and suffering.
One method lawyers use involves increasing the value of special damages by a specific number. The number the attorney chooses depends on the circumstances of the case. Not all personal injury claims benefit from this approach.
Your lawyer might pick the daily rate method, also known as per diem. The formula looks at the number of days you suffered from your injuries. A lawyer assigns a daily dollar amount and adds all the days to find the value of general damages. The rate could be equivalent to your wages.
Some states limit how much a plaintiff can receive in punitive damages. A damage cap may apply to all or specific personal injury lawsuits. Your lawyer keeps the possible limitation in mind if they need to find a figure for punitive damages.
Calculations for punitive damages typically use the total compensatory damages as the base. The court can increase the base figure up to a specific amount.
Contributing Factors in a Settlement
The value of a case increases if you have multiple damages to claim. However, other elements contribute to the final settlement.
Contributing factors include:
- The severity of the damage. Acute injuries and extensive property damage are worth more in a personal injury lawsuit. For example, moderate traumatic brain injuries typically are worth over $100,000, but severe ones can be in the millions. An individual must deal with more bills and other consequences.
- The jurisdiction of the lawsuit. Where you file a lawsuit may affect the settlement of your case. Different jurisdictions may assign varying values to damages like pain and suffering. A court in one area could be more likely to award larger settlements than another in a different location.
- The recovery period. Plaintiffs can get additional compensation if they require more time to heal. A long duration usually means the person accumulates more medical expenses and missed daily wages.
- Communication with insurance adjusters. The adjuster will use what you say to prove you bear fault for the accident. Avoid giving a recorded statement or allowing them access to your medical records. Politely refer them to your lawyer and end the conversation.
- Available witnesses. A witness’s testimony can bolster your case. They support you by explaining how the defendant’s negligent action caused your injuries.
Plenty of other factors can raise or lower a settlement. Call a lawyer to maximize the potential value of your claim.