How Are Car Accident Settlements Paid? In Illinois, car accident settlements are typically disbursed using either a lump-sum or structured payment method. With the lump-sum approach, the entire settlement is paid once the agreement is reached, making it ideal for those seeking a large upfront payment. Conversely, the structured settlement method involves receiving compensation in regular installments over a specified period, providing a steady income stream for those who prefer it.
If you have been in a car accident in Illinois and need help with your settlement, contact Lloyd Miller Law Group at (773) 838-8100.
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Types of Car Accident Settlements
In Illinois, most accident settlements involve lump sum payments or structured settlements. The payment option you select depends on the extent of your injuries, the terms of your settlement agreement, and the tax implications of settlement payments.
Lump Sum Payment
This payment method involves making a one-time payment to settle the claim. It pays for medical bills after a car accident, and other expenses such as property damage, pain and suffering, and related costs.
It might be a few months before you get your payment. This is particularly true if the person sued wants to discuss the claim. Once the negotiations are finalized, all parties involved will sign a settlement agreement. After that, you can expect to receive the payment for the car accident settlement within six weeks. Once you’ve signed the settlement agreement, you won’t be able to request any more money related to the car accident.
Lump sum payments offer several advantages, including immediate access to funds, certainty, and closure. Receiving your compensation all at once allows you to settle medical bills and vehicle repair expenses promptly. It also provides closure, sparing you from the physical and emotional toll of ongoing negotiations and court proceedings.
Structured Settlement
A structured settlement involves receiving compensation through regular tax-free installments, providing a steady income source for a stipulated time period. The defendant can pay from personal funds or auto accident insurance.
Everyone involved must agree on the total compensation and the terms for the defendant’s payments for a structured settlement to be effective. Once the agreement is signed, the insurance company will purchase an annuity from a third-party provider to finance the settlement. This setup guarantees that you will receive the payments as per the agreement, whether it’s a fixed amount or increasing over time. Opting for this payment method can help cover your day-to-day expenses, ongoing medical bills, and rehabilitation costs.
Are There Factors That Can Impact My Payment?
Determining payouts for car accident settlements involves considering the injuries sustained by the victim. Car accident attorneys and insurance firms examine various factors to establish the appropriate compensation amount.
Comparative Negligence Rules
In Illinois, car accidents and injuries use modified comparative negligence rules, which assigns fault to both drivers, based on the degree of each driver’s negligence. Your compensation is reduced according to your percentage of fault. No compensation will be awarded if you are found to be more than 50% at fault.
Insurance Policy Limits
Drivers’ insurance policy limits are a significant factor in determining car accident settlements. The insurance company representing the at-fault driver will not pay more than agreed to under the policy limit terms. In Illinois, automobile liability coverage is required by state law and is divided into two categories:
- Auto Liability Coverage – Current Illinois law mandates Minimum Liability Coverage of $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $20,000 for property damage per accident.
- Uninsured/Underinsured Motorist Coverage – This type of coverage is for if the other driver doesn’t have insurance, and must be at $25,000 per person and $50,000 per accident for bodily injury.
Severity of Injuries and Medical Expenses
The cost of treatment increases as the severity of the injury worsens. For example, sustaining an injury that results in lifelong wheelchair use will incur higher expenses compared to an injury that only necessitates a brief hospital stay followed by full recovery.
The complete extent of medical expenses might not be immediately evident. Your initial hospital bills may only reveal part of the picture. You might require continuous treatment or rehabilitation, such as physical therapy, to regain walking ability.
Lost Wages and Future Earning Capacity
Loss of income is another important consideration when determining a settlement. If you spent several months in the hospital or had to take time off work to recover, you may have experienced a decrease in your regular earnings. Like medical expenses, you can pursue compensation for these financial losses.
However, the situation becomes more complex when an injury reduces future earning potential. For instance, if you worked as a carpenter and suffered paralysis in one or both arms, you might no longer be able to pursue your profession. In such a scenario, you could seek damages for the income you would have earned.
Emotional Distress
Aside from tangible expenses, you may be entitled to damages for pain and suffering. This can encompass both the physical pain resulting from an injury and the emotional distress that follows. For instance, you can seek compensation if the accident causes nerve damage leading to constant tingling or if you experience lasting pain when using your hands.
Emotional suffering can result from mental and emotional distress following a car accident. For example, if your face is scarred, you may experience social isolation due to your appearance, even if the scars don’t cause physical pain. Emotional suffering can also manifest as PTSD, or other forms of distress.
The Role of Legal Representation During the Settlement Payment Process
In Illinois, car accidents are the leading cause of personal injuries and deaths. In 2022, 1,268 fatal car crashes were reported In Illinois. Even non-fatal accidents can lead to catastrophic injuries, so having an experienced lawyer to defend your rights is crucial for seeking financial compensation.
Investigate the Cause of Your Crash
To have a valid claim for compensation after an accident, it is important to determine the cause and gather evidence to establish the other driver’s liability for your types of car accident injuries and support your claim. A car accident lawyer can examine the circumstances of your collision and gather the necessary documentation to substantiate your claim.
This may include video footage and accident photographs, police reports, witness interviews, and medical records. Additionally, accident reconstructionists can help understand the cause of the accident and establish fault.
Determine Liability
Establishing liability is important to win a settlement in a car accident case. Comparative negligence is a legal principle that requires you to be less than 50% responsible for an accident to receive financial compensation. Any damages you receive will be reduced based on the percentage of fault you have in the accident. An attorney can assess responsibility for your car crash and pursue compensation by examining the factors indicating liability of the other party, such as poorly maintained vehicles, distracted or negligent drivers, reckless driving, drunk driving, and drowsy driving.
Calculate the Full Value of Your Damages
When filing a car accident claim, you should know the types and amounts of compensation you can seek. Economic damages cover quantifiable expenses such as medical bills, lost wages, and property damage. Non-economic damages include mental trauma, emotional distress, and chronic physical pain. A car accident lawyer can help calculate these costs by gathering expert testimony and personal records. It’s important to calculate all your damages thoroughly because once you settle, you won’t be able to pursue further claims. If your settlement doesn’t cover all your current and future expenses, you’ll have to pay for them yourself. Calculating damages can be difficult, but your attorney will ensure you claim the full value of your damages and don’t miss anything.
Negotiate Your Settlement
Negotiating a settlement is crucial for car accident victims in Illinois to receive fair compensation. Your attorneys can assist you in securing a fair settlement rather than settling for a low initial offer by:
- Ensuring that the insurance company adheres to all legal requirements for claims
- Reviewing your policy limits and available compensation and help you understand them
- Submitting all necessary documents on time and providing compelling evidence for your claim
- Managing all communications with the insurer to relieve you from pressure to accept an unjust settlement
- Keeping you informed about settlement offers
- Helping you understand your legal choices for accepting or rejecting a settlement
It’s crucial to enlist the assistance of a car accident lawyer to guide you through how car accident settlements work. Insurance companies frequently attempt to offer inadequate settlements. Due to a lack of knowledge or an urgent need for funds, many claimants agree to these offers. Your attorney can provide guidance on whether an offer is acceptable or not. Contact us if you’ve been injured in a car accident and need assistance with your settlement. The experienced car accident attorneys at Lloyd Miller Law Group are here to help.
