Personal Injury Settlements: What You Need to Know
It’s frustrating enough to get injured because of someone else’s negligence. But then comes the settlement process…
And that’s when things start getting confusing.
Personal injury settlements: what they are, how they work, how much you should expect to receive.
Figuring all that out is one of the most important things an accident victim can do. Without this knowledge, people leave money on the table every day.
The good news is…
Personal injury settlements don’t have to be a mystery. With the right information and a good personal injury attorney in your corner, the process becomes much less confusing.
In this article, you’ll learn:
- What Is a Personal Injury Settlement?
- How Settlement Amounts Are Calculated
- The Key Factors That Affect Your Payout
- Why Legal Representation Matters
- Common Personal Injury Settlement Types
- The Settlement Timeline
- The Bottom Line
What Is a Personal Injury Settlement?
A personal injury settlement is a financial agreement between an injured person and the party responsible for the accident. The injured party agrees to not sue in exchange for receiving compensation.
Simple, right?
The settlement amount compensates the victim for damages they suffered. These include medical expenses, lost wages, pain and suffering, and any other out-of-pocket expenses or losses as a result of the injury.
The vast majority of personal injury cases never see the inside of a courtroom. Approximately 95% of all personal injury cases settle before trial.
Trials are time-consuming and expensive for both parties. It’s typically in everyone’s best interest to reach a settlement before a trial.
However…
Just because most cases settle doesn’t mean every settlement is a fair one. Working with an experienced New Jersey personal injury attorney can make a world of difference when it comes to the final amount.
Accident victims who know their rights and understand the legal process tend to have better outcomes.
How Settlement Amounts Are Calculated
The amount of money each personal injury case receives varies widely. From a few thousand dollars to several million.
How are these numbers calculated? How do insurance companies and attorneys arrive at these figures?
They do this by evaluating several key factors such as:
- Medical expenses: This includes all current and future medical bills related to the injury
- Lost income: Wages lost during recovery as well as any future earning capacity lost because of the injury
- Pain and suffering: This is compensation for physical pain and emotional trauma
- Property damage: The cost to repair or replace any property that was damaged in the accident
- Lifestyle impact: Injuries that affect a victim’s ability to carry out their daily activities are often compensated
The severity of the injuries is the biggest determining factor. The more severe and life-altering the injury, the larger the settlement.
For example, minor soft tissue injuries (whiplash) lead to much smaller settlements. Catastrophic injuries like spinal cord damage or traumatic brain injuries result in much larger payouts.
Recent studies show that average settlements range from $10,000 all the way up to and beyond $75,000, with serious cases landing on the higher end. Medical malpractice and product liability cases in particular often come in well above this.
The Key Factors That Affect Your Payout
No two personal injury cases are the same. A number of factors determine if someone will receive a fair settlement or walk away with far less than they should.
Evidence Quality
The strongest cases are backed up by the strongest evidence. This means:
- Medical records that clearly document all injuries
- Photographs from the accident scene
- Witness statements
- Police reports
- Expert witness testimony
The weaker the documentation, the more wiggle room insurance companies have to dispute claims and lowball settlement offers.
Insurance Policy Limits
Something many people don’t realize…
The insurance policy of the at-fault party can be a major determining factor in payout. Severe injuries can occur, but victims are still capped by the other party’s insurance limits.
Comparative Fault
In many states, settlement amounts decrease if the injured party shares some of the blame for the accident. If you’re determined to be 20% at fault, that could mean 20% less in total compensation.
Timing
Patience is often rewarded in personal injury cases. Accepting the first settlement offer from an insurance company is a guaranteed way to walk away with less. Research has shown that people who negotiate settlements end up with awards that are significantly higher than those who don’t.
Why Legal Representation Matters
Here’s where things get interesting…
Hiring a personal injury attorney changes the game when it comes to settlements. The statistics are undeniable.
Victims with legal representation receive payouts nearly three times higher than those without an attorney. That’s not by accident.
Attorneys know how to:
- Properly value a claim based on all of the damages
- Negotiate effectively with insurance adjusters
- Gather and present evidence
- Follow all of the complex legal procedures
- Go to trial if it becomes necessary
Insurance companies recognize when an injured person has knowledgeable legal help on their side. They’re much more likely to offer a fair settlement if an experienced attorney is involved.
Without an attorney, accident victims often just take whatever the insurance company is willing to pay. They may not have the slightest idea what their claim is actually worth. They’re also often unaware of their legal rights.
Common Personal Injury Settlement Types
Accidents can happen in all sorts of ways, and each results in different types of settlement ranges. Here are some of the most common ones.
Motor vehicle accidents are by far the most common type of personal injury case. Settlements in these types of cases usually range from $15,000 to $50,000.
Slip and fall accidents make up a large portion of slip and fall claims. Average payouts are between $10,000 and $50,000, although severe cases can rise above $100,000.
Medical malpractice cases tend to result in larger settlements because of their complexity. Average payouts often exceed $250,000.
Workplace injuries vary based on the type of industry and nature of the accident. Accidents that occur in construction and manufacturing often result in the highest payouts.
The Settlement Timeline
How long does it take to get a settlement?
Personal injury cases usually resolve within several months to a couple of years. Simple cases with clear liability and relatively minor injuries will settle faster. Complex cases that involve multiple parties or disputed liability will take longer.
The timeline is usually broken down into the following steps:
- Receive medical treatment until maximum medical improvement
- Submit a demand letter to the insurance company
- Negotiation period
- Settlement agreement or trial
Attempting to rush through this process almost never benefits the injured party. Waiting to settle until reaching maximum medical improvement is a good way to ensure all damages are accounted for.
The Bottom Line
The purpose of a personal injury settlement is to make the injured party whole again. The more people understand how they work, the better their chances of pursuing fair compensation.
Here are the most important takeaways:
- Document everything related to the injury
- Thoroughly understand all of the factors that can affect the value of a settlement
- Never accept the first offer without consideration
- Always get qualified legal representation
The personal injury settlement process can be overwhelming after an accident or injury. But with the right information and support, accident victims can navigate the process successfully and secure the compensation they deserve.
Action is almost always better sooner than later. Waiting too long to act on a personal injury claim can harm legal rights and weaken a case. Most personal injury attorneys offer free consultations, which are a great way to have a case evaluated and get an understanding of one’s options.
That’s a foundation for securing the settlement every injury victim deserves.
