You may have heard it said that most personal injury cases settle before going to trial. While this is true, it’s important to understand what settlement entails so that you can make the right decision about whether the settlement is right for you. Whether you have been involved in a car accident or have been injured on someone else’s property, an experienced personal injury attorney can help you make a claim and decide whether you should accept a settlement. 

What is a Settlement? 

In its most basic sense, a settlement is an agreement between two parties to resolve a legal dispute. In the context of a personal injury case, settling a claim often involves accepting compensation for your injuries and other losses in return for a release of any further or future liability on the part of the at-fault party. 

For example, let’s say that you were severely injured while riding your motorcycle when another driver ran a stop sign. Eventually, you are able to settle your claim against the other driver when their insurance company agrees to pay you $500,000 to compensate you for your medical bills, lost wages, pain and suffering, and the cost to replace your motorcycle. In exchange, you agree to not pursue any legal action against the driver or the insurance company even if you later discover your injuries will require additional treatment or result in a permanent disability. 

The importance of the last part - releasing any further claims - cannot be overemphasized. If you have been offered a settlement, we strongly urge you to speak with a personal injury lawyer before accepting. 

How Do You Reach a Settlement?

As mentioned above, a settlement is an agreement between the injured party and the at-fault party (which typically involves their insurance company). In order to reach a settlement, one party must make an offer and the other party must accept the offer. In the context of a personal injury case, this can basically happen in one of two ways: 

  1. The at-fault party and/or their insurance company recognize that they are responsible and make an offer to pay for your losses; or
  2. You gather the documents and other evidence you need to support your claim, then submit your claim to the other party or their insurance company with a demand for payment. 

In either scenario, the receiving party can decide to accept or reject the offer. In the first scenario, many injured people accept the offer and settle their case for far less than what it is worth. In the second scenario, it is not uncommon for the at-fault party to reject the offer, particularly when insurance companies are involved. 

What Are My Options if the Offer is Not Accepted?

The party that receives the offer essentially has two options: 

  1. They can reject the offer; or
  2. They can reject the offer and make a counteroffer. 

If the at-fault party or the insurance company is making the offer, you can reject the offer and likely submit your claim later on. There are several reasons for doing this, but mainly because you do not yet know the full extent of your injuries and therefore do not know what your losses will be. 

In most personal injury cases, however, the offer to settle is made by the injured party. The amount sought in the demand letter is rarely accepted, and the settlement process is largely a negotiation. As a result, you can expect the other party to make a counteroffer. At that point, the ball is back in your court. You can choose to accept the counteroffer or reject it and reply with a counteroffer. 

Unfortunately, there are times when the parties cannot come to an agreement. Sometimes, insurance companies act in bad faith. In those situations, you have to choose between pursuing legal action or accepting a less-than-ideal settlement agreement. 

How Do I Know if the Settlement is Fair?

Typically, settlement offers are for less than what the case may be worth. In fact, insurance companies sometimes will try to settle a case very soon after the accident in an attempt to pay as little as possible on the claim. There may be other situations where an insurance company may try to lowball a claim, but you should not be alarmed by the fact that they are offering to settle for less than the amount you were seeking. 

It is critical to understand the value of your claim in order to determine whether or not your settlement offer is fair. The value of your claim will involve the following components: 

  • Your economic losses such as your medical bills and lost income
  • Your non-economic losses such as your pain and suffering

After totaling up the potential value of your claim, the fairness of the settlement offer will also involve factors such as the following: 

  • Whether there are any factual issues in your case, such as widely differing accounts of what caused the accident
  • Whether your case presents any complex or unique legal issues
  • The time, expense, and mental and emotional strain of going to trial
  • The severity of your injuries and the impact they will have on your future

Ultimately, it is up to you to decide whether or not the settlement offer is fair. Your personal injury lawyer can walk you through the various aspects of the settlement and its implications to help you make an informed decision. 

Contact Powell, Powell, & Powell Today if You Are Injured 

Getting the compensation you deserve is more complicated than you might expect. We’ve been helping accident victims get fair compensation since 1951, which means that we have the knowledge and experience you need to get results. With offices in Defuniak Springs, Destin, Fort Walton, Crestview, and Niceville, we work with clients across the Florida panhandle. If you have been injured as a result of someone else’s negligence, contact us today at 850-682-2757 to schedule a free consultation.