How Are Personal Injury Settlements Paid Out?
Posted in Personal Injury on January 19, 2021
If you or somebody you care about is injured due to the careless or negligent actions of another individual, business, or entity, then you may be able to recover compensation through a claim against an insurance carrier or through a personal injury lawsuit verdict.
If you manage to successfully secure compensation through a settlement agreement with an insurance carrier or at-fault party, you may wonder how these settlements are paid out. Here, we want to discuss the various ways that insurance settlements are paid and who will receive some of the funds so that you are not caught off guard when that time comes.
Various parties will need to collect money from your compensation
In general, after your personal injury claim is settled, the matter is over. There will be no way to reopen the claim down the line if you realized that your condition is worse than originally thought. Your settlement check will show the total amount that was agreed upon between you and your personal injury attorney and the insurance carrier or at-fault party.
However, the check will not usually categorize what amount was specifically paid to you for medical bills, lost wages, pain, and suffering, etc. Anyone that is owed money will need to be paid from the proceeds of your personal injury settlement.
To recap – the insurance carrier or at-fault party will issue the settlement amount to you or your attorney. From there, it is up to you or your attorney to pay others involved that are owed any compensation.
Medical bills and liens
If you have any unpaid medical balances, this needs to be paid out of your settlement. Often, doctors will work with you to reduce your medical bills in order to leave you a reasonable amount of settlement. If the insurance policy is too small and the medical bills or high, then medical expenses could take a significant chunk out of the total settlement amount.
Under Tennessee Code Annotated 29-22-102, we can see that hospitals are allowed to file a lien in order to ensure that they receive compensation for the medical services they provide. This gives the medical provider the right to collect any unpaid medical bills. A lien could result in the medical provider’s name appearing on the settlement draft.
Legal fees and costs
If you worked with an attorney to help recover your settlement, then their legal fees and costs will generally be taken out of the settlement proceeds. If your attorney is working on a contingency fee, this means that you likely did not have to pay any upfront or out-of-pocket costs for your case.
When an attorney works on the contingency fee, all legal fees will be paid out of the final settlement amount. The total amount that the attorney will be paid will be agreed upon before they begin providing their services. In general, the legal fees will be a percentage of the final settlement award.
Compensation to you
After medical bills, legal services, and any other legitimate claims are paid out of the proceeds from the settlement, you will keep the remainder of the compensation amount as the non-economic damages (pain and suffering) and lost income you may have incurred.
As you have read through this, a thought may have popped into your mind that you may be better off handling the claim on your own and not working with an attorney. After all, you would then get to keep more compensation, right? That is not necessarily the case.
When you work with an attorney, you are gaining help from someone with extensive resources and legal experts who can handle every aspect of your case. When a personal injury victim works with an attorney, they have a much better chance of recovering significantly more compensation than they would have received how they handled the case on their own.
This often means that they end up with much more compensation than they would otherwise have, even after everybody has been paid.
We strongly encourage you to seek a free consultation with a skilled personal injury lawyer in Nashville who can help you understand every aspect of your claim.