How Are Personal Injury Settlements Paid Out in California?

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A personal injury settlement is paid out after all parties agree on the value of the claim. Though the legal process for paying out a personal injury settlement can differ based on the type of case, the value of the claim, and the state, there are specific steps you can expect as you navigate this process. As with any case, talk to a Long Beach personal injury lawyer.

A Settlement Agreement Starts the Process

The initial step in paying out a personal injury settlement is for all parties to agree on the settlement value and terms. In most situations, settlements are a one-time agreement, meaning you agree to the damages paid in exchange for settling the claim fully, without having to go to trial. This process prevents you from seeking additional compensation for the same loss.

You will sign a release form that provides for the terms of the agreement. Your personal injury attorney will go over these rules. This document is legally binding, and payment is not received until it is signed.

Issuing of a Check from the Insurance Company

Once the release form is signed, the insurance company will write a check for the agreed amount. The check is written under your name. Your Long Beach car accident attorney receives the check and will review its details.

Under California law, the insurance company must issue and pay the agreed settlement within 30 days of the settlement date. In cases where the settlement is significant and the terms involve payment over time, the terms are established here.

Your Attorney Deposits Payment

Though the personal injury settlement check is written to you, it is written on “Interest on Lawyer’s Trust Accounts” or IOLTA. This means that money from the insurance company will be deposited into your account, providing your lawyer with the ability to access the funds in a final resolution.

The proceeds from that deposit must be paid to those who hold liens against your settlement. This may include, for example:

  • Medical bills not paid but covered in the settlement
  • Liens from creditors or others who lent you money
  • Expenses related to hiring an attorney

In some situations, your attorney may negotiate medical bills and other liens on your behalf to reduce what is paid towards them. This ensures that third parties receive the compensation they are owed, but not more than that.

All liens must be settled before the attorney can accept the funds to pay you. For this reason, there can be a delay in receiving your funds.

You Receive Your Payment

After all debts are paid, including your attorney fees, you will receive a settlement check. The check will not be for the amount awarded by the insurance company, but rather for the value remaining after all expected liens are paid.

You can choose to receive a lump sum or structured payments, dependent on the situation and the value of your accident claim. Often, structured payments are ideal for individuals with ongoing medical costs and long-term expenses that require regular payments over time.

A Free Consultation Will Answer Your Questions

With the guidance of your Long Beach wrongful death attorney, you will have more insight into what the process looks like for you. Settlements can be critical in helping you recover from your injuries, and a qualified attorney will work to maximize what you receive.