The Agency for Healthcare Research and Quality reports that Americans make a collective 30 million emergency department visits each year. A serious injury can change your entire life in the course of seconds. If you sustained an injury as a consequence of another party’s negligence, you have the right to pursue financial compensation through a personal injury claim.

Only a very small share of personal injury cases go to trial. Settlements are far more common. This raises an important question: How are personal injury settlements paid out? Here, our Fort Lauderdale personal injury attorney answers the question by providing an in-depth guide to personal injury settlements in Florida.

How Do Settlement Payments Work?

Your personal injury case is more likely to end with a settlement than a verdict. According to data cited by the Bureau of Justice Statistics (BJS), fewer than five percent of personal injury lawsuits end up with a verdict. How is a settlement actually paid out? A personal injury settlement can be paid out in a number of different ways depending on the specific facts of the case. Though, settlement payments will generally fit into one of the following two categories:

  • Lump Sum Settlement: A lump sum payment is the most straightforward method of settling a personal injury claim. In this scenario, the injured party receives the full amount of the agreed-upon settlement in a single, one-time payment. A lump sum settlement allows the recipient to have immediate access to all of the available funds, which can be particularly beneficial in cases where urgent medical bills or living expenses need to be covered. However, lump sum payments may not always be the best option, as recipients may struggle with managing such a large sum of money, especially if they lack financial expertise.
  • Structured Settlement: Structured payments, also known as structured settlements, offer an alternative to lump sum payments. Instead of receiving the entire settlement amount at once, the injured party receives a series of smaller payments over a predetermined period of time. These payments can be scheduled in various ways, such as monthly, quarterly, or annually. They can even be tailored to accommodate specific financial needs or milestones (e.g., future medical expenses, college tuition). A key advantage of a structured settlement is that the scheduled payments can act as a steady source of income for the injured party, helping them maintain their quality of life even if they are unable to work.


How Does the Insurance Company Make a Settlement Offer in a Personal Injury Case?

The large majority of personal injury cases are handled by insurance companies. For example, if you are hurt in a car crash in Broward County, you are going to have to deal with insurers. What steps should you take if you find yourself in such an unfortunate situation? Consult with an experienced Fort Lauderdale car accident lawyer. Never rely on an insurance company to look out for the best interests of your and your family. Here is the key thing to remember about how insurance companies operate: They want to resolve their liability for less.

In making a settlement offer, insurance companies determine where to start with the case by assessing a wide range of different factors. They will review liability, the extent of your damages, and how much they believe that they will have to pay if the injured victim actually takes the case to court. In other words, insurance companies make settlement offers based on their perceived liability. They will not offer full and fair compensation unless they see evidence that you can hold them legally responsible in court.

How Long Does it Take to Get Your Settlement?

The personal injury claims process is time-sensitive. To start, there is a strict deadline for filing a personal injury lawsuit. You need to know the applicable statute of limitations in a personal injury case. Under Florida law (Florida Statutes § 95.11), most personal injury claims are subject to a two-year statute of limitations. However, you should never wait to get started with your case. Not only can you build a stronger case with a proactive approach, but you will be able to get a settlement more quickly. How long it takes to receive a personal injury settlement in any given case varies greatly depending on the specific situation. Many different factors that can influence the timeline include things like:

  • The complexity of the case;
  • The severity of your injuries;
  • The availability of evidence; and
  • The willingness of the defendant/insurance company to negotiate.

While some settlements may be reached within a few months, others can take years to resolve. Of course, a prompt settlement is an ideal outcome for injured victims. That being said, it is important to note that a quick settlement may not always be in the best interest of the injured party, as it may not fully account for the long-term effects of their injuries. It is crucial that you receive the maximum available personal injury settlement offer.

The Benefits of Settlements vs. Lawsuits

Are you considering suing for personal injury? You always have the right to take your case to court to seek justice and full and fair financial compensation for your damages. That being said, there are a number of different benefits associated with reaching a settlement instead of pursuing a trial verdict. Here are some notable advantages of personal injury settlements:

  • Faster Resolution: Personal injury settlements are typically reached more quickly than lawsuits, which can take months or even years to resolve. A faster resolution allows the injured party to receive compensation sooner.
  • Lower Legal Costs: Settling a personal injury claim out of court often results in lower legal costs for both parties. Lawsuits can be time-consuming (and expensive). The legal costs for all parties are reduced if a full and fair settlement agreement can be reached.
  • Greater Control: In a settlement, both parties have more control over the outcome, as they can negotiate terms that best suit their needs. In contrast, with a lawsuit, the final decision is left to a judge or jury, and the outcome may not be as favorable to either party.
  • Reduced Risk: Going to trial carries inherent risks, as the outcome is uncertain, and there is always the possibility of losing. With a settlement, both parties can reach an agreement they find acceptable, reducing the risk of an unfavorable outcome.

