How Are Personal Injury Settlements Paid Out?

If you or somebody you love has been injured due to the careless or negligent actions of another individual, business, or entity in California, you may be entitled to various types of compensation through a personal injury settlement. If your case has been successful and the insurance carrier has agreed to pay a settlement, you may be wondering how you will receive the money. First, if you are working with an attorney, this process will be handled by them. They will explain to you the various ways that you can receive the personal injury settlement payout. However, regardless of whether or not you are working with an attorney, we want to briefly discuss the various ways that personal injury settlements are paid.

Who Gets What After a Settlement?

After a personal injury settlement has finally been made, it is not as if the injury victim will be getting the entire amount right away. In fact, there are various other parties involved in the case who will have to receive money.

In general, the settlement check will not come with a categorized list that shows where the money is supposed to go. However, there will be other parties that need to be paid. If an injury victim is working with an attorney, then the attorney will be the one to receive the settlement check. The attorney will be responsible for dispersing the funds where they are supposed to go.

• Medical bills and medical liens. One of the number one concerns of any injury victim is their medical bills. Sometimes, they have to handle these bills personally, but other times, medical providers will render their services with the understanding that they will receive payment from an eventual settlement. In some cases, the medical provider may place a lien against the personal injury claim. This is done to protect their right to collect any unpaid medical bills out of the eventual settlement. If a lien has been placed, then the medical provider’s name will appear on the final settlement draft along with the injury victim and the attorney.
• Court costs and legal fees. The vast majority of personal injury attorneys in Orange County will handle these cases on a contingency fee basis. This means that the injury victim will not have to pay any upfront or out-of-pocket costs related to their case. However, they will be responsible for paying an agreed-upon percentage out of the final settlement check after the case has concluded. In general, this percentage hovers between the 30% and 33% points.
• Compensation to the injury victim. After medical bills and legal fees have been paid, the personal injury victim will generally keep the remainder of the settlement. What we will typically find is that the remaining amounts revolve around lost income and other types of non-economic damages sought through the settlement. This can include the pain and suffering losses as well as loss of enjoyment of life damages.

The remaining settlement amount for the injury victim could be paid in a lump sum, or it could be paid out in a structured settlement, which typically means that a little bit of the settlement will be disbursed each month.

It is imperative to point out that a personal injury settlement should not be agreed on until after the injury victim reaches maximum medical improvement. This is the point where a doctor has determined that no further medical care will improve the victim’s condition. After a settlement amount has been agreed on and signed by all parties, there will be no way for the injury victim to go back later on and recover any additional compensation, even if they discover other injuries or if they need ongoing medical care.