What Is A Personal Injury Settlement Agreement?

Personal Injury - March 18, 2021

If you or a loved one sustain an injury caused by the careless or negligent actions of another individual, company, or entity, you will likely be able to recover compensation from the at-fault party. The vast majority of personal injury claims in Illinois are resolved through settlements with insurance carriers.

However, the process of securing this compensation is fraught with complications. Here, we want to discuss what a personal injury settlement agreement is, as well as how this differs from a personal injury lawsuit jury verdict.

Why are Most Claims Resolved Through Insurance Settlements?

As we mentioned above, most personal injury claims are resolved through settlements with insurance carriers, and for a good reason. There is no need to clog up the court system with injury claims that are relatively straightforward. After an injury occurs and the incident has been reported to the insurance carriers, this will typically trigger an initial investigation by the insurance company. An insurance claims adjuster will conduct an initial investigation and typically make a settlement offer to the injury victim.

Now, we are not saying that the insurance carriers are usually “fair” in these situations. Often, they are not. We do want to point out that insurance carriers are generally “for-profit” companies that will be looking for ways to lower any payout that they need to make to the injured party.

In the end, though, it is much less costly for a claim to be resolved through an insurance settlement agreement than it is to take the matter through the civil court system and all the way to trial.

How do You Get a Fair Settlement?

As we mentioned, insurance carriers are not looking out for the best interest of the injury victim – they are looking out for the company’s bottom line. Therein lies the problem. Injury victims are often at a significant disadvantage when it comes to going up against well-funded insurance carriers.

Insurance carriers like to offer early initial personal injury settlement agreements. These initial offers can be tempting for an injury victim to take, particularly if they are out of work and medical bills are stacking up. However, initial settlement agreements are usually far below what the injury victim should actually be receiving for the incident.

This is where we need to let you know that working with a skilled personal injury attorney in Chicago can be incredibly beneficial. An attorney can use the full resources of their office and their legal expertise to conduct a complete investigation into the incident and help the injury victim secure the compensation they are entitled to. Even if no lawsuit has been filed, an attorney can negotiate with aggressive insurance carriers and help ensure that a fair settlement offer is forthcoming.

One of the first things that an attorney will do is draft and send a “demand letter” to the insurance carrier or the at-fault party in the case. This demand letter will include all of the facts that support the injury victim’s claim, the total dollar value that is being requested, and a notification letting the other party know that a lawsuit will be necessary if the demand is not met. We want to point out that no settlement should ever be accepted until after the injury victim reaches what their doctor considers maximum medical improvement.

What if the Other Party Refuses to Offer a Fair Settlement?

Even after negotiating with an insurance carrier, there is still a chance that a fair offer will not be tendered to the injury victim. If an insurance carrier or at-fault party refuses to pay a fair settlement amount, or if they deny a claim altogether, it may be necessary for an injury victim to file a personal injury lawsuit in Illinois civil court in order to move to the next step.

However, just because a lawsuit has been filed does not necessarily mean the matter will go all the way to trial. A lawsuit will trigger the discovery process where attorneys for both sides will have a chance to continue investigating the incident and exchange evidence with one another. Both parties will also continue negotiations in an attempt to reach a settlement agreement. Even personal injury claims that reach the lawsuit filing process are often resolved well before they go all the way to a jury trial.

Who Gets the Final Settlement?

If you have worked with an attorney to help negotiate with insurance carriers, then your attorney will receive the final settlement check from the defendant. In most situations, personal injury attorneys take these cases on a contingency fee basis. This means that the injury victim only pays legal fees and taxes after they receive a settlement or favorable jury verdict. When an attorney receives the settlement check, they will pay themselves the agreed-upon amount and then hand the rest over to the injury victim. If there were any medical liens in place by health care providers, they will also be paid out of the settlement check.

Is There a Deadline for Filing a Personal Injury Claim?

Yes, there is a deadline for filing personal injury claims in Illinois. Injury victims need to work as soon as possible on getting their claim is processed. The personal injury statute of limitations in this state is two years from the date an injury occurs. This means that an injury victim has a two-year window with which to file a lawsuit against the alleged negligent party. Failing to file a lawsuit in this time frame will result in the victim being unable to recover the compensation they are entitled to.

However, this statute of limitations has nothing to do with deadlines put in place by insurance carriers in Illinois. If your claim is going through an insurance carrier, it needs to be filed within a day or two after the injury occurs. Failing to file a claim with an insurance carrier promptly often results in the carrier delaying a claim or denying it altogether.