Costs That Reduce Your Personal Injury Settlement Amount

There are several potential costs and expenses which can reduce the actual amount of the settlement offer that ends up in your pocket. Of course, your personal injury settlement will include provisions for attorneys’ fees. Most injured victims are represented on contingency—meaning they pay nothing out of their own pocket. Their attorney will recoup fees as a percentage of the total settlement. The settlement may also go towards any medical bills that are still outstanding. Finally, a portion of the settlement could be reserved to cover a lien from a medical provider.

A Comprehensive Guide to Taxes and Personal Injury Settlements

Taxes matter. As explained by the Internal Revenue Service (IRS), how a personal injury settlement is taxed will depend on the specific situation. The structure of the settlement can have an impact on taxes. Understanding the tax implications of a personal injury settlement is crucial to ensure that you are prepared for any potential financial obligations. Here is a guide to personal injury settlement tax treatment:

  • Physical Injuries: The Internal Revenue Service (IRS) generally does not tax compensation received for physical injuries or physical sickness, regardless of whether it resulted from a lawsuit or a settlement. Among other things, this includes compensation for medical expenses, lost wages, and pain and suffering. However, if you previously deducted medical expenses related to the injury on your tax return and received a tax benefit, you might be required to include the reimbursed portion of those expenses in your taxable income.
  • Emotional Distress and Mental Anguish: Compensation for emotional distress and mental anguish is typically tax-exempt if it originates from a physical injury or sickness. However, if the emotional distress is not related to a physical injury or sickness, the compensation may be subject to taxes.
  • Punitive Damages: Punitive damages are awarded to punish the defendant for their actions and deter similar conduct in the future. Unlike compensatory damages, punitive damages are generally taxable, regardless of whether they are related to a physical injury or sickness. As punitive damages are only awarded in a very small share of a personal injury settlement, this tax issue will generally not be an area of concern in your case.

To learn more, schedule a free consultation with us today.

Can I Reopen a Claim Once It Has Been Settled?

No—at least not in most circumstances. In general, once a personal injury claim has been settled and a legally binding agreement has been signed by both parties, the claim cannot be reopened. The only exception is if the defendant and/or insurance company engaged in some sort of fraud to secure the settlement. For this and other reasons, it is absolutely imperative that you get your personal injury settlement offer right. An experienced Fort Lauderdale personal injury attorney can help you navigate the claims process.

How to Calculate Personal Injury Settlement Demands?

Are you preparing to make a personal injury settlement demand? You may have a lot of questions, such as: Can I sue for pain and suffering, or how much is my case worth? To calculate your initial personal injury settlement demand, it is useful to understand the typical car accident settlement amounts and the typical settlement amounts for other types of personal injury cases. Beyond that, you should consult with an experienced Fort Lauderdale personal injury attorney. Your lawyer will be able to review your case and help you determine its value. You may be able to recover financial compensation for both economic and non-monetary damages. A settlement may include the following:

  • Property damage;
  • Emergency medical care;
  • Hospital bills;
  • Other medical costs;
  • Lost wages;
  • Loss of earning power;
  • Pain and suffering;
  • Disfigurement;
  • Disability; and
  • Wrongful death.

Why Rely On the Fort Lauderdale Personal Injury Team at BK Law?

The personal injury claims process is complicated. Getting a full and proper settlement requires proving liability and the extent of your damages. Remember, the big insurance companies fight hard to protect their own bottom line—they want to settle these cases for less. At BK Law, we are devoted to getting real justice and real results for victims and families.

At Bernheim Kelley Battista, LLC, our Fort Lauderdale personal injury attorneys are strong, experienced, and justice-first advocates for victims and families. If you or your family member was hurt in a serious accident, we are here to help you fight for the maximum settlement. Call us now or contact us online for a no-cost, no strings attached case review. From our law office in Fort Lauderdale, we represent injured victims in Broward County and throughout Southeast Florida.