5 Things to Know About Car Accident Settlements

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Car accidents are traumatic as-is, but when injuries are involved, they become a nightmare. Filing a personal injury claim can help victims recoup lost wages, the costs of medical care and other damages. Here’s what victims need to know about the settlement process.

1. There Will Be an Investigation after Filing a Claim

Once a personal injury claim has been filed, the opposing party’s insurance company will launch an investigation. The investigation will be conducted by an insurance claims adjuster.

At this stage, the claims adjuster will review every piece of evidence provided, including:

  • Witness statements
  • The official police report from the accident
  • Photos of the accident scene (if available)
  • Photos of all vehicles involved
  • The accident scene
  • The injured victim’s medical records (if a release has been signed)
  • Testimony from the other driver
  • Content on social media accounts

The goal is to determine whether the victim has a valid claim. It’s in the insurance company’s best interest to find some piece of evidence that invalidates the claim. After all, insurance companies are businesses and want to protect their bottom line.

2. No Settlement Offer Should be Accepted without Consulting an Attorney

After conducting an investigation, the insurance company will attempt to offer the claimant a settlement. Most car accident claims are settled out of court and without having to file a lawsuit.

It’s important to ensure that an attorney reviews the settlement before accepting the offer. An attorney will be able to determine whether the settlement is sufficient for the damages. If so, he or she may advise the claimant to accept the offer.

3. The Lawyer Will be Paid from the Settlement Funds

Most personal injury lawyers work on a contingency fee basis, which means their clients only pay for services if the case is won or a settlement is reached. The lawyer’s fees are taken out of the settlement award.

The attorney should be transparent about how he or she is paid, and the percentage of the settlement that would go to him or her.

4. The Size of the Settlement Will Depend on the Other Party’s Insurance

In most cases, the size of the settlement will depend on the opposing party’s insurance policy limits. Typically, the limit is $100,000. In some cases, such as truck accidents, the settlement may be as high as $1 million.

5. The Settlement May be Taxed

Many claimants wrongly assume that the settlement they receive is exempt from taxes. However, there are some aspects of a settlement that may be subject to taxation.

  • Compensation for medical bills and physical pain is tax-free.
  • Compensation for emotional distress and lost wages is not tax-free.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.