If you were in a motor vehicle accident, you may eventually come to a settlement with an insurance company to pay you damages. In this article, we define the term “settlement” and explain the settlement process in motor vehicle accident cases.
In law, a settlement is an agreement between two parties that resolves a dispute without requiring the case to go to court. In fact, this is a very common outcome for a lawsuit, with the majority of cases being settled outside of court. Settlements are beneficial because they speed up the legal process, helping to avoid ongoing legal fees. Most often, settlements are negotiated on behalf of either party by their legal representatives, although they must approve the settlement before it is officially agreed upon.
If you are in a motor vehicle accident and seek compensation from your own insurance provider or the provider of the other party, you will most likely go through a process of settlement. This can involve negotiations both inside and outside of the legal system. While motor vehicle accident lawsuits can go to court, it is most common for them to be resolved outside of court in the form of a settlement. This is because a jury trial does not guarantee a favorable outcome.
The following is an outline of the process of reaching a settlement in your motor vehicle accident case.
Note that it is advisable for you to be represented by an experienced motor vehicle accident attorney throughout this entire process so that it is as effective, quick, and fair as possible.
An insurance settlement is a payment made by an insurer to a policyholder in order to resolve a claim. In other words, in the context of insurance, the settlement refers to the policy benefit or claims payment. Settlement amounts are determined by several factors, such as the characteristics of the specific claim and the insurance policy’s guidelines. A claim is considered resolved or closed once the insurer pays the settlement.
Under a structured settlement, a policyholder receives a payout over a certain amount of time as a stream of tax-free payments. Structured settlements serve as an alternative to receiving a settlement in one lump sum. When it comes to smaller settlements, structured settlements may not always be an option, but for larger sums, they are often available. A structured settlement usually results from a lawsuit filed by an injured party, a wrongful death victim, or a workers' compensation claimant. A longer payout period offers a greater level of financial security for the insured since a single payout can be spent all at once.
If you choose to accept your compensation through a structured settlement, you can decide whether to begin receiving the money immediately or schedule the payments for a later date.
In a life settlement, an existing life insurance policy is sold to a third party for a one-time cash payment. Upon the sale of the policy, the purchaser takes over payment of the insurance's premiums, and receives the death benefit when the insured passes away. This payment will exceed the surrender value, but will be less than the amount of the actual death benefit.
One may choose to sell his or her insurance policy if the insured party can no longer afford their current insurance policy. Moreover, life settlements are often sold by older people who haven't saved up for retirement and are interested in selling their current policy for some cash. An emergency situation may also lead to a life settlement. For example, people may decide to sell their insurance policies to cover expenses due to the sudden death or illness of a loved one.
