Category: Personal Injury
Calculating Settlement Value of a Case: How Are Personal Injury Settlements Paid Out?
Calculating Settlement Value of a Case in Indiana
When a person is injured in Indiana as a result of someone else’s actions or negligence, the victim may have the right to pursue monetary damages from the liable party; this is done through a personal injury lawsuit. The victim will file a personal injury claim with the insurance company and an investigation of the accident will be performed to determine a proper benefit amount.
How Do Personal Injury Settlements Work?
Personal injury settlements are usually negotiated between the client’s law firm and the insurance company of the responsible party. Decisions about settlement value and benefits are not made until sufficient information is collected regarding the accident.
As the victim, it’s important to record and document as many details about what happened as possible. What you do directly after an accident can have a significant effect on how the case goes.
Whether it’s a car accident or you just need to know what to do after a slip and fall accident, our Evansville personal injury lawyers are here to help.
Types of Personal Injury Damages in Indiana
Indiana has three main categories of damages that can be recovered by a victim or plaintiff.
- Economic damages: Economic damages are straightforward and easy to calculate. They are intended to cover the cost of monetary losses, such as medical expenses, lost income, or property damage.
- Non-economic damages: These values are meant to cover the cost for non-monetary losses, such as pain and suffering. These are mostly subjective and can be difficult to calculate.
- Punitive damages: These are fines or fees which serve to punish the defendant for their misdeed or negligence. Punitive damages are rare, as they are only used in cases where the party at fault acts with the intent to cause harm or commits an egregious mistake.
Some cases will only deal with one of the categories, while others may incorporate all three. The more severe an accident, the more damages the victim is likely to recover.
How to Calculate a Settlement Amount
Calculating a settlement is no small task, and involves a multitude of factors. In Indiana, both attorneys and insurance adjusters have a formula which they use to determine a rough estimate for the value of a person’s claim.
This formula multiplies economic damages by a separate number representing the severity of the injury to estimate an amount for non-economic damages. Finally, lost wages are added to arrive at a total estimation. In short:
Economic damages x 1-5 (depending on injury severity) + lost wages = total damages
If you were in a moderate car accident which incurred medical costs of $5,000 and it made you unable to work, resulting in a loss of $10,000, the formula might look like this:
$5,000 x 2 (moderate injury) + $10,000 = $20,000 in total damages
Remember that this formula is supposed to serve as a rough starting point. The true settlement value can be affected by factors such as the plaintiff’s likeability, the length of recovery time, the quality of evidence presented, and the effect of an injury on the plaintiff’s daily life.
For more information on calculating personal injury settlements, check out our article on maximum personal injury settlements in Indiana.
Who Determines the Value of Personal Injury Settlements?
Insurance companies are responsible for making settlement offers. They are supposed to offer an amount directly proportional to the amount of pain and suffering a victim has experienced.
Ultimately, the final value of a personal injury settlement is decided through a back and forth between the insurance company and the injured party’s law firm. New counteroffers will arise as new information comes to light. Both parties typically want to find an acceptable medium to avoid taking the case to court.
How Are Personal Injury Settlements Paid Out?
Personal injury settlements can be paid in different ways. Typically, the insurance company or defendant will have to issue a settlement check to both the law firm and client. The law firm will deposit the check into their trust account and pay the client with a check for their share of the settlement.
The client’s share of the settlement is usually the amount remaining after the attorney’s fees and expenses have been deducted from money in the trust account.
Another payment option is the structured settlement method. Structured settlements are used when dealing with large amounts of money or if the plaintiff is a minor. With a structured settlement, the funds are paid over time to the plaintiff on specific dates instead of all at once. After legal expenses are deducted, this becomes a payment over time for the plaintiff.
How Long Does it Take to Get a Settlement?
Settlement times vary greatly depending on the details of the case. Most cases take longer because the law firm and insurance company need to collect all medical records and perform a full investigation of the accident before settlement negotiations even begin.
Settlements can also be prolonged if the person injured is still receiving treatment. In these cases, it’s best to wait until they are finished treating their injuries so the full extent of harm caused can be compensated.
If a lawsuit does get filed, the judge presiding over the case will set the scheduling order. This means the time can depend on the court in which it’s filed. Some courts set a short deadline to encourage clients and insurance companies to agree on a settlement value, while others set longer schedules to give ample time for negotiations.
In any case, the personal injury attorneys at Tuley Law Office will provide you with our estimate of how long it might take.
After the case is settled, the insurance company will send a Release of All Claims to our law firm. After checking it over to ensure it is correct, we will send it over to you to sign. Once that is sent to the claims adjuster, your check should arrive in less than 30 days.
Can Personal Injury Settlements Be Taxed?
We cannot say with certainty whether or not your specific settlement will be taxed, but typically there are no taxes to be paid as long as the settlement is in some way related to physical pain and suffering, psychological harm, or emotional damage. The most important aspect is physical pain. If the emotional or psychological suffering is related to physical injury, it will usually be non-taxable.
Should I Accept the Insurance Company’s First Offer?
The first settlement offer from an insurance company will typically be lower than you deserve. Insurance companies are trying to save money for themselves, so they might be lowballing your case. It’s generally a good practice not to accept any offer until you have discussed it with your attorney.
While many times an insurance company’s offer may seem fair, it may not cover future expenses. If the settlement involves you signing a release agreement, that means you won’t be allowed to pursue damages in the future if something else happens as a result of your injury. You may believe that an offer is generous only to find out a couple of weeks later that you need an expensive surgery, or that you will be suffering from mental or physical symptoms for the rest of your life.
How Our Evansville Personal Injury Lawyers Can Help You
Beyond the physical and mental pain, personal injuries have the potential to cause serious financial issues for the rest of your life. Medical expenses that put you into debt or lost wages at a time when you needed them can hinder your ability to live a normal life. To ensure that you receive full and fair compensation for your injuries, reach out to our Evansville personal injury lawyers today.
The attorneys at Tuley Law Office have the knowledge necessary to guide you through filing a personal injury claim and can represent you in the event of a lawsuit. You have enough to worry about while dealing with your injury, let us handle the insurance company while also fighting to get you the maximum benefits you need and deserve.
Have questions about your case?Contact us